Dan Martell - How To Pre-Sell Your Software Product Before Building It

00:00:00.000 Hi there, Dan Martell here, serial entrepreneur, investor

00:00:02.340 and creator of SaaS Academy.

00:00:03.700 In this video, I'm gonna share with you how to pre-sell your

00:00:07.040 product before you even build it so that you don't have to waste

00:00:10.480 a bunch of time, energy and money to find out that nobody wants

00:00:13.240 to buy what you create and be sure to stay to the end where I

00:00:15.720 share with you access on how to get my idea to exit a mini

00:00:19.760 course where I go over a ton of different topics from how to get

00:00:23.360 your product built to how to get customer validation to managing

00:00:27.400 developers and all different aspects of scaling a software

00:00:31.040 business.

00:00:44.360 So I've been building software companies for 20 plus years

00:00:47.520 and I've learned so much about how to go to market, get

00:00:50.180 validation and really test an idea.

00:00:52.660 I remember we were building my company Flowtown.

00:00:54.760 It was really tough to figure out who our core customer was

00:00:57.400 gonna be and this is after we actually built some product,

00:01:00.800 put it out there to find out nobody wanted that solution.

00:01:03.840 So we went back to the whiteboard and we designed a test.

00:01:07.340 What we did is we said, okay, here's the minimum product

00:01:10.880 features, let's go find 20 customers to pay us $20, okay?

00:01:15.880 That was the criteria.

00:01:17.160 Me and my co-founder Ethan ran out, we were literally in San

00:01:19.660 Francisco, we run out into the street and we start going to

00:01:22.920 different friends' offices because everybody pretty much

00:01:25.360 works in a three mile radius and we just showed them the

00:01:28.220 prototype which is essentially like a screenshot.

00:01:30.500 It was just like a printed off version.

00:01:32.640 We said, does this make sense?

00:01:34.160 They're like, that's amazing.

00:01:35.400 When's it going to be ready?

00:01:36.240 Say, well, we'd love to have you as an early adopter.

00:01:38.480 All it's going to take is $20.

00:01:39.880 That gives you a discount on the future product cost.

00:01:42.540 Do you want to be involved?

00:01:43.680 And people started paying us and that's when we realized we

00:01:46.620 had some traction.

00:01:47.680 Then we went to the next level which we called a smoke test.

00:01:50.580 Essentially a Wizard of Oz.

00:01:51.960 We built a fake version of the interface that we mocked up

00:01:56.200 and then we sent an email to a couple hundred people

00:01:59.160 and asked them to fill out the,

00:02:00.700 like essentially simulate the software.

00:02:02.840 So Flowtown was a way to get social media data

00:02:05.240 on top of email addresses.

00:02:06.600 So essentially they had to fill in the emails into this form

00:02:09.640 and then we would tell them what it would cost

00:02:10.940 to process to get that social media data

00:02:13.080 and they would enter in a credit card or a PayPal payment.

00:02:15.980 The funny part is is none of that worked

00:02:18.280 and all we wanted to know is what percentage of people

00:02:20.820 would convert to paid so that we could test it.

00:02:23.360 Not only was there a demand, and this was after people

00:02:25.460 had already gave us $20 to validate that,

00:02:28.060 we wanted to run a smoke test to see if we could even

00:02:30.360 get people to pay without us knowing them

00:02:32.700 and sitting there and convincing them,

00:02:33.800 because sometimes people call me Sell Martell.

00:02:35.760 I get excited and I don't do true validation.

00:02:38.580 Instead, I'm trying to sell people on it.

00:02:40.340 And that was really the beginning of perfecting

00:02:43.580 the true product development that I'm gonna share

00:02:46.580 with you in this video.

00:02:48.380 Number one, list of early adopters.

00:02:50.980 Here's the challenge with most people that are trying to

00:02:53.420 validate a product is they make a list of companies that could be

00:02:57.080 potential customers but they never run in through the filter

00:02:59.960 of early adopters.

00:03:00.960 So if you've ever heard of the technology adoption curve,

00:03:05.540 essentially there's five different phases of technology

00:03:08.040 adoption and in the early days you want to find the early

00:03:11.200 adopters.

00:03:12.200 These are the people that wait in line for the iPhone,

00:03:14.900 have the latest gizmos and gears,

00:03:17.040 use the latest workflow software, collaboration software,

00:03:20.820 the latest apps on their iPhone.

00:03:22.440 These are people that are willing to deal with challenges

00:03:27.180 to be at the bleeding edge.

00:03:28.780 So if you were trying to sell software, for example,

00:03:31.220 to restaurants, you want to figure out what qualifies a

00:03:34.260 restaurant as considering an early adopter.

00:03:36.260 What is true about their business that will tell you that

00:03:40.160 they're into adopting technology early?

00:03:42.400 Because if you went to laggards or the late majority, 0.81

00:03:46.700 Those are people that might give you a false positive on it

00:03:51.180 being a bad idea just because they're not early adopters.

00:03:53.640 So for example, in the restaurant,

00:03:55.440 first thing I would do is do they have a Snapchat account

00:03:57.920 on their marketing website?

00:03:59.340 If they do, they're probably early adopters

00:04:01.780 and they would make the list but you have to make that list.

00:04:04.420 Build the hit list of early adopters to eventually go and

00:04:07.180 talk to you to validate your idea.

00:04:08.860 Number two, ask for advice.

00:04:11.220 One of my favorite quotes ever is ask for advice, get money.

00:04:16.220 ask for advice, get anything.

00:04:17.920 So whenever you're trying to reach out to a customer

00:04:20.260 and you wanna kind of validate with them,

00:04:22.000 don't go in there and say, I need to take your time,

00:04:23.820 dah, dah, dah, dah, dah.

00:04:24.720 Just say, I want to get your advice

00:04:26.640 on this idea we're building.

00:04:28.260 And walk them through it and validate their pains.

00:04:30.940 Validate the solution.

00:04:32.600 Ask them questions about, you know,

00:04:34.500 if you could wait, it's called the IPO question.

00:04:36.440 If you wave a magic wand and this problem was solved,

00:04:38.780 how would that look?

00:04:40.380 And that to me is probably the most important part

00:04:43.320 just getting through the list of early adopters

00:04:46.320 that you've built to, to get a conversation started with

00:04:49.260 the people always like, what do you say when you reach out?

00:04:51.160 I literally email and say, I'd love to get your advice on a

00:04:53.220 product that we're thinking of building.

00:04:54.900 You're incredible at what you do and I think it would be really

00:04:57.960 valuable, do you have seven minutes to jump on a quick call?

00:05:00.800 That is the most important step is just asking for advice.

00:05:04.840 Don't stress out too much, get them on the phone,

00:05:07.240 get in person meetings and start having a conversation.

00:05:10.740 Number three, validate pain and solution.

00:05:14.040 So in the book Four Steps to the Epiphany from Steve Blank,

00:05:17.880 I'm gonna link that up below, he talks about getting pre-orders.

00:05:21.360 And the whole idea about validating pain and solution is

00:05:25.020 not about changing your solution every time you get a

00:05:27.820 different pain.

00:05:28.660 This is where most founders screw up getting people to pre-buy

00:05:32.200 their software before they actually build it.

00:05:35.100 It's because by the end of this process, if you get 20, like I

00:05:38.900 20 early adopting customers paying you money and every time

00:05:43.440 you've talked to somebody, you've changed the solution,

00:05:46.540 then you're going to have to build 20 varieties of your

00:05:49.080 solution to meet that demand.

00:05:50.480 It's probably going to be overwhelming.

00:05:51.480 You probably don't have enough pre-sales to fund the product

00:05:53.940 development so you're not going to do it.

00:05:55.880 What you want to do is validate their pain and solution based

00:06:00.780 on one product set and just focus on that.

00:06:05.060 And until you find out that the market doesn't want that,

00:06:07.760 then you tweak it and go find another ten people to validate

00:06:11.400 it because if you keep changing your product for every piece

00:06:14.260 of feedback you got, then yes, you might get people interested

00:06:17.200 in your product but they're actually not interested on what

00:06:20.940 the core of it is.

00:06:22.180 They're interested because you overcame their objections.

00:06:24.880 So don't do that.

00:06:26.140 Validate the pain and your solution to that pain.

00:06:29.440 Number four, Mevo.

00:06:31.620 This is my favorite thing ever.

00:06:34.220 I believe that MVP is a dangerous word,

00:06:36.560 minimum viable product.

00:06:37.760 You might have heard this in The Lean Startup.

00:06:39.500 And the reason why it's got the P in there and the P is

00:06:42.540 essentially a whole lot of work.

00:06:43.940 If you think you need to build something to do true

00:06:47.040 validation, you're absolutely wrong.

00:06:49.600 And I think Eric would agree with this.

00:06:51.140 You don't have to build stuff.

00:06:52.340 You have to simulate this situation.

00:06:54.680 What I do is I call it a Meevo, a minimum economical

00:06:57.620 viable offer.

00:06:59.040 It's essentially something that is attractive enough for them

00:07:02.980 to buy, something simple.

00:07:04.560 It could be a one pager.

00:07:06.060 It could be a marketing site with a sales page.

00:07:08.800 It could be some screenshots.

00:07:10.060 But essentially you want to design a Mevo.

00:07:11.860 When Ethan, my co-founder and I went out and pre-sold Flowtown,

00:07:15.100 we designed a Mevo.

00:07:16.580 We went to the market, we did all these steps,

00:07:18.740 and we got people to pre-buy.

00:07:20.440 So essentially the Mevo is what's the minimum

00:07:23.640 economical viable offer that you could make.

00:07:26.320 And at the end of the conversation,

00:07:28.180 so the way the Flow works, if I put this whole thing together,

00:07:30.520 one, you want to figure out the early adopter list.

00:07:33.520 Then you want to ask them for advice.

00:07:35.280 You wanna validate their pain in your solution and only after

00:07:38.620 that if you feel like they're a fit for you as a customer that

00:07:41.520 you then make them an offer using the Mevo framework.

00:07:45.020 Just define it, it's minimum, it's an offer and they buy.

00:07:47.920 If you can do that at scale, you will be able to pre-sell your

00:07:52.300 product before you ever build anything.

00:07:54.660 Take that capital and then build the product that the

00:07:57.240 customers bought and deliver on it.

00:08:00.440 So real quick recap, one, list of early adopters,

00:08:03.400 Two, ask for advice.

00:08:05.100 Three, validate pain and solution.

00:08:06.960 And four, Mevo, make an offer.

00:08:09.940 That's how it's done.

00:08:11.380 So as I mentioned at the beginning of this video,

00:08:12.840 I want to share a free training.

00:08:14.880 It's called my Idea to Exit mini course.

00:08:16.680 Essentially, I go over six core modules about starting,

00:08:20.620 launching, building, marketing, funding,

00:08:24.280 and even exiting a software business.

00:08:26.520 So if you're interested in that, you can click the link below

00:08:28.600 to get access to my Idea to Exit mini course,

00:08:30.660 where I talk about, and I go in depth in all the concepts

00:08:33.160 I talked about in this video and a bunch of other nuances that

00:08:36.160 you may not have like the belief and mindset that you need to

00:08:39.400 be successful in building a software company.

00:08:41.860 Click the link below, get access to that.

00:08:43.500 If you like this video, I'd appreciate if you click the like

00:08:45.740 button, subscribe to the channel and as per usual, I want to

00:08:48.640 challenge you to live a bigger life and a bigger business.

00:08:50.920 I'll see you next Monday.

00:08:53.580 How to pre-sell your product before building it.

00:08:57.360 Oh na na na na na na na na na na na.

Dan Martell - November 05, 2018

How To Pre-Sell Your Software Product Before Building It

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