Dan Martell - March 21, 2016


How To Build A SaaS Product That People Love

Hosted by
Dan Martell
Mentioned
Clickable Prototypes Steve Blank Erica Rice Balsamiq Keynote Amiibo Stripe
How to Know if You Should Take on a New Project ｜ Dan Martell 7 Marketing Strategies Startups Can Learn Shady Internet Marketers ｜ Dan Martell

Episode Stats


Length

6 minutes

Words per minute

211.59

Word count

1,442

Sentence count

71

Harmful content

Hate speech

1

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In this episode, I talk about three different ways to validate your startup idea and how to ensure that you don t go and spend a ton of money and a lot of time building something that nobody wants. Because the truth is, when you start this startup game, there are no guarantees. From day one, you are almost guaranteed to fail because that's just the way it works.

Transcript

Transcript generated with Whisper (turbo).
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.000 How do you create a product that people love?
00:00:02.000 How do you ensure that you don't go and build
00:00:04.000 and spend a ton of money and a lot of time
00:00:06.000 building something that nobody wants?
00:00:08.000 How do you make sure that your company doesn't fail?
00:00:10.600 Because the truth is, when you start this startup game,
00:00:13.100 there's no guarantees.
00:00:14.600 I mean, honestly, from day one,
00:00:16.700 you're almost guaranteed to fail
00:00:17.900 because that's just the way it works.
00:00:19.900 So what I want to share with you guys in this video
00:00:21.800 is three different ways to essentially validate your ideas.
00:00:25.200 Because so many entrepreneurs, they start off
00:00:26.800 and they're like, okay, well, I've got this idea,
00:00:28.600 but I don't even know where to start.
00:00:29.800 I'm gonna walk you through my approach
00:00:31.900 and some of my beliefs around validating your startup idea.
00:00:34.800 The number one belief that I have is that I assume
00:00:37.980 that I'm wrong about some part of the business.
00:00:40.640 And it might sound crazy, if you think about it,
00:00:42.540 I start off by saying, okay, here's what I believe to be true.
00:00:45.140 There's a problem, there's a solution that could exist,
00:00:48.120 but I assume that I'm wrong about the solution.
00:00:50.720 And then what I try to do is I go out there and I validate it.
00:00:53.560 So one of the big difference between me
00:00:55.200 and a lot of other people is that I start off
00:00:57.420 with the assumption that I'm wrong.
00:00:59.160 Maybe you're like, well, how can you do that?
00:01:00.760 Because it's a little schizophrenic, think about it.
00:01:02.700 You've got on one part to be absolutely certain
00:01:04.960 that this is a good idea, to quit your job,
00:01:06.800 to invest hundreds of thousands of dollars,
00:01:08.260 to raise funding from other investors.
00:01:10.400 And on the same side, I'm telling you
00:01:12.140 to assume that you're wrong.
00:01:13.280 Isn't that crazy?
00:01:14.380 But what I'm saying is it's not wrong
00:01:16.340 about the overall problem and the opportunity,
00:01:18.880 it's wrong about the solution.
00:01:20.740 And what you want to figure out is what are the ways
00:01:22.480 that I can test and validate each step
00:01:25.120 of this product or solution in a way
00:01:27.320 that's not gonna cost me a bunch of time or money.
00:01:29.960 So the first one I'm gonna share with you guys
00:01:31.260 is clickable prototypes.
00:01:32.500 I learned this from a strategy called design thinking.
00:01:35.300 It's a whole framework around being creative
00:01:37.800 and building product, taking from kind of
00:01:39.340 industrial product design, and design thinking argues
00:01:42.900 that you should create paper prototypes.
00:01:44.540 So in the software world, the equivalent
00:01:46.240 is clickable prototypes, and I use Keynote,
00:01:48.880 or you can use PowerPoint.
00:01:51.320 Gosh forbid you have a Windows machine.
00:01:53.080 Just upgrade, do yourself a favor.
00:01:55.080 I know, okay, no more judgment.
00:01:57.480 Just create a clickable prototype.
00:01:59.180 And what's cool is you just, every, essentially,
00:02:01.560 slide becomes an interface in the product
00:02:03.620 and every button click just kind of links
00:02:05.760 to another slide that simulates the product.
00:02:08.560 That's a higher fidelity clickable prototype.
00:02:10.760 What I love about that is you can create a PDF document,
00:02:13.400 share that on emails, have people review it,
00:02:15.640 click it and give you feedback.
00:02:17.000 So it's real feedback based on something
00:02:19.140 they can put in their hands.
00:02:20.740 Most people, their validation is conversations.
00:02:23.480 And it's not even like a structured conversation.
00:02:25.880 Maybe you've done this.
00:02:27.080 It's kind of just conversations with friends saying,
00:02:29.320 yeah, that's a great idea, you should do it.
00:02:31.080 The biggest thing that you want to avoid
00:02:33.320 is spending six months of your life going down a path
00:02:36.720 because friends of yours said it was a good idea.
00:02:39.320 That is the fastest way to just lose morale, fail,
00:02:42.360 not build something awesome.
00:02:44.060 And this is why, to me, Clickable Prototypes
00:02:46.240 is the first of the three strategies,
00:02:47.980 but it's probably one of the most important ones
00:02:49.540 to just get your thinking straight.
00:02:51.480 Right, looking at these screens,
00:02:52.740 looking at the flows, thinking how the customer might
00:02:54.780 perceive the product and how they want to solve the problem
00:02:57.520 that you want to go out there and solve.
00:02:58.780 So clickable prototype.
00:02:59.740 The second one is what I call a pre-selling the customers
00:03:04.220 or using an EAP strategy or early adopters program strategy.
00:03:08.780 So a lot of people talk about pre-selling your product,
00:03:11.300 getting people to give you money up front,
00:03:13.520 but how do you do that?
00:03:14.960 And this strategy is a really simple way
00:03:17.640 because you go to potentially, my rule is 10,
00:03:21.440 if it's B2B, or 100 if it's consumers,
00:03:24.320 and you say, look, I'm working on this new idea,
00:03:26.720 it's early stage, but I think you'd be a great company,
00:03:29.620 you probably have this problem,
00:03:30.780 you can do some customer validation,
00:03:32.220 they say I have the problem, and here's the way it works.
00:03:35.060 Because you're part of the EAP program,
00:03:37.900 the early adopter program, we're gonna give you a discount.
00:03:40.460 You still need to get money from them.
00:03:43.160 Go through that learning experience,
00:03:45.160 purchase orders, receivables, legals,
00:03:48.060 like go through that experience of saying, okay,
00:03:50.660 and getting them to part with some money.
00:03:52.500 But by doing that, it'll allow you to co-create
00:03:55.140 the product with your customers.
00:03:56.860 It's invaluable.
00:03:57.700 So that's the second one, is pre-selling to customers
00:03:59.660 using the early adopter program.
00:04:01.780 The third is doing what I call a Mevo,
00:04:05.100 or a minimum economical viable offer.
00:04:07.820 Now, here's what's different.
00:04:09.120 In the world of lean startup, and most people totally
00:04:14.020 took this out of context, it's not what Steve Blank,
00:04:17.120 the author of Four Subsidy Epiphany says,
00:04:19.660 it's not what Eric Ries, who's one of my advisors
00:04:22.660 at my previous company, Clarity, and a good friend of mine,
00:04:24.900 a lot of entrepreneurs go straight to landing pages.
00:04:27.140 I'm gonna build a landing page and put the offer
00:04:29.280 and see if people will subscribe to my new startup.
00:04:33.200 That is the craziest thing ever, stop doing that.
00:04:36.580 That doesn't tell you anything because the truth is
00:04:39.440 is you're not gonna do any strategic marketing
00:04:42.120 of that landing page, you're probably gonna tweet it out,
00:04:44.220 you're probably gonna try to get some press,
00:04:45.820 and the people that are opting into it,
00:04:47.420 Maybe they have the problem, but giving you their email
00:04:50.880 address is by no means customer validation
00:04:53.560 in my humble opinion.
00:04:55.740 What I want to argue instead is you create Amiibo.
00:04:58.360 It's saying I'm gonna create an offer, a valuable offer,
00:05:01.720 in the minimum amount of features that I feel
00:05:03.940 that will get somebody to part with their money,
00:05:05.800 and I'm gonna create that landing page
00:05:07.820 and get them to sign up.
00:05:09.100 Even if the product doesn't exist on the back end.
00:05:10.920 It's what I use at my company, Flowtown.
00:05:13.300 And what you do is once they sign up,
00:05:14.720 if you have no product, just say,
00:05:15.720 hey, we're still early, we're releasing people
00:05:18.060 little bit by little, your credit card wasn't charged,
00:05:20.160 even though, again, you accept the credit card,
00:05:21.940 you can use different tools for that, like Stripe,
00:05:24.200 and say when we're ready, we're gonna let you know,
00:05:26.820 but that is true validation.
00:05:28.740 So real quick, I'm gonna walk you through
00:05:30.100 three of my top ways, and I kinda stack them
00:05:32.900 almost in this order.
00:05:34.100 The first one is creating a clickable prototype
00:05:37.240 using Keynote, or you can even use Balsamiq's a great tool.
00:05:40.700 The second one is doing pre-sells to customers
00:05:44.000 using the early adopter program, which is EAP.
00:05:46.400 It's just saying, look, let's co-create this together
00:05:48.400 because you're involved and you're giving us feedback.
00:05:50.400 We're giving it to you a discount.
00:05:51.740 And again, if at any point you decide
00:05:53.340 you don't want to build a company anymore,
00:05:54.480 you want to pivot away from that core customer,
00:05:57.080 you can do that, give their money back.
00:05:58.480 No big deal, no harm, no foul.
00:06:00.620 And then the third one is to really offer something
00:06:05.160 and get a credit card, get a transaction going.
00:06:07.620 Do a Meevo, a minimum economical valuable offer. 0.74
00:06:12.620 That is different.
00:06:13.400 It's not an MVP, it's actually getting people to land on a
00:06:16.640 landing page, you give them the offer and they buy it.
00:06:20.000 That is true validation.
00:06:21.800 If you know somebody that needs to learn these lessons,
00:06:25.820 please share this video with them.
00:06:27.880 I've had this conversation with so many entrepreneurs over the
00:06:30.580 last few weeks and I want to make sure that they understand
00:06:33.260 that doing a landing page and asking for emails is not
00:06:36.460 customer validation by any means whatsoever.
00:06:39.760 As per usual, I want to ask you to like and leave questions
00:06:42.660 below in the comments.
00:06:44.280 I want to challenge you to live a bigger life
00:06:46.100 and a bigger business, and I'll see you next Monday.