Entrepreneurs and innovators are always looking for new opportunities– opportunities to start a business, invest in, or scale an existing one. Being strategic about identifying and seizing lucrative opportunities keeps the focus on actualizing these ideas. In this week’s OpenMic session, we discussed knowing which opportunities to grab and which to pass up in order to grow your business.
“Going from zero to one is the hardest jump– if you can go from zero revenue to showing revenue, you’ve proven your business can make that jump.”
What makes a great opportunity?
Not every great business idea becomes profitable, so it’s important to analyze opportunities as they arise. Consider having a checklist of what you need for that business opportunity to meet before you invest time and money into it.
- Do you see yourself enjoying and capable of enduring the huge amount of dedication and persistence that you will need to get a new business off the ground around this opportunity?
- Are you solving a problem or filling an industry gap? Ask yourself how this opportunity or idea will help consumers and if it’s something you would use. Not only does this make sure you commit to projects you’re interested in, but it’s also a way to gauge its market performance, somewhat predicting success.
- Evaluate how this opportunity gets you closer to achieving your goals. Knowing your personal and professional objectives beforehand allows you to quickly decide when to take action.
So you have your great opportunity, now what? After the ideation process comes research & development which can heavily influence your business’s chances of success long term.
- Market research is crucial to predict business trends and it’s never been easier or more accessible. Quantitative methods such as online surveys and questionnaires help gauge how the market will receive your product and can give valuable insight in the early days. Qualitative methods such as interviews or ethnography can help you better understand your potential customers’ needs.
- Introducing your Minimum Viable Product (MVP) is a strong way to attract early adopters and learn more about customer needs as well. The validation and feedback received in this stage allow you to make necessary improvements before diving deeper into the more intensive stages of production.
- Assessing risks and potential for growth will go a long way. How will your business change and adapt to advances in technology? Most entrepreneurs will tell you that ‘Plan A’ hardly ever works out, so it’s in your best interest to have the “insurance” of options.
Listen to the full session above for more!
Serial Entrepreneur Club – EP79
Hello. Hello, Michele. We have a lot of members starting to come into the room here on this fine Friday afternoon. And you are joining us on the Weekly Serial Entrepreneur Secrets Revealed Club. We’re here every Friday at 2:00 PM Eastern Time. And we have three hosts of this show, our main host and creator Colin Campbell, who is actually traveling right now.
So he is probably trying to get off his plane so he can get on the call here on the session. And Jeffrey Sass and myself, Michele Van Tobar. So today we wanna dive into a very fun topic, which is talking about opportunities that [00:01:00] are everywhere but specif. How do we determine which of these opportunities are good opportunities, which ones to go after, and which ones to quietly or not so quietly abandon.
So today, this is open mic. That means that anyone who’s interested in coming on and sharing tips or asking questions, or has a story about something that worked or didn’t work for them, we’d love for you to raise your hand and come up and contribute to the conversation. So this session runs for exactly one hour.
So go ahead, raise your hand if you have a story and insight or you just wanna participate in this convers. So let’s go ahead and get started. I see folks already starting to come up on the stage here. We’re gonna start, [00:02:00] I think, let’s start with you, Jeff. Like you’re a very seasoned entrepreneur.
You’re the CMO of paul.com. I’d love to hear, and I’m sure our members were, would like, we all have lots of cool ideas. They’re all over the place, trends, in and out. Jeff, what is your advice, What are your suggestions, your experience on how to evaluate opportunities?
Which ones to go for and which ones to put to the side? And which ones? Just to say no way. Yeah it’s a great question, Michele, and there’s certainly not a a hard and fast answer across the board. But I think, a lot of the great entrepreneur stories come from someone solving a problem that they had and then, understanding that if they have this problem, there’s probably many other people out there who also have the same problem.
And then trying to find that audience and scale your solution to others, so one place to look [00:03:00] for opportunities is look at your own life. Look at the things that you’re doing on a daily basis, and where are you encountering problems? Maybe it has something to do with your family.
Maybe it has something to do with your work. Maybe it has something to do with your commute, but look around you, always be looking with an open. For opportunities to fill a gap that’s yet to be filled, and solve a problem. And if, and the reason why I think those companies often end up being very successful is because if you’ve created something because of a need that you had yourself You’re gonna be very likely to be passionate about it and get excited about it and believe in it fully because you’re using it yourself.
It enriched your life in some way and that’s why you went ahead and created it, whatever it may be. And so that passion. That devotion to the solution is gonna drive you through some of the tougher times of starting a business, as opposed to if someone just handed you an idea that wasn’t something you truly believed in because [00:04:00] you didn’t really see the benefit of it you might not have the tenacity to see through the hard times and push through.
So first place to look is within your own life. Look for opportunities in your everyday life where, gee, if I only had something that did this and research it, and you realize no one else has made something that does that yet, maybe you’re the one who can make something that does that. So I’d say there’s a lot more, but let’s start with just look at your own life and what are the gaps you want to fill for yourself and would other people want those same gaps filled?
Thank you. And I heard something that you said too, that I also believe in is you said something about passion. I think that is one of the important, parameters of assessing what these opportunities are is do you have the wherewithal, the expertise, the passion? Cuz these things are painful and they’re, they take a lot of time and a lot of frustration quite oftentimes to make a [00:05:00] go of it.
Do you have the passion and is your idea that you’re spotting, actually solving some kind of problem? So thanks for that. I’m gonna go ahead and add on to this and then, anyone who wants to come up, please we’re gonna bring everybody up on stage that we can, that wants to contribute here.
So I would add to that, that is this something that people will actually pay for? Okay. I know that might sound, Obvious, but there’s a lot of good ideas. And people will say, Oh, that’s, we’ll tell you they like your idea, but would they actually want to pay for it? So unless it’s a non-profit, that’s a rather, critical factor we would say.
And then it’s maybe not just so much would you pay for it, [00:06:00] but you need to do some kind of analysis to figure out is that gonna sustain the business, Not just what it might cost for development or maybe marketing, but also yourself. A lot of entre. , go down this path, spend a lot of time and effort only to find out, yeah, I can keep the business going, but I can’t even really pay myself.
I really can’t even recruit maybe some top-notch talent because I cannot get the kind of money that is needed to move forward. So that’s the ads I have. Jeff, did, do you have any stories that you can share with us maybe of one that didn’t work? Because I feel like a lot of times we learned a lot from what didn’t work and what we should have done different, perhaps?
I think, it’s tied a little bit to your point about will someone pay for something. And I think, one of the hard lessons I [00:07:00] learned over the years is, you could build a great product or service. You can create something that, that really is. great. And it works great.
But if the consumer adoption for that is not there yet, it won’t necessarily be a successful business even though you’ve done everything right in terms of creating the product. I went through this many years ago with a company called bar point.com, where we had great technology, great distribution.
We had partnerships with all the major carriers in the US at and t and Sprint and Verizon and all of them. And product was great, worked great, had great distributions, so it was easily accessible to virtually anyone with one of those carriers phones. But no one really and it worked.
When someone used it, but really nobody was compelled to use it. We were ahead of our time and people weren’t yet comfortable doing these things on their mobile devices yet, it wasn’t until a few years later when smartphones really took over that people [00:08:00] started, just started to feel comfortable.
And it’s really only in recent years, the last, 10, 12 years where people are very comfortable doing things on their mobile phones. So even though we had a great concept, a great product, it functioned well and eventually it’s a product that people wanted and needed at the time we came out with it.
It wasn’t, we came out too soon. Consumer adoption is often very important. It’s not just the product and the technology it’s, will people use it? Is the demand strong enough or are they comfortable enough with what it is you need them to do for them to do it? I think that’s a really great example, Jeff.
I love what you said about being too early. I’ve experienced that myself where the technology, like for me, I was at a startup company, actually, it was part of Ideal Lab out of Los Angeles. And it was funded, it was even funded by General Electric for heaven’s sakes. [00:09:00] And this is, I, gonna date myself here a little bit, but it was right when people really started developing, interactive education and entertainment types of, I, I’m gonna say app, but it wasn’t an app kind of interfaces, just for the web.
And what we were trying to do was in a very entertaining way develop a program where people could just go online and take on characters. Believe it or not, this is 25 years ago. Okay. And what they would be doing is this character, this persona was learning this speak a second language specifically.
We were trying to do it for the Japanese market so they could learn in a very easy way how to speak English. And oh my gosh, it’s the greatest thing ever. We built this cool, and I’m putting in air quotes, little demos where that were totally [00:10:00] like not the real code, right? We were just trying to get funding and show people what was possible.
And what we quickly found out is, there was a, application middle tier at that time called WebLogic, and we had a big design firm and all this, Oh my gosh. We couldn’t get it to work on the internet. It was so slow. There were so many issues and the company basically just totally folded up.
It was some really smart people, not myself, that thought about it and yeah, it, it was a great idea and is still a great idea, but the technology was just not ready. So I think you’re right. There are a lot of, factors we need to look at before we even start going down that path about worrying about money.
Maybe, of course we need to, do the litness test there, but can this even be done in the format that you want at a price that you can bring it even to a niche market, [00:11:00] let alone a mass market. That’s a really critical, litmus test. I think there’s almost like a checklist, Jeff.
I think that we could almost go through just as you’re evaluating at a high level, if an opportunity is worth going to the next step on. I think that’s where this idea of doing a prototype, in mvp, Eric Reese, became very well known, developing the lean startup methodology and talking about doing an mvp.
And the truth is today it’s so much easier to do that, that it really behooves you to test your idea, test your concept in a simple way to make sure that people will buy into it, will pay for it before you invest too much of your time or money on that concept. And it’s easier today than it ever was when we did Bar Point the same company, we had to pay.
Tens of thousands of dollars out of our own pocket to just get a little very simple working demo going that we used to [00:12:00] to raise money for the project. And that worked. And it only worked because we did have a demo. And I have a funny story about demos going wrong, which I could tell later. But and then once we raised money, we had to spend literally like almost a year and millions of dollars to actually build the first version of our platform.
Based on that prototype. Today. With the technology and the platforms and the note code solutions and APIs and everything that exists now, we could have that same investment of 10 or $15,000 that we made in the prototype back then. We could have built the entire platform today and probably have done it in a week or two versus almost a year.
So you have the tools available today to very cost, effectively create a prototype of almost anything you can think of. And sometimes it’s not even a technical prototype. There are great examples if you’ve read lean startup of companies testing concepts on paper before they actually go and build the technology, and just do [00:13:00] a small scale thing where you do things manually, and before you build the software.
To actually do it automatically. So I think having a prototype, testing your concept and when you test it, don’t just test it with family and friends, test it with strangers. Te test it with people who don’t have a conscious or unconscious vested interest in telling you what you want to hear.
And that’s another thing that’s easy to do today because everyone’s got mobile phones. You can do focus tests, you can do, FaceTime or Zoom meetings with people to get opinions of a product. You can do surveys and polls for free. So there’s a lot of ways you can test your concept before you dive in full steam ahead.
Yes, I totally agree. It’s a beautiful world in that aspect today, right? Like you said, it used to be so hard and it would cost a million dollars even just to build the most simple thing. , that begs the point too. There’s this whole like, backing up a little bit and bringing it up a [00:14:00] level.
There’s this, there’s infinite amount of people typically, that are interested in helping. I would say too, yeah, find a group of people that you really trust and you respect, right? That you respect their point of view, that they have experience that you can, on a regular basis, reach out to and run ideas pass.
And they may know people that are experts. I found it’s a great way actually to network. So you’re asking somebody for their feedback, for their thoughts on something, hopefully they’re have some kind of expertise, right? Or they’re in the core demographic that can give use suggestions.
Oftentimes they can point you, to other people that you may have never met or have exposure to that can help you move your project along. Or they, they know somebody who’s had success in a particular area. Not being [00:15:00] afraid to be vulnerable and get out there and talk to people I’ve found is always a good idea for me.
Sometimes it’s really painful cuz it’s almost like you’re afraid in some ways. But I can say that I’ve never been sorry that I did that. If it is somebody that I truly respect. Yeah, and I think, if you’re listening and you want to share your thoughts on where do you find opportunities or how do you test a concept to see if it is an opportunity or not, feel free to raise your hand.
We’re happy to bring you up on stage. Today’s show is intended to be an open mic, so that means anyone who’s listening is welcome to come up and join in the conversation. Hello Mimi. Hi. I have a question. Not any advice yet, but I had a question about other opportunities, like opportunities to invest your time or money.
Like how do you know if you’re trying to invest in like a new company or work there and spend your time, like searching out those kinds of opportunities, maybe if you don’t [00:16:00] have the idea part. Yeah, it’s a great question and I think, in all of these cases, and we talked a little bit about this earlier this week on the Complete Entrepreneur Show You should know beforehand what’s your objective?
What’s your goal? Because if you’re just looking at opportunities blindly and trying to say, Oh, should I do this or should I not do this? If you don’t know what your objective is, then you’re not gonna be able to make the right decision because sometimes your objective is gonna be to make money. I’m looking for an opportunity that I can live off of so I can quit my day job.
I want to join this company, this startup, get behind it, make money, and that’s what I want to do. That’s a legitimate objective. Other times your objective may be to learn. You might say, I don’t really care if I get paid or not, or what I get paid. I’m looking for an opportunity that’s gonna get me in on the ground floor of a growing business so I can learn what it takes to start a business from ground zero.
So that’s a very different objective and a company that fits [00:17:00] that object. It may not be a company that would fit the objective for the person who’s just looking to make money. So it’s really important to understand upfront what’s your objective? If your objective may be that you want to have a large ownership stake in a business, then you may be having to look for co-founder opportunity so you can really get in as a co-founder and have an equity stake in that business very early on.
Now that also might not mesh with someone who just wants to make money right now to support themselves because oftentimes the co-founders of a business of a startup have to go for a period of time, maybe without taking salaries because they’re trying to raise money or whatever money they have raised they want to put into the building of the business and not into their own pockets.
So it’s really important, I think, to answer your question, is to know what’s your objective first? And then once you know your objective, then you can look for opportunities where you can reasonably say, Okay, if I do this, I have a good chance of meeting my objective. Does that make sense? [00:18:00] Yes, definitely.
That’s really good advice and I feel like once you have a clear objective, the opportunities make themselves more clear too. So that’s definitely good advice. Absolutely. Cuz then you have something to judge them by. Yeah, and I would say, Mimi, it gets challenging, right? Depending on the kind of the stage or the level that the startup is at.
Because in the beginning it, it may be just like somebody soliciting you or asking you to invest, but yet they don’t really have a product like that’s much different than a company that has a working product. And they are just at the beginning of getting investors. So I think one thing is, never be, shy or afraid or hesitant to really get in there and meet esp, the founders and the key people in the beginning stages.
Regardless of any pushback that you [00:19:00] may have. Because at that point, you really just need to get as much information and data as possible. Awesome. That’s really good advice. Thank you. Thank you. All right. We are serial entrepreneur and we’d love for anyone to just come on stage and give advice that you’re a startup in you’re, have found an opportunity or you’re in the midst of working on, an opportunity that you.
Or moving forward, let us know, or if you have exited what, whatever it is, or invested or worked. We’re very interested in knowing how you’ve found that, assessing these opportunities and moving them forward worked. So h here’s another one I wanna throw out. That we’ve seen a lot of members come on, serial entrepreneur that they had success with, and that is working with these kind [00:20:00] of, I’m not, I forgot the word already, like an incubator, right?
There’s very specific, like a text stars or whomever it might be. Jeff, am I using the right word? Yeah, absolutely. You want to work with one of the incubators. There’s a lot of them or an accelerator, nail that. Different names, but it’s the same idea. You probably have heard of Y Combinator.
That’s probably one of the best known ones. And those. Companies will, sometimes they’ll, if you get into their class so to speak, they might even, put you up and support you with a nominal nominal living expenses for a period of months while you go through their program. And then at the end of the program, they’ll put you in front of potential investors.
And the trade off is they probably make a modest investment in your company and take an equity stake. And they usually take an equity stake at a, a better, higher, at a better deal than others cuz they’re coming in quite early and maybe it’s a small amount. So they have a [00:21:00] part of their terms is they can invest further down the road along with other investors, et cetera, et cetera.
But it’s a good way to get exposed not only to other founders, but to learn a great deal. And also then at the end of it have entree to a number of potential. I. Yes, and we’ve had a lot of people that we’re associated with as well as members. We actually did a project at Startup Club with Proctor and Gamble and repetitively we are heard, we hear from people that is an extremely strong way to move your idea forward and get some of the most amazing connections and advice especially if it’s one that is focus on your industry or your vertical.
So I know that if I was coming up with a new opportunity right now, I would definitely look into that and seek that. Okay. So I see we have Ruben on the [00:22:00] stage. Ruben would love to hear from you. What are your thoughts on assessing opportunities? For me, this is I’ll start like brick and mortar basics, right?
I took my daughter to the Palm Springs market, the marketplace last night, and she’s been working on creating like balloon stuff, right? Balloon stuff for kids and, shapes and what have you. And so her only competition out there was older lady had been doing it forever, just making dogs and, walking around.
My, my daughter had made all these intricate designs and, she pocketed about $200 her first two hours. She had never done this before. And I was like, Wow, you know what an amazing way just to get your your product out there. She was she was being asked by several people, Hey, where’s your business card?
We’d like to have you at a birthday party. And so she’s leaving back up north to, to uc, Santa Cruz. That’s where she graduated. And she’ll probably seek some other business opportunities, but what a cool side, little side hustle I wanted to share with you About yesterday, but I’m in the crypto space [00:23:00] and so for me, a lot of my connections it just goes back to not just the investor, but which exchanges am I gonna land on, right?
And so a lot of the negotiation process that happens between us and them, has to do with the marketing that’s going to be done for our coin which price listings are going to include market making for making sure the transactions actually go through.
And obviously some of the most important things. What regions is that a crypto exchange located in. So tho those are some of the things that are going on in my head. Just sharing the mic with us. Open Forum. Thank you for the opportunity, Michele. Absolutely. And thanks for sharing that.
You bring out a good point. We sit in a lot of the, clubs on clubhouse and sessions. and it tends to go very, let’s just say high level big very quickly. But I really liked what you said about this was a product, a physical product, and just going, to this market, going global and [00:24:00] really proving out going global versus going local can make a huge difference.
If you have that kind of product just starting local and just seeing if you could really sell it and if people will really buy it, it really is like a test market in a great way to start to actually test the concept. So I think that’s a really good suggestion and it could be, very low investment to quickly find out, do you really have something that’s can be substantiated or do you need to do a bunch of work or do you need to abandon?
So thanks for sharing that. My pleasure. Thank you.
All right, so we are Serial Entrepreneur Secrets revealed. We’re here every Friday from 2:00 PM Eastern. We wanna point out that Startup Club does have a website. If you are interested, you can go up to [00:25:00] www.startup.club. We have hundreds. Podcasts, blog, articles and resources that you can peruse any time at your convenience.
It’s not just serial entrepreneur, it’s several different types of sessions. There’s complete entrepreneur, there’s special guest speakers like Jeffrey Moore, who is an amazing business classic author from Crossing The Chasm to even the founder of Reebok, Joe Foster. So please visit the website if you’re interested in hearing more.
Also, if you wanna hear about new speakers that are coming, and we do have some very notable speakers that are coming on again soon, please go to the website. You can sign up for the email newsletter. We’ve even had the clubhouse founders join some of these sessions that time and there are gonna be some really cool people that we expect to come on again before the end of the year.
[00:26:00] Jeffrey, I’m gonna pass it back to you. What’s your next tip? So you think you’ve gotta get great product, you’ve pass the initial, sniff test, and now you’re thinking you need to go and get funding. What would you suggest to people to do?
Okay, Jeff. All right, so I’ll continue. It sounds like maybe he got taken offline here for a second. All right, So we have let’s just say we have our minimal viable product. We’re ready, like to start talking to investors or maybe even companies to buy us. The next suggestion we would have, and it, and this might seem very basic.
Make sure that you are doing things in a legal manner. So if you’re celest, Solicitating investors, you need to make sure that you are legally [00:27:00] compliant. There are a lot of regulations on this. And there’s a lot of free resources, local resources like small business administration and even more local ones that you can go to and seek help.
Another point that we always advise people is make sure you have for your branding, your domain name and any trademarks or copyrights. I know I’ve even made this mistake before. I’m actually in the middle of trying to clean it up right now for one of the companies that I run that’s an e-commerce company.
And I just thought, Oh, okay, nobody’s gonna take this name. I don’t wanna spend, whatever, $2,000 right now to trade market. And lo and behold, like a month before I was ready to like really execute on it and take it live, somebody filed. So now I’m sitting here going, Okay, what do I do now?
I’m having to pay more because I’m having to pay, [00:28:00] my. To see if he can, get me rights to use it. I think I have the rights to use it and I probably have a strong case, but I’m very, hesitant to go invest resources and launch it publicly, which to me costs more than just the money to launch it, to then have an issue in the future.
If it’s you’re ready to go that next step, make sure you have a good domain, make sure you’re going about solicitation correctly, and also make sure you have any copyrights or trademarks that you need. Jeff? Yes. Now we’re, what would you suggest I know that you’ve done this actually on a very large scale, so what would be your suggestion for our members here to take it to the next level?
And you’ll wanna start to get funding. Okay, so I did, I apologize cause I didn’t hear the first part of the question before you called me out. So [00:29:00] if you could just gimme a little bit more context then I’m happy to answer the question. Yes, sorry. Absolutely. So what we’re talking we’ve switched to now is, so you have an idea, you’re you feeling really good, you have a minimal viable product you’ve gotten really good feedback and you believe you can make money on it.
Like what is the next step? Like you feel like you wanna go a little bigger and you wanna get some funding. Like where do we even start with this? So I think if you get to the point where you have a minimal viable product or working prototype or a beta version of your product and you’re getting ready to raise money, nothing’s gonna be more attractive to.
Investors then demonstrating that you’ve gotten someone to pay for it. It goes back to what Michele mentioned earlier about, will someone pay for it if you can walk in? And it doesn’t have to be, it doesn’t have to be hundreds of thousands of dollars of revenue. I’ve heard, known investors talk [00:30:00] about the difference between if they’re talking to a startup and.
5,000, $10,000 in revenue. It makes a huge difference cuz at least it proves to them that somebody out there was willing to pay money for what you’ve created and if you can get $10,000, then you can 10 x that to a hundred thousand dollars and you can 10 x that to a million dollars and you can 10 x that to $10 million.
So all things being equal. 10 companies are pitching investors and nine of those companies are pre-revenue. And one of the companies has actually managed to squeak out a few paying customers, real paying customers, not a friend, not someone you gave a free trial to, but someone who actually is paying real money.
And again, it doesn’t have to be a lot of real money. It could be a hundred dollars a month, it could be $50 a month, but if you have 50 people paying you $50 a month or $10 a month or anything to demonstrate that people are willing to pay for it, that will have a huge positive impact on the investors you speak to.
So I think once you get to the point of having a [00:31:00] minimal viable product or a prototype, see if you can get a few customers. And obviously customers means different means. Different things, depending on what your business is, that might mean subscribers. If it’s a subscription business, that might mean purchasers of your product prototypes.
It might mean different things, but if you can walk into an investor with some demonstration of the ability to create revenue, you’re gonna be in a much stronger position than someone who has a great idea Pre-revenue. Yes. That’s a great point Because it’s easy to say that you can make money and it’s great and have these fancy projections that you just plugged into a spreadsheet, but Right.
Seeing is believing and it doesn’t have to be a lot. I think a lot of people are, a lot of people don’t go down that path because they’re worried I’m only gonna be able to get $5,000 of revenue over three months. That’s gonna look terrible if I walk in the door with that.
And I think we’re swayed. On Shark Tank, you see the sharks laugh at someone when they only have [00:32:00] five or 10 or $15,000 of revenue. But when you’re going up. competition and companies that have zero revenue, even $10,000 is impressive. So I really think that people don’t go down that path cuz they’re afraid they’re not gonna generate enough revenue to be meaningful.
But I think the biggest jump is from zero to something. From zero to one is the biggest jump. So if you walk in the door demonstrating that you a, you were able to cross that chasm and go from zero revenue to some revenue, you’ve actually proven something really important, even if it’s not a lot of revenue.
Yeah, that’s fantastic advice and. To your point, Jeff, like the fact that you can get a customer, like that’s huge, right? I, the people know that you’re just starting off and that you’re trying to get funding, but you being actually able to sell it is a huge milestone. And what we say, Jeff, Colin and I, we all work together on these [00:33:00] businesses.
We actually celebrate that. Yeah, of course you wanna get to 5 million or whatever, a million, but that is a huge milestone. That’s not to be understated. And I would add to that as well. One thing that’s impactful in addition to that, which is actually very key we’ve heard from many VCs, is if you are at the point where you’re doing marketing and you can acquire a customer, Right ads, search ad or mag whatever, TV ad probably you’re not there yet, but let’s just go with a Google ad or a Facebook ad and you can get a customer at an acquisition cost less than what you’re making, right?
So you’re profiting. That’s even a huge like step up from there because the investors and VCs look at it like, okay, this is a, a scenario where I can just pump some cash in and I’ll make [00:34:00] more than what I’m putting in. Like these little milestones and getting to those points very quickly.
As Jeff said, even if it’s little, these are the things that really spark interest from investors. And Jeff, we know you’re a CMO and you work on a big e-commerce company. I think you would tell us that’s huge. What are your thoughts? Absolutely. But by the way, you can use, ads, social media ads, Google ads, they’re very inexpensive.
Obviously you could spend millions of dollars if you scale it, but you can start out with very modest investments. And there are people who will do that to test the concept, especially in the e-commerce world. If you have an idea for a new product and you want to know if you should sink the money into ordering and importing, or having it manufactured, there are many people who create the ads, have a, an image of the item.
It could be an image of the prototype, it could even be just a mockup, of the item, a really high res 3D mockup so it looks [00:35:00] real. Put together the ads, the same ads you think you would have if you were gonna be selling. And actually spend a few bucks. It could be 50, a hundred bucks, it could be a couple hundred bucks.
And put those ads out there to the right audience. Target the audience that you would want to target for this product and see if anyone bites, see if you get any orders, even if you have enough, even though you don’t have anything to sell, at that point, you’re only gonna get a handful of orders, right?
You’re not spending enough money to get thousands of orders. So you’re gonna get a handful of orders and you’re gonna apologize and cancel those orders and say, Hey, the product’s not quite ready yet, but I’ll put you on your waiting list or whatever. But then you demonstrate that, wow, there are people who would’ve been willing to buy this product.
Had I been able to deliver it, now I gotta go figure out how I’m gonna deliver it. So you can do tests like that and actually prove that you have something that there’s demand for before you even have it. And I know of a number of people, in the e-commerce world who do that all the time before they introduce a new product.
They’ll do fake ads for the fake product before it exists. And if they get a good reaction, then they’ll go [00:36:00] ahead with creating the product. I completely agree. And I previously worked for a very large e-commerce company, and we would do that. It was actually for a specific kind of listing service.
We were actually testing the business model. We did AB testing just to see could we get anybody to sign up for the service. And, you’ll get so much insight in the tools to do these AB tests, which I’m sure many of the people here have had exposure to are, free. We actually had our own testing system, but you could even use Google Analytics.
they have testing platforms where you can put in an AB test. You can see who the winner is once you get statistical significance and make a decision, okay should we like, refine this or should we like really think about this and put some effort into it and move it forward. And [00:37:00] that was even at an established company.
In fact, we did more of that rather than less of that than I’ve actually seen at startups. And I think that is a lesson to many of us here imploring some of those bigger tactics or extremely easy now as we were saying in the beginning because it’s so easy and accessible to use Google Analytics or whatever it is right off the shelf these days.
So really there’s no reason why we shouldn’t be testing and getting feedback. All right. Do we have anybody who’s had experience bringing a, a new idea or a new product or a new service to the market? If you do, please raise your hand. Like we wanna hear how you did it. What worked, what didn’t work what you might do differently if you were to do it again, or if you’re doing it now.
All right. I [00:38:00] see Colin has joined the room, but I’m not sure if he’s able to talk. So if you are able to talk, Colin, just flash your mic. Otherwise we’re going to move back and talk a little bit more about other techniques that we’ve used to assess whether an opportunity is good or bad and we wanna invest in it.
And I will say, Michele if you’ve been listening someone in the chat, always check in the chat cuz there’s oftentimes some good comments there. But there’s someone in the chat who says, if you’re interested in testing a product before it exists, that they’re able to help you create those ads. So if that idea sounded good to you and you have some ideas you want to try out, you might be able to make a good connection right here in Startup Club.
Startup Club and Clubhouse is so great for that. I’ve found so many people are so generous with their with their time and sharing their experiences. If you see somebody that’s saying something that you like or you’re looking at [00:39:00] their profile, be sure to share to follow them.
And many folks on here actually put their contact information or you could chat directly with them. So thanks for reminding us about that, Jeffrey. Okay, so let’s, I’m sorry, go ahead. You’re welcome. Oh, I just said, you’re welcome. But it’s true. That’s really the whole purpose of us being here and putting this time in each week.
It’s really to share ideas, to help each other out, to make connections. And, Startup Club is the largest club on Clubhouse. And I think any type of connection you want to make in the realm of startups, you could probably find that person in another member of Startup Club. All right, so let’s move on.
I have a few more things written down here that I can share and love to hear anybody’s, comments on it. Moving these ideas forward, vetting them, let’s just say vetting them, we’ve gotten to that point and now we’re trying to [00:40:00] get some funding or take it to the next level. Another tip is make sure you really understand what they call the market op opportunity, or let’s just say the addressable market.
A lot of folks will do these PowerPoints and they, they immediately try to jump to the mass market, which, I think most investors will realize that’s not realistic. So unless you have, like the next Tesla, let’s just say, or something like that, it’s highly advisable that you look on, you look at how do you reach, how do you size, what is the go to market plan for a niche?
A niche that you can actually address. And it may be through marketing, right? Direct marketing, or it may be through distributors. So really, be honest with yourself. Be hard on yourself and encourage other people to, that’s in your trusted circle of advisors. Don’t just look for [00:41:00] people that are going to tell you, like we said, what you want to hear, but people that actually have experience and that will give you, the hard knocks truth.
So that would be the next suggestion, is really, who is the addressable market? How are you going to reach and sell into them?
All right. And for me, one thing I found starting businesses, oftentimes it makes sense to go through distributors. Distributors can also be, a really a diamond in the rough, let’s just say, because what you might find is if you can partner with the right distributors, which we’ve done, Jeff and Colin and I in another company that just like it it really makes the company and oftentimes they might immediately want to acquire you.
The last company that we sold, we actually sold to our number one distributor, which was [00:42:00] God. , we took years and we built the relationship. We proved we worked together so well, and then they turned around and ended up acquiring us after about eight years. So don’t dismiss opportunities in partnerships. What I’ve seen a lot of new startups sometimes make the mistake about and we all make mistakes, is thinking Oh my gosh, I don’t wanna share my idea.
Or, Oh my gosh, I don’t wanna give away profits. But quite oftentimes it is really the difference between even getting started making a profit and being successful. Really leverage others. Don’t be afraid to look at partnerships. And, oftentimes these partnerships take years to develop. When you think about it, a partnership, think about it like you’re in it for the long run.
It’s, it is almost like a marriage, maybe even harder. So we, I see [00:43:00] how, and I hope I have your first name correct. Hal has joined the stage. Hal, you’ve been on Serial Entrepreneur before. You always have good comments for us. What can you tell our members here? Oh, that’s so sweet. I suffer from analysis paralysis.
It always has to be perfect before you start and all the advice you guys have always given is you have to start with version one before you get to version two and you just keep getting better over the years. AOL started with version 0.1, so the thing that a lot of people bring to me and for the audience we haven’t met before, I travel the country and do live shows and we’ve been in all the venues, all the biggest state fairs and home shows and car shows and auto shows, and the network we’re with has lots of the real estate, the good front corner booths, and prime real estate that’s been in the family for years.
The reason to bring that up [00:44:00] is we’re always looking for products. That wanna try to get live distribution. And to Michele’s point, when you’re a small company and a startup, and you’re always wondering, how do I test the waters? Whether it’s a small flea market or it’s a small home show, or if you have the production and the pallets of product and the team or the staff or the training, getting a booth at the the Texas State Fair is going on right now.
So that’s the reason I grabbed the mic, just to say hello and brush, if you want live distribution, that’s a channel we can get you into. I’m Hal and thanks for listening. That’s great. And you know what, Hal, I think I actually have a company I should contact you about. I like the way you termed it.
Live distribution because it’s funny, right? Everyone’s so focused on e-commerce and online, but there’s, certainly we should not dismiss, being face to face with [00:45:00] people. There’s a lot of value to be extracted there. And further, yeah, this coming November. There’s a Helen Brett, h e l e n b r e t, and it’s a gift show.
And so the buyers are there. So again, as a startup, sometimes you just have enough to do your local fair. Sometimes you have an idea that’ll just be in your local market share. Sometimes it’s that, maybe not a franchise, but it’s duplicatable and you can see it in every city across the market share. And there’s different levels of how you wanna reach the audience.
But if you’re trying to get a product into, Kroger’s or Lowe’s or all those big boxes the show in Vegas, the ASD show, it’s another great place. You hire somebody who can get you the spot, teach you how to market to the audience and take orders. But as the startup club will tell you, you can’t do that until you have all your processes in place.
So you start small [00:46:00] and again thanks for inviting me. Those are my thoughts and I look forward to hearing what else you folks having to say today.
Jeff you’re really good at, you know what Hal is saying as well? I’ve witnessed so many, times in person and learned from you at trade shows and different places to sell and get exposure. What are your suggestions? I think of you as like the king of doing these hacks and getting exposure even when you’re not as hell said, paying for the premium real.
I think that, to house’s point too, a, any time you have a chance to talk to a human being about your product and get real feedback, it’s gonna be valuable. And I think, we’re so used to throwing things up online now and sharing things digitally that I think many times it’s easy to forget the value.
Looking at someone’s reaction when you show them your product and getting that raw reaction, being able to ask them questions and more importantly, giving them the opportunity to [00:47:00] ask you questions, and find out, why did you pick that up off the table? What drew your attention to it?
Is this something you’d want in your house? Are you willing to pay for it? How much would you pay for it? Being able to get those kinds of questions face to face, I believe, and I’m not a psychologist, so there’s no science behind this, but I believe someone will answer you more honestly when you’re there face to face than if they were taking a survey and they’re anonymous, right?
When they’re looking you in the eye and telling you something, you know they’re gonna react differently than if they’re sitting at home on their computer and just checking off answers on a survey or something. That’s why surveys are tough, because yes, there’s statistical meaning behind them, but oftentimes when people take surveys they.
Give the answer that they think you want to hear, which may or may not be their real feelings. When you’re looking someone in the eye or looking in their face. Even if they say something, you might have a sense, Oh, they’re just saying that they don’t really mean it. Or if they genuinely are [00:48:00] excited by your product, they’re not gonna be able to hide that genuine excitement.
You’re gonna see it. When I worked for a company called Mixer, m y x e r we were in the ring tone business back when ring tones were a thing, and we came out with a new app, a new concept that was called Mixer Social Radio. And we wanted to get people’s real reactions. What we would do is we’d bring people in, hand them the the, have them install the app on their phone and we would videotape the whole experience and we had cameras in different places so that we could see their faces, not just see what they were doing on the screen, but so we could see their faces, we could see if they were frustrated.
And then we knew, oh, look, everyone when they get to this screen, they’re all paused and they all frown. So there’s gotta be something wrong there. So you have this opportunity to get real reactions when you can see and hear a real human being as opposed to just looking at a digital response from an online survey.
So I think how your point about that live distribution and getting in front of people, whether it’s a state fair or other events I’ve been in [00:49:00] situations where literally just go on a street corner, stop people and just ask for their opinion, show them something and ask for their opinion of it.
And and it’s those man in the street interviews and you can record them now, so then you can examine them later and say, The person said they liked it, but look at the face they’re actually making when they say that. I don’t think they really liked it. So there’s a lot of feedback you can get from dealing with humans in person as opposed to digitally.
If I can just piggyback on that, I can probably name 10 products that everyone in the audience would know that started at simply just one booth at one show. The most famous example is Crocs started at a boat show in Boston and pillow pets that ended up in every Walmart and product after product that made it national.
Started at one booth and one home show. I think that’s fodder. I kinda like that for, as an entrepreneurial.
Great examples. Yeah, really great examples. And it almost makes you [00:50:00] think, if you’re not doing it, why am I not doing it? It, yeah, it could be the simplest thing, right? It just requires your time. So thank you so much for contributing that both Ruben and how I think that’s a great suggestion for us to think about.
And on that note as well, I, for me, I think of that really lends very well into. Working up your pitch and practicing your pitch, practicing your value proposition, like it’s a great way when you have to actually talk to people, real people, right face to face, and do your pitch. Talk about your value prop.
Value proposition, like that really is invaluable information. They don’t know you, they don’t know what the heck you’re talking about. And if you can convert a customer real time or get their questions like you, you’ve made a huge jump forward.
All right, we are at the end of [00:51:00] our hour. I wanna just summarize some of the key points that have been brought up. We’ve had amazing discussion. There will be a blog post for this that Mimi below us will write give us about a week to get it live. And she’ll detail some of these suggestions in case you missed anything that you can use for reference.
All free of charge of course, as well as there’ll be a recording if you prefer to listen to the whole entire session. Some of the, great points that people have brought up is talking about really understanding your customer, making sure you’re solving some kind of need. And then it’s the other point that we’ve spent, the latter part of this conversation about is.
You really have to get out there and talk to people who are experienced to get feedback. Don’t be afraid to hear the bad as well as, and most importantly, or one [00:52:00] of the most important is talking to real potential clients. Real clients, even competitors can be a wealth of information.
So there’s a lot of things that we can do to help prepare ourself to be successful. Of course, everybody has a, many of us have ideas we wanna act on, but we really need to quickly establish, is this something that we wanna put our. Money into, and even sometimes more importantly, is just something that we wanna put our valuable time on.
Because at the end of the day, it’s all an opportunity cost and we all like to think that we’re working towards something that’s gonna be successful. There’s a lot of techniques that don’t cost very much, and just take some of our concentrated time. So focus on, getting that feedback, focus on getting it out there and getting suggestions before you jump in with your next great idea.
So [00:53:00] before we sign off, Jeff, what are your parting words of a device? I think this was a really great discussion and appreciate the positive comments in the chat about it. There’s so much, so many different angles to the startup world. That’s why, we’ve been doing this show and podcast now for over a year every Friday.
There’s literally. Hundreds, if not thousands of hours of great content, recorded content firstname.lastname@example.org on just about any topic. You can imagine. And it’s such a rich topic, and it’s such an important topic because what being an entrepreneur is all about, what. What starting a startup is all about in my opinion, is really it’s taking control of your own destiny.
And that doesn’t mean you can control that. You’re gonna be successful because the large majority of startups don’t succeed. And that’s just a fact of life. But you gotta try. It’s a numbers game, but you are taking control of your own destiny in that you. Creating your own chance, you’re giving yourself the opportunity that it [00:54:00] could be that big success.
And when you do have a successful business, even if it’s a moderate success, the fact that you’re able to create something that didn’t exist before, the fact that you’re able to create an income for you and your family and for your employees and partners and their families is probably one of the most rewarding things you can experience in business.
So it’s a very tough pursuit. There are a lot of times when it’s not fun. There’s a lot of times when it’s extremely painful. There are many ups and downs, more so than in any rollercoaster you’ll find at the amusement park. But at the end of the day, if you have the personality for it and the passion for it you are taking control of your own destiny, and that’s a great thing.
So that’s all I have to say, Michele. Thank you so much. So thank you for everyone that’s contributed. Jack, sorry Ruben and Hal and Jeff. This has been an amazing session and we’ll look forward to seeing everyone next week, Friday at 2:00 [00:55:00] PM Eastern. We’re here every single week cereal on Entrepreneur Secrets Revealed.
So if you want to follow us instead on a podcast, you can find us on any of your favorite podcast networks and we look forward to seeing you next week. Be sure to visit ww.startup.club to see other shows from the startup.club network as well as sign up for the newsletter. Thank you so much and everyone have an amazing weekend and be well.
Thank you. Thanks, Michele. Thanks everyone.