- Today, I'm gonna do a quick video
on something I've been thinking about a lot lately
which is the five factors that make a successful product.
For those that are new, I'm Davie Fogarty.
As you can see, I've had a phresh new trim,
I'm feeling phresh, energized, let's get into it.
The first factor that I do wanna talk about today
that is so, so important is being differentiated.
The best way that I can describe how important this is,
is a story of failure of my own.
When I launched Calming Blankets, it skyrocketed.
We were one of the first to markets
and we had a premium product.
Around 2020 Kmart launched the same version.
Kmart is a big department store,
their business model is bringing up products
that exist in the market,
dropping the quality and charging low prices.
While Calming Blankets was an amazing product
to helping so many people
a large portion of our customer base
actually started shopping with them instead.
You can see in the Google Trends Chart
that Kmart eventually overtook us.
This could have been avoidable
if we differentiated our product and made it unique
so that our customers valued it more than the Kmart version.
This story is really common with entrepreneurs,
they find a new trend and they launch it in that region.
They get great early success cause the truth is,
they are unique in that region.
While the product may exist
in a similar version somewhere else,
the truth is there's no E-commerce competition
for that product category.
So you are unique in your acquisition method.
You might be one of the first people
to market properly on Facebook.
While it is ideal for you
to completely custom make a product.
Sometimes that's just not viable
for early entrepreneurs.
You should look at regional opportunities,
fragmented markets where there's no competition
where you can come in
and you can make that acquisition method your own.
However, this doesn't last
which is exactly what happened in my situation.
This is where you should be really focusing on
what your customers actually value about your product.
For example, Calming Blankets, it improves sleep.
How could we create a protectable mode
around that product category
that helps our customers improve their sleep?
We could have introduced protectable software
that really measures sleep.
There's a lot of opportunities that we could have done
to protect ourselves and create that mode.
This mode is becoming more and more important
with Dropshippers, Amazon and even clearance outlets
as I've just mentioned.
So how do you know if you're unique?
This is a really, really tricky situation.
There's lots of free tools out there
like Google Trends
where you can actually search the product category
in each region to see if the trend is tipped or not.
You can use Ads by Tools, which I've talked about before.
You can also go to TikTok and other social media platforms.
You can even check the Facebook Ads Library
and search that product category
to really try to find competitors in that region.
One thing I will mention is that,
I have been developing a piece of software
that I'm going to be launching very, very soon.
The reason behind this software,
is I wanna make this process
as simple as possible for entrepreneurs.
It's going to compile features of all of those tools
that I've just mentioned giving you one click
and giving you a complete competitive landscape
of that trend.
If you're in interested in learning more about this software
or getting access, click the link in the bio
and sign up now.
The second factor of successful products
is good unit Economics.
This is so important and prevalent
in every single $100,000,000 product.
The reason for this is E-commerce
and Facebook advertising is getting more and more expensive.
You really need a healthy profit margin to actually launch
and advertise and acquire that customer.
For those that are new to E-commerce
you've got a simple equation.
You've got profit equals the sale of the product
the real retail price minus the cost of good
minus freight minus the courier cost minus taxes
minus customer acquisition cost, your marketing cost.
A lot of people will just go ahead and launch a trend
without really understanding these unit economics.
They'll look and they've got only 40% gross profit margin
which just isn't enough to actually acquire customers
in most situations.
Again, this is a huge research process to do
because you need to contact the suppliers
get the cost of the freight,
get the cost of the units
and even understand the three PO
how much they're gonna charge to fill the order
and get it to the customer.
I've handled this entire process
within our tool trend rocket
make sure you click the link and check it out.
That's the last time I'll mention the tool I promise.
The third factor that you really need
to have a really successful hundred million dollar product
is that it needs to be replenishable
or you can reinvigorate the audience in some way.
There's a lot of products out there
that are just a one trick pony
and they basically solve a problem
and there's no basic iterations that you can create
for that product.
While there are successful brands
that circulate around one product,
it isn't a great situation to be in.
This is why clothing and the audience is so great
because we can create at the cyclical product launch process
where we're introducing new patterns that are differentiated
through licensing to reengage our audience.
Another great example of this is the iPhone.
Each year, they had software and hardware updates
to engage their customer base again
and really reinforce their brand values.
The fourth factor that is often overlooked as well is,
is it achievable for you?
I hope that I'm talking to a lot of different levels
of entrepreneurs right now, and that is absolutely okay.
If you're just starting out,
you need to understand your skill sets and capabilities.
You can't go and launch the next iPhone.
You don't have the capital, you don't have the skills,
you don't have the knowledge.
And that's okay.
When I first started,
I tried launching a social media app with No Bullying.
It was positive compliments only.
I was trying to create algorithms
that found only positive statements and deleted bullies.
I had about $500 in my bank
and I had no idea what I was doing.
This is not an achievable task for me
especially with people like Facebook and Instagram
with huge network effects investing millions.
You need to consider things like research and development,
funding.
Do you even need molds to create that unique product?
How much legal research do you need to do
and invest in to make sure that your product isn't patented
or does it have registered designs?
You really need to understand what your circle
of competence is as well.
If you are really familiar with a niche such as surfing
because you've been a surfer all your life,
chances are you have a high circle of competence
for that product category
and you understand
that the product is going to be good for that market.
The final factor that we'll touch on
which isn't as important as the others
especially if you only want to create a 10,000,000
to a $100,000,000 product
is total addressable market.
This is a common term used
when addressing large software companies.
This is because they're trying
to create a billion dollar company with millions of users.
While a lot of the large E-commerce businesses out there
at the moment like Allbirds, Casper, Native Deodorant
they all have large total of addressable markets
because the product is widely used.
It is something to consider
if you are launching something that's so niche
that isn't gonna catch on is that you have less likelihood
of growing it to one astronomically large business.
That being said,
if you're just trying to start a small business
there is definitely a large enough customer demographic
in the world.
You're doing E-commerce,
so you can sell globally.
If you're feeling really overwhelmed
with your product process,
what I suggest is creating a nice little table
that addresses all of these factors.
You can have a red light, orange light
and green light system.
Basically create every single product idea
that you have every single business idea.
Then at the top put competition, are you unique?
Good unit economics, replenishable, achievable
and large TAM.
Now what you're gonna do is you're going to go,
for every single business idea,
you're either gonna put a red for it doesn't pass the test,
orange for it might pass the test,
green for it does pass the test.
And you can really visualize,
is this product satisfying all five factors
that we've chatted about today?
Once you've done that, I really suggest that you get an MVP
and just test with a very, very small budget.
Don't invest your life savings in anything.
You need to understand if it works.
You need to understand
if your customer acquisition costs fits
into your unit economics.
You need to understand is,
are you actually unique?
So is it going to scale in that region?
Can you differentiate for a long lifetime value?
Can you differentiate
to create a really strong brand that people love?
These are all of the answers
that you can do in a validation process.
Once you find that product though,
that you are really confident is the one,
make sure you're focused on it.
Don't get distracted by the next thing.
Keep reinvesting in your marketing funnels
and grow the business big.
If you've tried lots of products already,
don't get discouraged.
Keep going, keep looking at your marketing quality
because once you find that winning product, it is awesome.
Thanks for watching.
Don't forget to subscribe.
Peace.