Sometimes in business and really in life you hit a point where you just are not getting results as fast as you want to. While we could easily talk about health or money habits, we are going to focus solely on how to take your start up company from a venture capital sucking leech to succeeding and producing real revenue. Time to put some boots on the ground.
The 3 areas we will focus on are by far the most important areas of your start up. Usually one or two of them get ignored pretty consistently which leaves founders and co-founders in a sort of red eyed, up all night, type of purgatory between starting a business and making it thrive. The 3 areas are product development, marketing and management of money.
How Good is your Product? Really?
It isn’t enough to just believe in your product, it has to be good. The believing in your product part comes in the second area we will talk about – marketing. If your product sucks, no one will believe in it (not even you, deep down).
What you need to focus on is developing a product of value. It doesn’t matter if the product is physical or not, it just has to seemingly produce value to the user. Diapers, for example, are seemingly useless to most adults. However, no one is going to deny they create massive value to baby’s and those that parent them. They do create value for adults who have the cash to buy them!
If your product doesn’t have the potential to be valuable to people than you need to stop and start over. If it does have the potential, maybe you are just slacking on your marketing.
Your product is something that should be worked on every day and as you grow your user base you need to listen to their feedback.
Marketing Makes your Product a Reality
The most important type of marketing is word of mouth marketing and it is SO EASY to do if you have a good product. The problem is, most companies do not have a valuable product or simply do not know who they are targeting. Please check yourself at the door.
How is it easy? With the internet you have so many free tools to build relationships it’s scary. The most important things inside your initial start-up marketing plan should be:
1. Who could use my product?
2. Who are they listening to and following?
3. Build a list of these people
4. Contact them to give them free use in exchange for a review
5. Wash, rinse and repeat – again and again and again and again
With the above you are giving influencers in your industry free access to your product. Influencers… these are the people that your target market listen to and follow. If you have a useful product you will have no problem getting a ton of exposure. There are helpful sites like tomoson and buzzstream that can help you with this initial word of mouth campaign.
There are other methods of marketing that cost money such as pay per click advertising, social advertising, video (tv) and more. The word of mouth method can be done free and building relationships with relevant people in your industry is very important to your products success. We recommend that while your building relationships with key people, you also produce content that both they and their audience would want to consume. Valuable content to complement your valuable product.
Remember, if you have a good product that creates value to your target market, this is easy. It really comes down to what John Paul Dejoria said, “Successful people do all the things unsuccessful people don’t want to do”. Easy or not, it will be time consuming and you must persevere to make word of mouth marketing and key relationships work for your business on the daily. Relationships are the foundation of everything in life, not just marketing.Relationships are the foundation of everything in life, not just marketing. Click To Tweet
Assuming you have the first two things down…
1.) A product that kicks ass and creates huge value to your target marketing
2.) Educating the people about this product that will influence others
The third thing you must master is money and how you will monetize your product.
If it’s a physical product, its pretty fairly straight forward. If you are mass producing overseas you will want to take everything into account, including the customs cost when the product enters the boarder. You will want a distribution plan and a test phase before you go ape shit and buy 100,000 pieces of your first product ever. Get samples, test the market, build buzz. Trust us, physical product gone wrong can absolutely kill your business. Even though its unlikely that you will be perfect, know your profit margin ahead of time and plan enough of a safety gap that you will at least break even if heaven forbid no one wants your product (and especially at the price you are offering it at). Build off your successes and please have a savings and re-investment plan in place.
If your product is a virtual product like an online software or network that is hosted on a server, you have a lot less overhead to deal with but you shouldn’t mistake that for it being easy. In order for your virtual product to be successful, its the same as your physical product – you need to have buy in and it must create value. If its software you have you will probably be selling memberships. If its a network you will be selling ads (facebook, google) or taking fees for items sold (ebay, etsy).
Either way in the case of a virtual product, you must constantly put away money to plan for increased server cost and improving the initial code for the user experience. You will notice there will be a few customers that will be “bugging” you, but listen to these people – they could be your ticket out of start-up land. It’s always better to not pay yourself so much at first and keep building a better product so you can pay yourself A LOT later on.
By the way, I hate to be the one to break this to you, but you do not need a VC. At least, you won’t need one right off the bat. Use money from your current job. The best people to fund your business are your customers and the best way to get them is to A.) Have a good product and B.) Have good marketing.
Save your money and re-invest it in your business (people, servers, product,etc). Anything left after that, should be yours.
These three things are not novel ideas and you may think they are too basic, but the fact is they are the truth. Looking back we know Nikola Tesla’s Alternating Current was a better and safer electricity medium (product) than Edison’s Direct Current, but it wasn’t until the Chicago World Fair of 1893 that it was really believed. This word of mouth marketing spread fast and allowed AC to take off.
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