Category: Experience

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Will Anyone Buy my Product?

© by little bird feet

So you have a great idea for the next great product.  Excellent. You’re already ahead of people out there without ideas. Before you start building your product though, it’s helpful to find out if anyone will buy your product first. To do so, see if you can find the answers to the following questions.

1. What does your product do?

The good news is that you have a few choices here. But make sure you know the answer.

  • Does it solve a real problem that people are having?
  • Does it entertain people?
  • Does it make people feel better?
  • Does it make people laugh?

2. Is your product better than competing ones out there?

What would make someone choose your product over competing ones? Possibilities here include:

  • Is it cheaper?
  • Is it faster?
  • Does it have more features?
  • Is it simpler or easier to use?
  • Is it more convenient?
  • Is it more fun to use?

3. Is this a product that people will pay for?

Here’s where it gets tricky. There is a lot of content out there, and a lot of it is available for free. This might be ok for you, if you’re adopting a freemium strategy. It might not be so good if there is nothing in there that anyone would pay for.

If you don’t have the answer to this question, it might be worth doing some market research first. Even if you think you know the answer to this question, it might still be worth it to do some market research to confirm the validity of your product. You can start by answering the following questions.

  • Who is my target audience? Where can I find them? If you have a very specific target consumer, then try looking for forums where this type of consumer is likely to be. Make contact with them to see what issues they are having, whether your product addresses these issues, and whether they would be willing to pay for it.
  • What complaints do users of competing products have? Again, look for forums on competing sites, or comments on company blogs. Talk to users of competing products and see what complaints they have. Does your product address any of these issues?

If you can’t find the answers you want, then take out a Google or Facebook ad or two that advertises your product. Have it lead to a website that allows the user to leave their email address. If people click on your ad and leave their email address, then get in touch with them to see if they would be interested in your product. If nobody clicks on your ad, then you know you may be barking up the wrong tree.

You can also learn a lot from talking to real people – friends, family, neighbors etc. See if you can sell the concept of your product to them, and whether it is something they would purchase. You may be surprised by the answers you get.

By asking the above questions, and going through this process, you will know whether your product or idea has merit or not. If it turns out it doesn’t, you just saved yourself a lot of time and money.  If it ends up reconfirming what you already know, then use that to motivate you and give you confidence in pursuing the next step.

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6 Reasons Why I Don’t Want You to Outsource your Project to Me.

© by undefined

Most of my business has been based around my own projects, that were outsourced to others.  However from time to time, I’ve turned the tables and handled projects that others outsourced to me.  Most turned out fine. However there were some that were total disasters. Those are people I don’t want to work with again. Are you guilty of making the mistakes below? If so, do NOT send your projects to me.

  1. You think you know what you want, but you don’t.  My job is to implement what you tell me to do. However I can’t do that if your specifications are vague or unclear. Be specific.  Use mockups when it’s hard to explain in words.  Use mockups even otherwise.
  2. You don’t trust my input. I get it. You’re not a designer. You haven’t studied basic UI guidelines. I have the experience that you don’t. While it’s your project, I’ll chip in with my suggestions, when I think they will help you improve your product. If I create a great product for you, it helps my portfolio. If you ask me to implement your crappy design, then I know you’ll come back to me later with changes.
  3. You don’t pay for changes. Changes are inevitable. I get that. Once you get a chance to play with the actual demo, you’ll probably want to make changes (especially when you don’t listen to my earlier input). However don’t get mad when I tack on extra charges for any extra work required on my part.
  4. You don’t provide timely feedback.  I did my part by completing the tasks assigned to me. Now you need to do your part by evaluating my work and see if it matches your vision. Don’t make me wait for this feedback, as I can’t continue with other parts until we resolve this part first.
  5. You don’t respect my time. I have a secret for you. You’re not my only client. Lots of other people outsource their projects to me as well. I schedule time for your project, based on the original guidelines you give me. I also add on additional time to fix bugs and make changes, within reason. I already have another project lined up after this one. If this project cuts into that, I have to make accommodations, so you need to respect that.
  6. You don’t pay on time. We create milestones fora reason. Once the work has been completed and we move on to the next task, please release any payments that are due. I don’t like asking you to do that.

At the end of the day, I would rather work on a smaller project with a client who provides clear, logical instructions and who will value me and my time, than deal with you on a massive project, that requires a lot of running around and back and forth. Heck, I may even charge less to work with you, if you fixed all the issues above. So do that first, then get back to me.

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How to Finance your First Business

© by epSos.de

We read articles on Techcrunch everyday of new companies getting huge investments for their next breakthrough product. We dream that one day our own ideas can attract that much excitement (and investment).  So what are your funding options for starting an online business?

1. Borrow from people you know.

Ah yes, borrow from the three Fs – friends, family and fools!  I have done this a couple of times, with three different projects.  I had friends who had money, but no ideas.  I had tons of ideas but no money. It was a match made in heaven!

Make sure you have a backup plan if things don’t go according to plan (which they rarely do).  Your relationships should come first – so find a way to pay them back, if things don’t work out.

2. Borrow from people you don’t know.

This would of course be third party investment from angel investors or venture capitalists.  There would have to be some particular reason for them to invest in you though.  You may have the greatest idea in the world, but investors prefer to see the ability to execute first.  You could show them this ability to execute by doing any of the following:

  1. Have previous experience in startups.  Of course this becomes a chicken and egg situation – how do you have experience if they won’t give you the funding first?  Maybe try option 1 or 3 for your first few projects then, before coming to option 2.
  2. Have a great education from a name brand university.  One benefit of graduating from a good university is the connections that come along with it.  If you’re fortunate enough to have these connections, make use of them!
  3. Win a contest!  Join a startup weekend – go through the process and see what happens.  You’ll be able to make great connections, and even form a team of talented people willing to help you. Heck, if you’re good enough and lucky enough, you may even win.

3. Bootstrap: 

Bootstrapping refers to starting a business on your own, without any external help.  Just tap into that huge trust fund you have, and you’ll be all set!

What, you don’t have a trust fund?!  In that case, you’re in even better shape!  One of the benefits of bootstrapping is that you learn quickly to make your business profitable, since it’s the only way it’ll survive otherwise.

Figure out the cheapest, viable way to get your business started.  Reinvest any profits back into the business to keep improving it.  Raise prices as you raise the quality of your product.  Lather, rinse and repeat.

I’ve done this over and over with projects that look big and complicated today, but which started off as tiny projects, with incremental improvements over time.

Bootstrapping lets you prove your business worth to yourself and others.  Start with $100 and see if you can turn that into $200.  Then move up to $1000 and see if you can turn that into $2000.  Then work your way up to $10 000, $100 000 and later a million dollars!

Bootstrapping will take you through the school of hard knocks.  The pressure is all on you to perform. The buck stops with you.  Can you motivate yourself to succeed?  If you can’t, then how do you expect to lead a larger team later on?

If you fail, then figure out your mistakes and start again on a new project, until you can succeed.  No sense in moving to the next grade, if you can’t pass your current one.

Work your Way Up

In my short business career, I started with bootstrapping my first site, then later my own apps.  This experience gave me the courage to get friends to invest in me on bigger projects.  From there, I moved on to Startup Weekend, which the team I led recently won.  We are now working on a project that would be my biggest to date.

Every journey begins with the first step.  So don’t fret if the end seems so far away.  Work your way up. Enjoy the process.  Enjoy the scenery.  Make lots of friends.  You may need to borrow money from them later.

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How much should I charge for my Product?

Sale priceYou have done your market research and found the demand. You have now created a product to solve this demand.  So what should you price it at?

With traditional products, you figured out your costs to make the product, then added a sufficient markup to come up with a price.

You could also factor in supply and demand.  If your supplies were lower than the demand, you could charge more for your product, and vice versa.

With digital products, such as an ebook, access to a website or a software download, cost isn’t an issue.  Neither is supply.  So what other factors can you consider?

Competition:

You could take a look at what the competition is offering, and at what price they are selling it for.  If your product has less features, then sell it for less.  If your product has more features, then sell it for more.

Obviously there is more to it than that.  The competition’s price may have brand recognition included in the price.  So competing products without the same recognition have to price themselves lower, with the same features in order to compete.

There is a tablet war going on right now, with several companies selling their own tablets to compete with Apple’s iPad.  The initial batch of competing tablets had more features, and so were priced higher than the iPad.  Sales were disappointing, and they have since had to lower their prices to undercut the iPad, just to compete.

Customer Type:

Another angle to consider is what type of person you are trying to attract as your customer.  If you are competitive on price, then what types of customers will that attract?  I have experimented with pricing with my apps on the app store and have noticed that different prices attract different types of customers.

  • Free: The majority of customers on any of the mobile platforms have never purchased an app.  There is a huge selection of apps in the free category, so there is no need for this group to ever need to purchase an app with a price tag.  If you’re targeting this group, then you should have a good freemium strategy, or find other ways to benefit from them.
  • $0.99: This group loves bargains.  They look for apps that are on sale, and rarely purchase apps at full price.
  • $0.99-$4.99: This group will purchase apps that solve their need for the right price.
  • $5+: This group will purchase apps that solve their need, regardless of price.
  • Would you prefer to have 100 customers purchase your product at $1 each, or would you prefer 20 customers purchase your product at $5?  20 customers may require less support and maintenance than the 100 customers.  Then again those 100 customers might recommend your product to more people.  Which is more important to you?  Price accordingly.

Value:

At the end of the day, your product is worth what customers are willing to pay for it.  So your goal should be to show the value in it.  Things you could do to show value include:

  • Free trial.  Get your customer using your product, so that when the trial ends, they can’t live without it.  This strategy works especially well with products where a user has accumulated data, that they don’t want to lose when the trial ends.  Customers will pay more for products they are familiar with and have satisfactorily used before.
  • Feature Chart: Summarize the features your product has, versus competing products.  More checkmarks on your side should suggest more value for your product.
  • Segmented Products: If you’re targeting different customer types, then you can have separate products for each of them.  For example you could have a cheaper product for individuals, a more expensive one for small businesses and the most expensive one for large businesses that can afford it.
  • Choice Products: Another approach is to create a very expensive product, whose main purpose is to create value for the main product you want to promote.  This works with the segmented approach above.  Very few customers may purchase your most expensive product, but having it there creates additional value for the cheaper ones.
  • Bulk Price: People shop at Costco to get bulk pricing.  How can this apply to your business?  If you’re selling subscriptions, you can offer long term subscriptions for a cheaper per month cost.
  • Add-ons: You can also break down the price of a product into components that can be purchased separately.  This way customers can purchase the exact features they want.  I use this strategy in my Contact Manager app.  Add-ons are also easier sells since the customer is already sold on your product at that point.

Whatever pricing strategy you end up using, keep it simple for your customer.  Your customer already has to make a decision on whether to purchase your product or not.  Don’t also give them a decision of what product to buy as well.

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When should you Outsource?

© by Damek

Outsourcing has been recently viewed as the cure-all for many business problems.

  • Costs too high?  Eliminate some of your jobs, and outsource the rest.
  • Is there a skill that you need but don’t have?  Don’t fret – outsource that aspect.
  • Is your job getting too time consuming?  Not a problem – outsource it, so you can sit on a beach and drink margaritas all day.

Obviously things aren’t so simple.  Before you start outsourcing your life away, I’d first take stock of a few areas.

What are you good at?

Obviously if there is something you are good at yourself, then it may not be something you need to outsource.  Then again, just because you’re good at something doesn’t mean you want to always do it yourself.  If it’s an area that you’re confident in, you can still benefit from outsourcing it out for a cheaper price.  You can then use your skills to make sure the quality of the outsourcing is up to your standard.

What are you not good at, but need done?

Here is where you have to make the decision on whether you prefer having someone in-house versus having it outsourced.  I would recommend someone in-house when:

  1. There is a lot of explanation required, that would benefit from face to face interaction.
  2. There is enough work available for a person to work full time on it, or have regular part time hours doing it.
  3. It is an important enough job that you’re willing to pay more for someone locally to have it done.

I would recommend outsourcing it when:

  1. The workload is inconsistent and is on a project by project basis, rather than regular hours.
  2. Quality control can be maintained from afar.
  3. You are comfortable using online tools for communication such as email, screen sharing tools, Skype and other chat clients.
  4. You are able to transfer your vision into a document that your outsourcing counterpart would understand.

Other factors to consider:

Create your own set of rules for what you want your business to look like.  For me, I wanted to be the face of the business and handle all customer service issues myself.  So that was one part I didn’t outsource.  Fortunately it was quite manageable.  If it wasn’t, then I would have been forced to reconsider.

Make your own set of rules for what you want to do yourself, what you want your in house staff to handle and finally what you’re willing to outsource.  Doing so will go a long way towards improving the efficiency of your organization.

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How to Increase Sales and Satisfaction Through Add-Ons

© m.gifford

The freemium model introduces users to your content.  Your goal then is to offer something worth purchasing beyond the free content.  However don’t stop there.  Real fans will want more beyond that.  Make sure you have something to keep offering them.

My Chinese Learn Online (CLO) website attracts users with its free podcasts.  If they like what they hear, they can purchase a subscription.  Users continue the subscription in order to progress from basic to higher level content.

My CLO iPhone app is available for free.  If users like the content, they can purchase additional lessons.  If they like those, then more lessons are available for purchase beyond that.

My STL Contacts Manager app has a free version for users to try out.  If they are happy with it, they can purchase the full version.  If they are happy with that, then additional add-ons are also available for purchase.  My long term goal is to continue offering additional products beyond the app to satisfy the demand from current users.

If you have a choice between creating new products for a new market, or creating additional products for your existing market, choose the latter option first.

Your job should be for your products to continue fulfilling demand from the same audience.  This could be done by offering:

  1. Higher levels of difficulty (eg. language learning)
  2. Additional feature sets (eg.  iPhone app add-ons).
  3. Additional stories that continue a plotline (eg. sequels to books)
  4. Other products of the same genre (eg. line of cookware, fashion,
  5. Alternate ways to consume your content (eg. ebooks, mobile apps)

These add-on sales are a much easier sell since you are selling them to a group who is already satisfied with your product and actually wants to purchase more from you.  They would rather buy it from you.  But if you don’t offer it, then they will be forced to look elsewhere.  Don’t make them do that.