Dan Martell - November 05, 2018


How To Pre-Sell Your Software Product Before Building It

Hosted by
Dan Martell
Mentioned
Mevo Ethan Sell Martell Steve Blank Eric
How To Raise Growth Minded Children How to Define The Ideal Customer Profile For Your B2B SaaS Company

Episode Stats


Length

9 minutes

Words per minute

200.9

Word count

1,811

Sentence count

93

Harmful content

Hate speech

1

sentences flagged


Summary

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

In this episode, Dan Martell talks about how to get your idea to market before you even start building your product so that you don t have to spend a bunch of time, energy and money to find out that nobody wants to buy what you create.

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 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.