News & Events
Your Business Development Plan is Destroying Your Entrepreneurial Dream
- January 8, 2016
- Posted by: Leigh
- Category: Business
You’ve been sold a lie. I’m sorry to be the one to tell you, but you need to hear it. And you need to hear it now while you still have time to recover from your mistake.
The oft-repeated stories of brilliant inventors creating life-changing products and customers breaking down their doors to strip out stock before it’s even been completed are wrong.
Worse than wrong, they’re poisonous. They’re filling you head misguided ideas that at best, will cost you a year or two of your life, and at worst, chew through your life savings whilst your slave away attempting to replicate their success, leaving you penniless and distraught.
Here’s why: Do you know what’s the most critical element of building a new business?
Most people think it’s a great product. They follow the golden words once whispered over an empty corn field as Kevin Costner stared up at a star-lit sky: “Build it and they will come…”
They believe that all you need to do to create a thriving business is to build a great product and customers will come flooding through the doors. They’ll hear about it on the grapevine, your poorly produced amateur videos will go viral, and repeat customers will be emptying your warehouse before your next shipment has even landed in the country.
It would be amazing if business worked like this, but it rarely does. And by rarely, I mean basically never. There are tens-of-thousands of marketing professionals all around the world, paid a collective total of hundreds of millions of dollars a year to promote new and exciting products, and you think yours will just go viral by sharing a few well-timed photos on Instagram? Not likely.
The most realistic scenario (and one that’s been played out thousands of times across the airy expanse of open-plan co-working spaces across the globe) is that as you reach the bottom of your well thought-out product research and development checklist, you gaze up from your computer screen with naive eyes as you realise you’re running out of cash and only visitors on your website are spam marketing comments from automated bots.
Then, as you attempt to rectify this dire situation with your rapidly dwindling cash pool, you turn to a cheap but ‘guaranteed’ marketing team in some developing nation with no cultural knowledge of the market you’re trying to capture and even worse English skills, only to find out that your audience doesn’t respond to their ‘sure-fire’ customer acquisition techniques.
After three months of burning through the last of your free cash, you throw in the towel, bin the product, and have earnest, well-intentioned, but essentially meaningless conversations with your business partners about saving up enough money to ‘give this project the cash injection it needed to get over the edge!’
Yes, that’s the most likely path your future will follow if you persist with the product-first, build-it-and-they-will-come philosophy. Why? Because the single most important element in any company is not the product development team, it’s the marketing department.
It’s not your ability to produce a life-changing advancement in some cashed-up niche, it’s your ability to reach the people who need this and convince them you provide enough benefit that they should drop their current solution and come running.
Your ability to develop a new product is irrelevant to your success if no-one hears about it. You could be building a revolutionary product that will dramatically improve the lives of millions of people, but if those millions of people don’t know your product exists and you don’t have a channel to communicate with them, you don’t have a company. All you have are good intentions and a hole in your savings account.
The best marketer wins, every time. Always. Forever. In every situation. An average product that’s marketed well will destroy a well-designed product with average marketing. Yes, your product has to be solid and have the ability to deliver on the promises it makes, but you don’t need an original spark and life-changing differentiator to build a profitable company.
This is why I cringe when I hear about start-ups pumping their life savings into research and development: they’re leaving the single most important part of their company’s success as an afterthought to be focussed on when they’re done with the fun stuff.
There’s a better way to do it, a way that doesn’t involve burning through your life savings and leaving critical elements to hope and chance. And that way is to completely flip the process. Don’t start with developing the product, start with securing the customer.
Identify who your ideal client is, build a platform they want to engage (website, app, forum), and find ways to bring thousands of them in. Capture their email addresses, sign them up to your social platforms, get them engaging with your content, and build a following.
Once you’ve done that, once you’ve built a following of your ideal clients who’re engaged with your platform and want more of what you have to offer, then, and only then, move into the product development phase.
The marketing-first model is the easiest, simplest, and most profitable way to build a successful company. It has four benefits you’ll never see by following the product-first model:
- You can find out exactly what features your ideal clients want and what they don’t need
Building a new product typically requires a lot of guesswork. Without regular and easy access to a large pool of your ideal clients, you have to guess what features they want and what they’ll never use.
If you start by attracting clients and customers first, you’ll have a pool of your target market sitting on your doorstep you can ask about which benefits and features they’ll use and which ones are a waste of time.
- You have product testers right on your doorstep
Once your product has been built to the specifications of your ideal client, you can then get direct feedback on what they like and what you need to change. You don’t have to farm out the testing to close friends and business acquaintances who aren’t your exact target market. You can ask the people you eventually want to sell it to for direct feedback.
- You can test various product landing pages and funnels by becoming an affiliate for your competitors
Unless you have industry-specific web design and marketing experience, developing your marketing, tools, processes, systems, and funnels can be a challenge. Sure, you could just copy what everyone else is doing but how do you know which one is the best? Starting with customer acquisition is the fast track around this.
Unless you’re creating a brand new market (which very few people are doing), you’re going to have competitors. And unless you’re stuck in a backward industry that hasn’t caught up to the internet age, there’s a good chance you’re competing against someone who has some kind of referral program.
This means you have an opportunity to utilise your existing traffic to test out your competitors marketing funnels to see how they work.
You’ll get exact statistics about their marketing funnel’s conversion rates and get tested ideas for how to build yours.
- You can fund your own product build with the money you make from being an affiliate
Building a product always costs money. Even if you bring an equity partner into the business who can pump out your product on their own, they’re still going to need to be paid for their time so they can afford to eat.
Flipping the business model means instead of having to burn through your savings to create your untested and guess-work product. You can use the money you’re making from your marketing funnel to fund your tested and well-researched product.
Which ones sounds better to you?
Starting with your product and leaving customer acquisition till later down the road is an ineffective way to build a thriving company, because without customers, you have no company.
You need to flip your business model and start with customer acquisition. Doing this allows you to:
- Get direct feedback from your ideal clients as to what features and benefits they want and which ones they’ll never use
- Get your customers to test your product once it’s finished and help you iron out any bugs
- Test marketing tools and funnels by sending your traffic to your competitors
- Fund your product build without digging into your savings.
If you’d like those four benefits, start your new company by acquiring customers and see how much easier your life can be.