Is building a business a learnable skill? This was the big unknown when I quit my job.
Two months in, I’m leaning towards yes with a caveat. Your odds of success has one reliable predictor: how closely the opportunity mirrors what you’re already familiar with. In my case, I chose a small experiment close to home: downloading the skills I’ve honed into a Toolkit that helps anyone learn product skills faster.
200 customers and $22K in sales later, I’ve learned more about launching a new product than I ever have, whether it’s in the wilderness of the internet or the shelter of a company. Let’s start from the beginning.
Identify your assumptions
Every idea is a house of cards built on a set of assumptions. Every failed idea can be traced back to false assumptions.
Assumptions are all the things you believe that make an idea work. You can find them by asking: if this thing flops, what went wrong? By doing a pre-mortem, you reduce the likelihood of a post-mortem.
In my case, as with most new products, it can be summarized as: enough people who find this valuable can be reached for less than the cost they are willing to pay.
Lack of value is the most common hurdle. More things can be made than should be made. Lack of distribution is the most overlooked hurdle especially when launching something new. Most companies have a built-in customer base, but if you’re still small-time or if you’re trying to reach a new type of customer, distribution is key.
“If you build it, they will come” is only true when you have the luxury of pre-built distribution.
De-risk your assumptions
Confronting your assumptions is scary. They are the hidden landmines that blow up your dreams or chances of a promotion.
Talking to your high-intent customers is the best way to validate value and willingness to pay. Your ease of reaching said customer validates distribution. If you have a hard time even getting them to talk, this speaks volumes about the challenge ahead.
One of the perks of building an online audience that overlaps with your target customer is getting pre-built distribution. This is why Mode (analytics software) offers SQL tutorials. Or why ConvertKit (email marketing software) has a podcast interviewing newsletter writers.
I had the fortune of talking to engaged readers who left their emails in feedback forms. The upside of an audience is their willingness to entertain your ideas. The downside is they will be more kind to your ideas, which can lead to false hope.
Instead of asking: “Is X valuable?”, “Would you pay $Y for it?” get a more objective read through questions like: “What are your goals? What’s the biggest pain in getting to your goals? How are you currently solving for it? What separates the things you pay for vs. not?”
Open-ended questions allow people to tell you what they really think, not what they think you want to hear. It also helps you reconstruct their worldview, which deepens your intuition for how they would react to future questions.
Hone in on the decision-maker and their constellation of influences. The decision-maker for consumer products = the consumer, but that may not be true for business products. The gatekeeper determines adoption; the user of the product determines retention. Start with the gatekeeper.
Seek moment of truth
True validation of demand arrives when people pay. For a free product, this moment of truth emerges through the eagerness of your customers. Are they asking for details and follow-ups? Are they engaging with what you share?
You don’t need everyone to be jumping at the bit, but you do need to see excitement from a subset. Across-the-board lukewarm responses (“oh cool” followed by silence) is a bad sign. People don’t stick around for “oh cool”.
I’m a default skeptic, so I announced early access with a humble outline before I made anything. Early access also selects for the best first customers: forgiving of rough edges and patient with results. They help you shape your MVP, and give you a reason to keep going when your initial energy fizzles.
Beware of scope creep
I started with 10 topics, launched with 13, and now have 16. Cut your initial scope to a minimum because it will always, always expand.
I announced a Dec 30th early access launch date. This was stressful because I drastically underestimated the time it would take to build, so I had some long nights over the holidays. 🤦♀️
The silver lining of a deadline though is that it forces you to fight scope creep.
Your product is your world, but customers have their own full lives.
It’s tempting to disappear into a cave as you make the thing, but you go farther by building hype. Start a waitlist, and give a reason to join: early previews, special discounts, etc. This way, you launch into a pumped-up crowd, not an empty arena.
Share updates of your product. Photos and videos are particularly great — they deliver more dopamine per pixel! Also less work than you think because you can just use the stuff you’re already making.
I did very poorly at this step because I was scrambling to make a deadline, so budget accordingly and avoid my mistake. :)
The price is right
There are three common approaches to pricing: anchor on cost, competitors or value. Value is the favored child. But the right answer depends on your goals.
Every price is a trade-off between market share and profit. If your goal is to get as many customers as possible, you should price as low as your business can sustain on a cost basis. If you’re in a space with little differentiation between offerings (not a nice playground!), then you have little choice but price to competitors. If you’re in the wilderness and don’t have deep pockets, price to value is the way to survive.
Regardless of your approach, life gets a lot easier when you work on things that have a high ROI ceiling. When you make something great, you want customers to derive immense value and easily pay for the product many times over. Careers, for instance, can be a bottomless pit of stress, and the ROI for shortcuts is very high.
Whose feedback do you listen to?
Just like families, all happy customers are alike, but each unhappy customer is unhappy in its own way. Only a slight exaggeration.
First, figure out your happy profile. What do most of your promoters (happy customers) have in common? How are the detractors (unhappy customers) different?
Your detractors will ask for a lot. Sometimes, they are simply not the right customer. The closer they are to your happy profile, the more likely they are to ask for things that you should act on and will probably make your promoters even happier.
Having detractors is the price of growth — it’s surely better than apathy! Together, promoters and detractors show you how your product should be positioned. This is also how Superhuman CEO reverse-engineered product-market fit.
Choose your speed
There are three modes of building: short-term sprint, long-term jog, perpetual crawl. We like to believe that long-term sprints are possible, when in reality people get tired and do a worse job even if they continue showing up.
Short-term sprints make sense when time to market is of the essence. But long-term jogs are the most sustainable way to build great things.
What’s the moat?
A moat is the holy grail: a defensible advantage that keeps your product relevant over time. You don’t need a perfect answer from day one, but it’s important to invest in things that have moat potential. It’s exhausting being a feature factory.
Product Toolkit is not a marketplace with network effects, nor a viral social product.
The moat, however, comes from 6 years of specific and intense experiences. This is the product I could’ve only made at this moment. Eventually, I will have forgotten what it was like to be shaking in the PM trenches. But right now, I have vivid memories to channel into examples, templates and stories.
And the more people who use it, the better it gets through iteration.
I’m also fortunate to enjoy creating content. I’ve been writing every week for 9 months, but the other day, I realized this is actually my first 3rd attempt. In high school, I ran a national magazine. In college, I started a blog before they were cool.
Here’s to hoping that third time’s the charm!
If you haven’t already, subscribe and get a FREE welcome gift: 7 secrets to accelerate your career! 🎁
Excited to announce Product Toolkit 3.0 — more content on career and product development in a slicker format. Dropping new videos this week 🔥
Want to expense this? Here you go!
Thanks for reading!