Start-Up Series: The Idea (Part 1)
Ever wanted to start a business but didn’t know how to get started? Do start-ups ever overwhelm you? Well, these series of blog posts will serve to dispel those doubts. In the next 5 days, I will code, and grow, a money making business from the ground up, taking you through the intricacies of building and maintaining a successful business.
The Hardest Part
The hardest part of building any business is coming up with a good idea. We all think that we have good ideas. Only if we could do code, or sell, or had more money, then we’d be successful. That is a load of bullcrap.
A good idea is one that maximizes your profit, impact, or users (whatever your metric is) while minimizing baggage like costs, development time, distribution barriers. A good idea for one person isn’t necessarily a good idea for another person. Likewise, a good idea today may not be a good idea tomorrow.
That being said, there are a lot of good ideas. There are needs to be meet, problems to be solved and markets to be created. The key is listening to the market, and the underlying psychology behind a product.
Back to the Basics
I could write a whole book on the psychology of sales and branding for startups. But I’ll distill it down to the 4Ps. Its a marketing term coined by E. Jerome McCarthy. Most start-ups use it, to come up with ways to sell their existing ideas. I like to use it to find problems and generate ideas for startups.
Price is the least compelling ‘p’ in the ‘4Ps’. A start-up competing for price, can easily be replaced by another firm that figures out a way to cut it’s cost. For products without strong brands, most people will be okay buying the least expensive option. Also given the exact same product, most people will tend to want to save money.
What do I mean? Let’s look at some examples. When I’m buying a car, it’s price isn’t fixed. I barter until I get the right price. Another example: For apartments, I don’t particularly care about a specific place, I just care about an apartment that meets my needs (location, ambiance, and amenities) for the lowest price possible. There are a number of ideas that can come out of price. This is probably the easiest p to get ideas from, they are also usually the hardest to execute continuously.
Promoters are everywhere around us. Whenever I watch TV, I subconsciously think about like Snapple when it’s America’s got Talent. Likewise, on the Internet when I see Casey Neistat riding a boosted board, or flying a really cool drone, I wanna buy that. A lot of human behavior is very similar. I associated good products with people I like or believe in. Inherently pretty people have an advantage in this market. Celebrities have a better advantage, and Some vloggers in my opinion have an even greater reach, because their fan base is so loyal. It’s hard to be a promoter. It takes months, even years of developing quality content to ever make a dent in this market. Finding a promoter in your space that’s undervalued and utilizing them for sales is a very powerful marketing strategy.
There are many other types of promoting. I’m mostly just talking about the promotion I will be using in my start-up later on. Get creative, what are way’s of promoting a certain product? Remember if it’s annoying then it just might work. You can always rebrand and resell under another name if you find something that works and want to differentiate yourself from a tarnished brand. Companies do it all the time, and so should you. Don’t be afraid to use non-kosher techniques including, but not limited to, using Porn-Stars (yes it’s a taboo but they are an undervalued asset because of this), uploading dog videos, partnering body builders, write polarizing content, creating Google Reviews (yeah I would suggest that you do this, but it does provide social proof, even though it’s highly unethical). Come up with a creative way to promote an existing product.
If your product is literally better than anything that your target customers are using and you have a way of reaching your customers, your making money. Sometimes, that’s not possible. In that case make your customers believe that your product is better through other means, like price, promotion, and most importantly customer service. Treating your customer like a king (to an extent) is a product in and of itself. That being said, your product should blow some people away the first time they see it. These are your evangelists, use them as your promoters.
In terms of coming up with an idea, if you can think of something that’s way better than a current solution, and someone who isn’t your mom, or your best friend thinks its a good idea (preferably if they’re willing to pay for it) it’s a good idea.
If your using the internet, and you have a web product, your place is pretty easy; It’s the whole world. Think about a simple product someone could use every day, and scale that to the rest of the world. Congratulations you’ve made Twitter, Snapchat, Instagram, and Facebook (well maybe not Facebook). If everyone has car’s, find a way to use that to make money; now you have Uber. Just think about a creative way to utilize placement. Placement can determine your market, and your market could give you a creative idea.
Another way of thinking about place is, what skill-sets do you have that others don’t. For example I can code. I’m probably more likely to seek out a market where technology wasn’t pervasive when thinking about ideas from place. It differentiates me and I’ll be able to charge a premium.
After thinking about all of those things for a couple of days, if you still don’t have any good ideas that come to your head, try going out more and interacting with people. The most important thing is to listen. Most people spew out good business ideas without realizing it. It’s also called complaining in some cultures. Figure out something a large minority (or majority) of people are saying to you, and go solve that problem after they verbally (preferably contractually) agreed to pay for the problem you’re solving.
The Next Step
In the next blog post I’ll describe the problem I’ve decided to solve, and go through my mental process for validating that specific idea.
Thanks for taking the time to read this blog post. I’ll have another blog post out tomorrow, highlighting my journey throughout the week.
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