Tuesday, January 05, 2016
For personal reference
http://www.businessinsider.com/how-to-build-1-million-business-in-a-weekend-2015-12?IR=T&utm_content=buffer8671f&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer%3Fr%3DUS
We were both in hoodies and had a shared penchant for the F-bomb and burritos, all of which led to a caffeine-infused mind meld.
It would be the first of many.
The matchmaker then introducing us was the prophetic and profane Dave McClure, general partner of
500 Start-ups, which is now headquartered just down the street from Red Rock.
Mr. Noah has quite the start-up résumé.
He was employee No. 30 at Facebook, No. 4 at Mint, had previously worked for Intel (where he frequently took naps under his desk), and had turned down a six-figure offer from Yahoo.
Since we first met, Noah’s helped create Gambit, an online gaming payment platform and a multimillion-dollar business, and
AppSumo, loved by entrepreneurs and moms everywhere. He also helped pour fire on the
4-Hour Workweek and
4-Hour Body launches.
The purpose of this post is simple: to teach you how to get a $1 million business idea off the ground in one weekend, full of specific tools and tricks that Noah has used himself.
He will be your guide ...
Enter Noah
For some reason, people love to make excuses about why they haven’t created their dream business or even gotten started.
This is the “want-repreneur” epidemic, where people prevent themselves from ever actually doing the side project they always talk about over beers. The truth of the matter is that you don’t have to spend a lot of time building the foundation for a successful business. In most cases, it shouldn’t take you more than a couple days.
We made the original product for Gambit in a weekend. “WTF?!” Yes, a weekend. In just 48 hours, some friends and I created a simple product that grew to a $1 million-plus business within a year.
Same deal for
AppSumo. We were able to build the core product in one weekend, using an outsourced team in Pakistan, for a grand total of $60.
Don’t get me wrong — I’m not opposed to you trying to build a world-changing product that requires months of fine-tuning.
All I’m going to suggest is that you start with a much simpler essence of your product over the course of a weekend, rather than wasting time building something for weeks ... only to discover no one wants it.
I know what you’re thinking: “Yes, Noah, you are SO amazing (and handsome), but what can I do this weekend to start my own success story?”
Here are the steps you can take right now to get started on your million-dollar company:
Step 1: Find your (profitable) idea
At this stage, you are simply looking for something that people are willing to spend money on. So grab a seat and write down a list of ideas that you think might be profitable.
If you’re having trouble coming up with ideas, try using the methods below to speed the research process along:
Tim Ferris
Step 2: Find $1 million worth of customers
Now that you’ve found an idea, it’s time to assess whether there’s a big enough pool of prospective buyers. In this step, you’ll also want to ensure your market isn’t shrinking, and that it fares well compared to similar markets.
For example, let’s say you decide to build information products for owners of Chihuahuas (remember “Yo quiero Taco Bell”?). Here’s how I would check to see if there are enough customers:
Tim Ferris
We can see that the word “chihuahua” has a decent search volume (relative to “dogs”), and that “poodle” isn’t as popular. It also looks like the number of searches for “chihuahua” has been relatively stable for the last few years.
Tim Ferriss
Tim Ferriss
Tim Ferriss
You can also see if there is a large property that you can piggyback on.
PayPal did this with eBay,
Airbnb is doing it with Craigslist home listings, and
AppSumo looks to the 100 million LinkedIn users. If you can find a comparable site with a large number of potential customers, you’ll be in good shape.
What helped me with finding $1 million worth of customers for AppSumo was studying my successful competitors — specifically,
MacHeist.
For instance, you might research
Airbnb.com, discover that they have a profitable and growing marketplace, then decide to create a similar service for alternative verticals.
I like to create a Google Spreadsheet of the key numbers for my competitors’ businesses. Below is an example of what that might look like for MacHeist in their Mac bundles. [Warning to the haters: This may not be accurate, but I used these numbers just to get a rough idea of the business’ potential.]
Tim Ferriss
Step 3: Assess your customer’s value
Once you’ve found your idea and a big pool of potential customers, you’ll need to calculate the value of those customers. For our example above, we’ll need to estimate how much a Chihuahua owner (i.e., our customer) is worth to us.
This will help us determine the likelihood of them actually buying our product, and will also help with pricing. Here’s how we do that:
Tim Ferriss
Therefore, a Chihuahua’s average total cost of ownership is:
$650 + ($1,000 x 15) = $15,650
Damn ... you could buy a lot of burritos with that kind of cash. Silly dog owners.
In any case, these owners are already committing to spend a LOT of money on their dogs (i.e., they are valuable).
After putting down $650 on the dog itself and an average of $80/month on maintenance (aka food), spending $50 on an information product that could help them train their Chihuahua — or save money, or create a better relationship between them, etc. — does not seem unreasonable.
Of course, the product doesn’t have to cost $50, but we now have some perspective for later deciding on a price.
Now we need to use the TAM formula (aka Total Available Market formula), which will help us see our product’s potential to generate a million dollars.
Here’s the TAM formula for estimating your idea’s potential:
(Number of available customers) x (Value of each customer) = TAM
If TAM > $ million, then you can start your business.
Let’s plug in some basic numbers to see the TAM for our Chihuahua information product:
(84,260 available customers) x ($50 information product) = $4,213,000
We have a winner!
OK, obviously you are not going to reach 100% market penetration, but consider the following:
1. This is only through Facebook traffic.
2. This does not include the 5 million monthly searches for “Chihuahua” on Google:
Tim Ferriss
3. This is only for one breed of dog. If you find success with Chihuahuas, you can easily repeat the process many times with other dog breeds.
4. This is only for one product. It’s far easier to sell to an existing customer than it is to acquire new ones, so once we’ve built up a decent customer base, we can make even more products to sell to them.
By all measures, it appears that we have a million-dollar idea on our hands. Now we can move on to the final step!
Step 4: Validate your idea
By now, you have successfully verified that your idea has that special million-dollar potential. Feels good, right? Well, brace yourself — it’s time to test whether people will actually spend money on your product. In other words, is it truly commercially viable?
This step is critical. A lot of your ideas will seem great in theory, but you’ll never know if they’re going to work until you actually test your target market’s willingness to pay.
For instance, I believed AppSumo’s model would work just on gut-feeling alone, but I wasn’t 100% convinced people wanted to buy digital goods on a time-limited basis.
I mean, how often do people find themselves needing a productivity tool (compared with, for instance, how often they need to eat)?
I decided to validate AppSumo’s model by finding a guaranteed product I could sell, one with its own traffic source (i.e., customers).
Because I’m a frequent
Redditor and I knew they had an affordable
advertising system (in addition to 3 million-plus monthly users), I wanted to find a digital good that I could advertise on their site.
I noticed
Imgur.com was the most popular tool on Reddit for sharing images, and they offered a paid pro account option ($25/year). It was the perfect fit for my test run.
I cold-emailed the founder of Imgur, Alan Schaaf, and said that I wanted to bring him paying customers and would pay Imgur for each one. Alan is a great guy, and the idea of getting paid to receive more customers was not a tough sell. The stage was set!
Before we started the ad campaign, I set a personal validation goal for 100 sales, which would encourage me to keep going or figure out what was wrong with our model.
I decided on “100” after looking at my time value of money. If I could arrange a deal in two hours (find, secure, and launch), I wanted to have a return of at least $300 for those two hours of work. One hundred sales ($3 commission per sale) was that amount.
By the end of the campaign, we had sold more than 200 Imgur pro accounts. AppSumo.comwas born.
I share this story because it illustrates an important point: You need to make small, calculated bets on your ideas in order to validate them. Validation is absolutely essential for saving time and money, which will ultimately allow you to test as many of your ideas as possible.
Here are a couple methods for rapidly validating whether people will buy your product or not:
Tim Ferriss
Of course, there are other techniques for validating your product (like
Stephen Key leaving his guitar pick designs in a convenience store to see if people would try to buy them).
However, I’ve found these two methods to be super efficient and effective for validating ideas online. No need to get fancy if it does the trick.
The Final Frontier: Killing Your Inner Want-repreneur
We made it! You officially have a $1 million idea on your hands and you know for a fact that people are willing to pay for it. Now you can get started on actually building the product, creating your business, and freeing yourself from the rat race!
I can just see it ... You’re all nodding and thinking, “Hey, this Noah guy is pretty snazzy!” (Sorry ladies, I’m taken.)
So, what now?
– You are inspired. Check.
– You want to do something. Check.
– You get a link to a funny YouTube video, then you open up Reddit. Check.
– Suddenly, everything you thought you were going to do goes down the drain. Check.
– You and I softly weep. Check.
My flava was expressed on 1:58 PM
For my personal reference.
http://qz.com/584874/you-probably-know-to-ask-yourself-what-do-i-want-heres-a-way-better-question/
Everybody wants what feels good. Everyone wants to live a carefree, happy and easy life, to fall in love and have amazing sex and relationships, to look perfect and make money and be popular and well-respected and admired and a total baller to the point that people part like the Red Sea when you walk into the room.
Everyone would like that—it’s easy to like that.
If I ask you, “What do you want out of life?” and you say something like, “I want to
be happy and have a great family and a job I like,” it’s so ubiquitous that it doesn’t even mean anything.
A more interesting question, a question that perhaps you’ve never considered before, is what pain do you want in your life? What are you willing to struggle for? Because that seems to be a greater determinant of how our lives turn out.
Everybody wants to have an
amazing job and financial independence—but not everyone wants to suffer through 60-hour work weeks, long commutes, obnoxious paperwork, to navigate arbitrary corporate hierarchies and the blasé confines of an infinite cubicle hell. People want to be rich without
the risk, without the sacrifice, without the delayed gratification necessary to accumulate wealth.
Everybody wants to have great sex and an
awesome relationship—but not everyone is willing to go through the tough conversations, the awkward silences, the hurt feelings and the emotional psychodrama to get there. And so they settle. They settle and wonder “What if?” for years and years and until the question morphs from “What if?” into “Was that it?” And when the lawyers go home and the alimony check is in the mail they say, “What was that for?” if not for their lowered standards and expectations 20 years prior, then what for?
Because
happiness requires struggle. The positive is the side effect of handling the negative. You can only avoid negative experiences for so long before they come roaring back to life.
At the core of all human behavior, our needs are more or less similar. Positive experience is easy to handle. It’s negative experience that we all, by definition, struggle with. Therefore, what we get out of life is not determined by the good feelings we desire but by what bad feelings we’re
willing and able to sustain to get us to those good feelings.
People want an amazing physique. But you don’t end up with one unless you legitimately appreciate the pain and physical stress that comes with living inside a gym for hour upon hour, unless you love calculating and calibrating
the food you eat, planning your life out in tiny plate-sized portions.
People want to
start their own business or become financially independent. But you don’t end up a successful entrepreneur unless you find a way to appreciate the risk, the uncertainty, the repeated failures, and working insane hours on something you have no idea whether will be successful or not.
People want a partner, a spouse. But you don’t end up attracting
someone amazing without appreciating the emotional turbulence that comes with weathering rejections, building the sexual tension that never gets released, and staring blankly at a phone that never rings. It’s part of the game of love. You can’t win if you don’t play.
What determines your success isn’t “What do you want to enjoy?” The question is, “What pain do you want to sustain?” The quality of your life is not determined by the quality of your positive experiences but the quality of your negative experiences. And to get good at dealing with negative experiences is to get good at dealing with life.
There’s a lot of
crappy advice out there that says, “You’ve just got to want it enough!”
Everybody wants something. And everybody
wants something enough. They just aren’t aware of what it is they want, or rather, what they want “enough.”
Because if you want the benefits of something in life, you have to also want
the costs. If you want the beach body, you have to want the sweat, the soreness, the early mornings, and the hunger pangs. If you want the yacht, you have to also want the late nights, the risky business moves, and the possibility of pissing off a person or ten thousand.
If you find yourself wanting something month after month, year after year, yet nothing happens and you never come any closer to it, then maybe what you
actually want is a fantasy, an idealization, an image and a false promise. Maybe what you want isn’t what you want, you just enjoy wanting. Maybe you don’t actually want it at all.
Sometimes I ask people, “How do you choose to suffer?” These people tilt their heads and look at me like I have twelve noses. But I ask because that tells me far more about you than your desires and fantasies. Because you have to choose something. You can’t have a pain-free life. It can’t all be roses and unicorns. And ultimately that’s the hard question that matters. Pleasure is an easy question. And pretty much all of us have similar answers. The more interesting question is the pain. What is the pain that you want to sustain?
That answer will actually get you somewhere. It’s the question that can change your life. It’s what makes me me and you you. It’s what defines us and separates us and ultimately brings us together.
For most of my adolescence and young adulthood, I fantasized about being a musician — a rock star, in particular. Any badass
guitar song I heard, I would always close my eyes and envision myself up on stage playing it to the screams of the crowd, people absolutely losing their minds to my sweet finger-noodling. This fantasy could keep me occupied for hours on end. The fantasizing continued up through college, even after I dropped out of music school and stopped playing seriously. But even then it was never a question of if I’d ever be up playing in front of screaming crowds, but when. I was biding my time before I could invest the proper amount of time and effort into getting out there and making it work. First, I needed to finish school. Then, I needed to make money. Then, I needed to find the time. Then … and then nothing.
Despite fantasizing about this for over half of my life, the reality never came. And it took me a long time and a lot of negative experiences to finally figure out why: I didn’t actually want it.
I was in love with the result—the image of me on stage, people cheering, me rocking out, pouring my heart into what I’m playing—but I wasn’t in love with the process. And because of that, I failed at it. Repeatedly. Hell, I didn’t even try hard enough to fail at it. I hardly tried at all.
The daily drudgery of practicing, the logistics of finding a group and rehearsing, the pain of finding gigs and actually getting people to show up and give a shit. The broken strings, the blown tube amp, hauling 40 pounds of gear to and from rehearsals with no car. It’s a mountain of a dream and a mile-high climb to the top. And what it took me a long time to discover is that I didn’t like to climb much. I just liked to imagine the top.
Our culture would tell me that I’ve somehow failed myself, that I’m a quitter or a loser.
Self-help would say that I either wasn’t courageous enough, determined enough or I didn’t believe in myself enough. The entrepreneurial/start-up crowd would tell me that I chickened out on my dream and gave in to my conventional social conditioning. I’d be told to do affirmations or join a mastermind group or manifest or something.
But the truth is far less interesting than that: I thought I wanted something, but it turns out I didn’t. End of story.
I wanted the reward and not the struggle. I wanted the result and not the process. I was in love not with the fight but only the victory. And
life doesn’t work that way.
Who you are is defined by the values you are willing to struggle for. People who enjoy the struggles of a gym are the ones who get in good shape. People who enjoy long workweeks and the politics of the corporate ladder are the ones who move up it. People who enjoy the stresses and uncertainty of the starving artist lifestyle are ultimately the ones who live it and make it.
This is not a call for willpower or “grit.” This is not another admonishment of “no pain, no gain.”
This is the most simple and basic component of life: our struggles determine our successes. So choose your struggles wisely, my friend.
My flava was expressed on 1:23 PM