https://pinboard.in/u:rahuldave/public/ recent bookmarks from rahuldave 2011-09-29T19:29:29+00:00 http://feedproxy.google.com/~r/timferriss/~3/93NV6d2_SF0/ rahuldave Entrepreneurship https://pinboard.in/u:rahuldave/b:da05ccc7f8c8/ 2011-09-24T08:20:44+00:00 http://feedproxy.google.com/~r/timferriss/~3/1DOteox_gEc/ rahuldave $1,000,000, then you can start your business. Let’s plug in some basic numbers to see the TAM for our Chihuahua information product: (84,260 available customers) x ($50 information product) = $4,213,000 We have a winner! Okay, obviously you are not going to reach 100% market penetration, but consider the following… 1. This is only through Facebook traffic. 2. This does not include the 5,000,000 monthly searches for “Chihuahua” on Google: 3. This is only for one breed of dog. If you find success with Chihuahuas, you can easily repeat the process many times with other dog breeds. 4. This is only for one product. It’s far easier to sell to an existing customer than it is to acquire new ones, so once we’ve built up a decent customer base, we can make even more products to sell to them. By all measures, it appears that we have a million dollar idea on our hands. Now we can move on to the final step! Step 4: Validate your idea. By now, you have successfully verified that your idea has that special million-dollar-potential. Feels good, right? Well, brace yourself — it’s time to test whether people will actually spend money on your product. In other words, is it truly commercially viable? This step is critical. A lot of your ideas will seem great in theory, but you’ll never know if they’re going to work until you actually test your target market’s willingness to pay. For instance, I believed AppSumo’s model would work just on gut-feeling alone, but I wasn’t 100% convinced people wanted to buy digital goods on a time-limited basis. I mean, how often do people find themselves needing a productivity tool (compared with, for instance, how often they need to eat)? I decided to validate AppSumo’s model by finding a guaranteed product I could sell, one with its own traffic source (i.e. customers). Because I’m a frequent Redditor and I knew they had an affordable advertising system (in addition to 3 million+ monthly users), I wanted to find a digital good that I could advertise on their site. I noticed Imgur.com was the most popular tool on Reddit for sharing images, and they offered a paid pro account option ($25/year). It was the perfect fit for my test run. I cold-emailed the founder of Imgur, Alan Schaaf, and said that I wanted to bring him paying customers and would pay Imgur for each one. Alan is a great guy, and the idea of getting paid to receive more customers was not a tough sell :) The stage was set! Before we started the ad campaign, I set a personal validation goal for 100 sales, which would encourage me to keep going or figure out what was wrong with our model. I decided on “100″ after looking at my time value of money. If I could arrange a deal in two hours (find, secure, and launch), I wanted to have a return of at least $300 for those two hours of work. 100 sales ($3 commission per sale) was that amount. By the end of the campaign, we had sold more than 200 Imgur pro accounts. AppSumo.com was born. I share this story because it illustrates an important point: You need to make small calculated bets on your ideas in order to validate them. Validation is absolutely essential for saving time and money, which will ultimately allow you to test as many of your ideas as possible. Here are a couple methods for rapidly validating whether people will buy your product or not: Drive traffic to a basic sales page. This is the method Tim advocates in The 4-Hour Workweek. All you need to do is set up a sales page using Unbounce or WordPress, create a few ads to run on Google and/or Facebook, then evaluate your conversion rate for ad-clicks and collecting email addresses. This is how we launched Mint.com (see one of our original sales pages here). You are not looking for people to buy; you are simply gauging interest and gathering data. [Note: With Facebook advertising, $100 can get you roughly 100,000 people viewing your ad, and about 80 people visiting your site and potentially giving you their email addresses.] Email 10 people you know who would want your pseudo-product, then ask them to send payment via Paypal. This might sound a bit crazy, but you’re doing it to see what the overall response is like. If a few of them send payment, great! You now have validation and can build the product (or you can refund your friends and buy them all tacos for playing along). If they don’t bite, figure out why they don’t want your product. Again, the goal is to get validation for your product, not to rip off your friends. Of course, there are other techniques for validating your product (like Stephen Key leaving his guitar pick designs in a convenience store to see if people would try to buy them). However, I’ve found these two methods to be super efficient and effective for validating ideas online. No need to get fancy if it does the trick. The Final Frontier: Killing Your Inner Wantrepreneur We made it! You officially have a $1,000,000 idea on your hands and you know for a fact that people are willing to pay for it. Now you can get started on actually building the product, creating your business, and freeing yourself from the rat race! I can just see it… You’re all nodding and thinking, “Hey, this Noah guy is pretty snazzy!” (Sorry ladies, I’m taken.) So, what now? - You are inspired. Check. - You want to do something. Check. - You get a link to a funny YouTube video, then you open up Reddit. Check. - Suddenly, everything you thought you were going to do goes down the drain. Check. - You and I softly weep. Check. I want to challenge you! Whoever generates the most profit (not just revenue) within 14 days of this article will win some fantastic goodies. First, here are the basic rules and the process: - Contest void where prohibited. - The business/product must be new. This means either a landing page created from scratch using Unbounce or WordPress above, or via the latest Shopify competition (not too late to sign up). If from Shopify, it will be your *increase* in profit over the next 14 days vs. the prior 14 days, not the *total* profit of 14 days. - Results and proof of some type must be submitted as a comment below no later than 1am PST Saturday on October 8, 2011. Don’t cut it too close; if a timezone misjudgment knocks you out, we can’t make exceptions. - Put your 14-day profit number (or increase) in the FIRST line of your comment. - Ultimately, verifiable proof with lower number beats unverifiable proof with higher number. [NOTE: THIS CONTEST HAS ENDED. THANKS!] The prizes: - $1,000 credit from AppSumo.com - Roundtrip flights to Austin, Texas to have the most delicious tacos in the world with Noah Kagan, CEO of AppSumo. Sorry, but we can only cover flights within the USA. If you want to hoof it to the US, we can then pick up from there. - Above all: your $1,000,000 business, of course! Don’t let this post become another feather in your Wantrepreneurship cap. Just follow the steps and start working towards your $1,000,000 business! Remember, you can start laying the foundation for your product without building anything. All you need is one weekend. ]]> Entrepreneurship https://pinboard.in/u:rahuldave/b:8cee4cf96ba8/ 2011-04-19T02:16:21+00:00 http://feedproxy.google.com/~r/timferriss/~3/Pz8n48XM0co/ rahuldave Entrepreneurship https://pinboard.in/u:rahuldave/b:b247304b42e3/