- Hi there, Dan Martell here.
Serial entrepreneur, investor and creator of SaaS Academy.
In this video I'm gonna share with you how to pre-sell your
product before you even build it so that you don't have to waste
a bunch of time, energy and money to find out that nobody
wants to buy what you create and be sure to stay to the end where
I share with you access on how to get my "Idea to Exit"
mini-course where I go over a ton of different topics from how
to get your product built to how to get customer validation to
managing developers in all different aspects
of scaling a software business.
(upbeat music)
So I've been building software companies for 20-plus years and
I've learned so much about how to go to market,
get validation and really test an idea.
I remember when we were building my company Flowtown,
it was really tough to figure out who our core customer was
gonna be and this is after we actually built some product,
put it out there to find out nobody wanted that solution.
So we went back to the white board and we designed a test.
What we did is we said okay,
here's the minimum product features,
let's go find 20 customers to pay us $20. Okay?
That was the criteria.
Me and co-founder Ethan ran out,
we were literally in San Francisco.
We run out into the street and we start going to different
friends' offices 'cause pretty much everybody works
in a three mile radius.
And we just showed them the prototype which is essentially
like a screenshot.
It was just like a printed off version.
We said, "Does this make sense?"
They were like, "That's amazing. When it's gonna be ready?"
Say, "Well, we love to have you as an early adopter.
"All it's gonna take is $20.
"That gets you a discount on the future product cost.
"Do you want to be involved?"
And people started paying us.
And that's when we realized we had some traction.
Then we went to the next level which we called a smoke test.
Essentially a wizard of Oz.
We built a fake version of the interface that we mocked up and
then we sent an email to a couple hundred people and asked
them to fill out, essentially simulate the software.
So Flowtown was a way to get social media data
on top of email addresses.
So essentially they had to fill in the emails into this form and
then it would tell 'em what it would cost to process to get
that social media data and they would enter in
a credit card or a PayPal payment.
The funny part is is none of that worked and all we wanted to
know is what percentage of people would convert to paid so
that we could test it, not only was there a demand.
And this was after people had already gave us
$20 to validate that.
We wanted to run a smoke test to see if we could even get people
to pay without us knowing them and sitting there and convincing
them 'cause sometimes people call me "Sell Martell".
I get excited and I don't do true validation instead
I'm trying to sell people on it.
And that was really the beginning of perfecting the true
product development that I'm gonna share
with you in this video.
Number one, list of early adopters.
Here's the challenge with most people that are trying to
validate a product is they make a list of companies that could
be potential customers but they never run 'em through
the filter of early adopters.
So if you ever heard of the technology adoption curve,
essentially there's five different phases of technology
adoption and in the early days you want
to find the early adopters.
These are the people that wait in line for the iPhone,
have the latest gizmos and gears,
use the latest workflow software,
collaboration software, the latest apps on their iPhone.
These are people that are willing to deal with challenges
to be at the bleeding edge.
So if you are trying to sell software,
for example, to restaurants, you want to figure out what
qualifies a restaurant as considering an early adopter.
What is true about their business that will tell you that
they're into adopting technology early?
Because if you went to laggards or the late majority those are
people that might give you a false positive on it being a bad
idea just because they're not early adopters.
So for example in the restaurant,
first thing I would do is do they have a Snapchat account on
their marketing website?
If they do, they're probably early adopters
and they would make the list. But you have to make that list.
Build the hit list of early adopters to eventually go and
talk to to validate your idea.
Number two, ask for advice.
One of my favorite quotes ever is,
"Ask for advice, get money." Ask for advice, get anything.
So whenever you're trying to reach out to a customer and you
want to kind of validate with them,
don't go in there and say,
"I need to take your time, duh-duh-duh-duh."
Just say, "I want to get your advice on this idea
"we're building," and walk them through it and
validate their pains, validate the solution.
Ask them questions about, you know, if you could wave,
it's called the IPO question,
if you wave a magic wand and this problem was solved,
how would that look?
And that to me is probably the most important part of just
getting through the list of early adopters that you've built
to to get a conversation started.
People are always like, "What do you say when you reach out?"
I literally email and say, "I'd love to get your advice on
"a product we're thinking of building.
"You're incredible at what you do and
"I think it would be really valuable.
"Do you have seven minutes to jump on a quick call?"
That is the most important step is just asking for advice.
Don't stress out too much.
Get them on the phone, get in person meetings
and start having a conversation.
Number three, validate pain and solution.
So in the book "Four Steps to the Epiphany" from Steve Blank,
I'm gonna link that up below, he talks about getting pre-orders.
And the whole idea about validating pain and solution is
not about changing your solution every time
you get a different pain.
This is where most founders screw up getting people to
pre-buy their software before they actually build it is
because by the end of this process,
if you get 20 like I did, 20 early adopting customers paying
you money and every time you've talked to somebody you've
changed the solution, then you're gonna have to build 20
varieties of your solution to meet that demand
is probably gonna be overwhelming.
You probably don't have enough pre-sales to fund the product
development so you're not gonna do it.
What you want to do is validate their pain and solution based on
one product set and just focus on that.
And until you find out that the market doesn't want that then
you tweak it and go find another 10 people to validate it because
if you keep changing your product for every piece of
feedback you got then yes, you might get people interested in
your product but they're actually not interested
on what the core of it is.
They're interested because you overcame their objections
so don't do that.
Validate the pain and your solution to that pain.
Number four, MEVO.
This is my favorite thing ever.
I believe that MVP is a dangerous word,
minimum viable product.
You might have heard this in "The Lean Startup" and the
reason why it's got the P in there
and the P is essentially a whole lot of work.
If you think you need to build something to do true validation,
you're absolutely wrong
and I think Eric would agree with this.
You don't have to build stuff.
You have to simulate the situation.
What I do is I call it a MEVO, minimum economical viable offer.
It's essentially something that
is attractive enough for them to buy. Something simple.
It could be a one-pager.
It could be a marketing site with a sales page.
It could be some screen shots but essentially you want to
design a MEVO.
When Ethan, my co-founder, and I went out and pre-sold
Flowtown, we designed a MEVO.
We went to the market,
we did all these steps and we got people to pre-buy it.
So essentially the MEVO is
what's the minimum economical viable offer that you could make
and at the end of the conversation, so the way the
flow works if I put this whole thing together.
One, you want to figure out the early adopter list.
Then you want to ask them for advice.
You want to validate their pain and your solution and only after
that if you feel like they're a fit for you as a customer that
you then make them an offer using the MEVO framework.
Just define it, it's minimum, it's an offer and they buy.
If you can do that at scale you will be able to pre-sell your
product before you ever build anything.
Take that capital and then build the product that the customers
bought and deliver on it.
So real quick recap, one, list of early adopters.
Two, ask for advice.
Three, validate pain and solution
and four, MEVO. Make an offer.
That's how it's done.
So as I mentioned at the beginning of this video I want
to share a free training.
It's called my "Idea to Exit" mini-course.
Essentially I go over six core modules about starting,
launching, building, marketing, funding
and even exiting a software business.
So if you're interested in that, you can click the link below to
get access to my "Idea to Exit" mini-course where I talk about,
and I go in depth in all the concepts I talked about in this
video and a bunch of other nuances that you may not have
like the belief and mindset that you need to be successful in
building a software company.
Click the link below, get access to that.
If you liked this video,
I'd appreciate if you clicked the like button.
Subscribe to the channel and as per usual,
I want to challenge you to live a bigger life and a bigger
business and I'll see you next Monday.
How to pre-sell your product before building it.
(humming)