Last summer I was living in a tiny, 16-square meter apartment in Paris near Strasbourg-Saint Denis. The weather in July was HOT. I’d stick my chair on the desk and work at a makeshift standing desk with the window open.
As inner-city Paris goes, Strasbourg-Saint Denis is pretty damn ghetto, so all sorts of streets noises wafted up to us on the 5th floor.
And, amongst the prostitutes and street hustlers, my girlfriend and I validated a business idea we had.
I think this account will be valuable to someone who wants to develop and ship a first product. That said, I’d use the same exact techniques if I was working for a SaaS company.
Ready? Here’s how it went down.
My girlfriend had a blog with about 4,000 monthly visits and an email list of about 250 people.
That’s frickin’ miniscule!
Your grandmother’s knitting blog probably does better than that.
My initial reaction was, “Wait until your email list gets to 3,000 people, and then we can start thinking about doing something with it”.
And then I thought about.
Based on human psychology, she’d be very unlikely to keep churning out blog posts, pitching guest posts and promoting her stuff online without seeing anything that looks like success.
And by success, I mean money (if that wasn’t clear). I was living in a TINY apartment in Paris
So, we decided to think about selling an informational product. Now, you’ll probably think that’s pretty scammy and/or lame.
Fair enough. Here’s my take: online video courses are pretty cheap to produce, so long as you have the necessary knowledge yourself, and they can deliver a lot of value to the students, assuming they learn a valuable new skill.
It’s actually a fairly common path for many tech industry titans.
As Amy Hoy points out, 37signals’ first product was an e-commerce search report for 79 dollars.
My takeaway is this: solving someone’s problem should come first, not the tool you use to solve it, such as software, a video or an ebook.
So, an online course it was.
The few people on the list had written in saying they’d love to start their own little freelancing business.
Top tip: when people subscribe to your list, make sure the confirmation email invites them to email you. This will be a fantastic source of information on your audience.
We’d been freelancers for the last two years. We weren’t rich, but we knew enough to help people go from zero to their first few paying clients.
And my girlfriend had done some one-on-one coaching with readers of the blog with great results.
So, let’s recap:
We had a business idea: an online course on getting your first few clients as a freelancer, and we had a tiny audience of 268 people on an email list in MailChimp.
The next step was to put our pitch for our non-existent product in front of our list of 268 subscribers, and see what they thought.
I wrote an email that described what freelancing had allowed us to do: go snowboarding in the Alps on a Monday, go surfing in the afternoons in Guadeloupe in the Caribbean and so forth.
Put simply, I sold the dream.
Then, I said who this course was PERFECT for (and who it wasn’t for). Obviously, it wasn’t for anyone who’d already had some success at freelancing, and it wasn’t for someone who wanted to create a product, for example.
I gave a high-level overview of what the course would entail, why they should follow it (and not another course).
Then, the call-to-action.
My call-to-action wasn’t a fancy tracked-link back to a sales page kicking off a sales funnel.
Nope, it just asked them to click reply and say if they were interested (I even wrote what they had to write) and, optionally, to say why they wanted to freelance.
“Just reply “I’m interested”
A ghetto sales setup for an Irish guy living in Paris’s finest ghetto. Perfect!
Are you interested in writing a sales email?
Here’s the breakdown of the one I wrote:
- Sell a dream or make a promise.
- Say who this is for and who this is not for. The more you exclude, the better the included feel.
- State what the offer is about. What will they get specifically? (in this case it was 12 twenty minute videos).
- Give them an idea of how the experience will feel like: will they feel pampered like as the Four Seasons? Crushed like ants like at an introductory CrossFit WOD? In this case, they’d be focused on taking small, specific steps every week towards getting a paying client.
- Ask them for some sign of interest.
Are you worried that this will mean an overly long email?
The short and simple answer is don’t worry about length; worry about making your email persuasive for the minority of people who will end up buying.
“Long emails won’t get read by most people, just the ones that end up buying” – bastardized version of a quote of a Very Famous Direct Response Marketer.
Here’s a screenshot from the campaign results in MailChimp:
And what happened next?
13 people said,” YES I’m interested”. Count me in.
The Three Emails Sales Series: When You Sell, Sell!
And so on we went on our business idea validation. It was time to find out if they’d be willing to pay the princely sum of 97 euro for this course.
So, I stood up at my desk, and I wrote three emails.
The first one was long and brutally honest. I said, listen, it’s going to be tough to find your first few gigs, especially if you’ve never done this before and you’re not a Ruby on Rails Dev or some wildly in-demand hipster.
But I asked this question: “Imagine yourself three months from now, 12 months from now, and you’ve successfully gotten your first couple of clients. How would you feel? Empowered?”
And what would happen if you didn’t do it? What would have changed?
This technique is subtle and wide-spread. Sales people might refer to it as the puppy-dog trick:
“I can understand you’re not sure about whether you want to buy this delightful puppy. Listen, here’s what I’ll do: I’ll leave the puppy with you in two weeks, and if you don’t want it when I come back, I’ll take it off your hands”.
Or put it this way, once you’ve thought about having something valuable in your life, it’s tough to think about going back to life without that valuable thing: be it a fixie bike, a sweet apartment or, in this case, an online course that teaches you how to freelance.
The next part was to go into detail about what each video would offer. I wrote little snippets of the crispy benefits each video would offer.
Finally, I stacked up this course against the other options: hiring a coach for 2,000 euro +, going to business school and so forth.
Only at that point did I provide a link to the paypal page where people could pay, and I let them know that the link would expire at the end of the week.
The next two emails were short and to the point: here’s the benefits to joining the course and here’s the link. The last email went out on the day the course closed.
Out of the 13 people who said they were interested, 6 people decided to buy.
In total, my first product launch had brought in 582 euro or about 600 dollars.
Now, we just had to build the f**cking thing!
The 150 euro Product investment (or was it 4150 euro?)
As I said earlier, online courses are fairly easy to produce compared to a SaaS product or a physical product.
Here’s the tools we used:
- Google docs for writing
- Camtasia for screen capture
- Wistia for video hosting (free up to 10 GB)
- Password-protected WordPress page template for delivering the course
- Samson Meteor Mic
- Sketch 3 for illustrations
- Mailchimp for sending out weekly emails
My girlfriend and I wrote out the script for each video, created a powerpoint presentation to go with it, and she’d go through the script and presentation while recording her screen using Camtasia.
Obviously, the big investment here was our time. Conservatively, I’d imagine we put in 200 hours in writing the scripts, creating the presentations, recording the screencasts, editing and uploading the videos.
Bill those hours out at just 20 euro an hour, and you’re looking at 4,000 euro investment in time, alone.
And this brings us to what I think is an important point about validating and launching your first product idea: you really can’t think in terms of a return on investment at this early stage.
I believe the value in having marketed, sold and created the first product outweighed the fact that we spent about 4150 euro, at a minimum, and brought in 582 euro maximum (assuming nobody refunded).
Truth be told, it was tough to ship a video, transcript, presentation and write up an email to send to the six students every week for 12 weeks. We were both working for a tech company in Berlin, and some days I’d have to come home after working all day and sit down to edit the video and upload it to Wistia.
But the fact that the students prepaid for the course and were impatiently awaiting the next “episode” meant that we felt 100% obligated to deliver each week.
In fact, one time we were at my parents house in Ireland, and we were trying to upload the video to Wistia on the crappy DSL line in the middle of the countryside, and one of the students sent an email demanding to know where her weekly video was!
The advantage of building the product in weekly intervals also meant that we could improve the product every week based on what we’d learned the week before.
My girlfriend got more confident speaking on the mic, and the powerpoint presentations were more and more polished.
How to Make Your Product Amazing for your First Customers
Now, when you launch an online course, it’s easy to lose your students, as they often will interest, become bored and forget about you.
It’s in your interest that your students succeed and get results from your course. Obviously, successful students are less likely to refund.
But honestly, that’s not the main reason.
Fundamentally, you need people to get value from your product, be it SaaS, an online course or a funny t-shirt.
Call the “Time-to-Value” metric or your value proposition, if you want.
How did we make 100% sure that our first 6 students got value from the course?
Well, we put in time to make sure this was the best course it could be. My girlfriend had tested the framework in one-on-one coaching. She’d tweaking aspects to improve it, and she’d gotten great results for her students.
It wasn’t some half-assed collection of ideas that she mumbled into the microphone.
But we also offered what the vast majority of online courses don’t offer: personalized attention via email.
Every week we’d send out an email with the link to the latest course video, but then a few days later we’d follow up with an email asking how it had gone and asking them to send their homework back to us if they were comfortable with that.
And when they did send us an email, my girlfriend and I would sit around a table with coffee discussing how we’d approach their problem. We’d research on the internet to find different approaches, and we’d send back thoughtful advice.
The Minow’s Advantage: You can be personal and thoughtful
That’s an advantage you have when you’re just starting out: you can really get inside your customers’ problems and find solutions for them (even if it’s not always exactly your problem).
And it pays off in the long term: Jason Lemkin at SaaSstr pointed out that your first customer may be or is likely to be just like your 1000th customer.
Therefore, if we sold this course 1,000 times, the 1000th customer would likely have the same problems, expectations and needs as this very first set of 6 customers.
The Most Terrifying Thing We Did: “Was it as good for you as it was for me?”
After three months, our first batch of customers had finished their course, and it was time to do something that terrified me: ask their feedback on their experience and areas we could improve on.
I really didn’t want to do this. I didn’t want to hear the truth! It’s a pattern I’ve also seen in Series A startups: they often don’t want to collect data because the truth might hurt, a lot!
The method of getting feedback was using a survey on Survey Monkey.
The approach I used for getting feedback was to look for qualitative feedback. I don’t care whether it’s “statistically significant”. We’re talking about a pool of six people here.
I just want, in their words, how they felt about the experience of taking the course, what they got from the course and how it could be improved.
Therefore, the questionnaire was four questions long, rather than 40 spread over 4 pages.
The result was that 3 people, or half of ‘em, gave detailed, qualitative feedback, which I find much more useful than pages and pages of multiple choice answers.
What would I have done differently?
In hindsight, the product itself was far too big. It took 3 months of weekly work on it to ship the entire product. And my girlfriend already had a one-on-one coaching version of it that she could adapt.
Amy Hoy recommends that your first product should be a tiny product such as a short e-book or online course.
So, I’d do a 4-video course instead over 4 weeks.
Secondly, I’d make the course even more interactive. I think you can’t spend enough time emailing and talking with your first few customers, so I’d set up Google hangouts with them on a weekly basis.
Depending on your situation, you could even make the course tinier still: Pat Maddox over at RubySteps had a 48-hour product challenge and he charged 11 dollars for his ebook. I bought it, and really enjoyed it!
After Validating the Product Idea, the Fun Just Begins!
We’ve since worked on the product even further. Being the nerd I am, I built a custom wordpress site with a sales page, checkout, payments via PayPal, logins for students, a link-up to an automated series of course emails via MailChimp once people signup and automatic drip-feeding of content.
That was all possible because I knew we had validated our product idea. I could invest more time in it. Recently, we re-opened the course on the new system with a price point at 497 euro or three times 197 euro, and we got 5 students for a total income of about 2,500 euro on a list that was 620 people.
That’s almost four times the revenue the first time around, just by increasing the price and building a better delivery method.
I’m reasonably confident that we can now invest the time to grow the email list to 6,000 people and we’ll have a business that could bring in 50,000 euro a year just within this one course opening twice a year.
And we’ll help a boatload of people have fun in the process!
Let’s Have a Chat!
If you’ve gotten this far, you’ve either had the patience of a monk, or you’re really interested in making your first product.
I love talking to people who also want to make products.
So, if you have an idea you’d love to discuss, let’s schedule a call here. We’ll chat about your idea, how you could validate following a lean model and next steps. And you can tell me what’s worked for you in the past. I think we’ll both learn!