Every business has 5 parts.
- Create something of value
- Create something other people want/need
- people willing to pay for
- satisfied expectations
- makes enough money to continue
Book Rec: The new business road test: to identify promising markets
4 core human drives
- Drive to Acquire: Obtain physical/immaterial objects
- Drive to Bond: Feel Valued/Loved
- Drive to Learn: Satisfy Curiosity
- Drive to Defend: Desire to protect ourselves, loved ones, property.
- Drive to Feel: Desire for new sensory stimulus, pleasure, excitement, anticipation.
(Remember..the power of anticipation)
.. The more drives ^ u connect with, the more attractive ur offer
10 ways to evaluate a market:
- Urgency: How badly do ppl want this now? (Movie first time on opening night -happens once vs Old movie)
- Market Size (how many ppl are already buying things like this?)
- Pricing Potential: Highest price customer would be willing to spend
- Cost of Customer Acquisition: How easy is it to acquire new customer? (cost of sale – money + effort) (Gov contractors vs rest. high traffic areas)
- Cost of Value Delivery: Cost of creating and delivering value (money + effort)
- Uniqueness: How unique is offering, easily imitable? (barriers)
- Speed to market: How quickly can create something to sell?
- Up-front investment: How much initial investment before first sale?
- Upsell Potential: Secondary offers that can be presented to customers?
- Evergreen Potential; After first sale, how much extra work req. to continue selling? (book vs consulting)
Rate b/w 0-10 (10 great) below 50, move on >75 , very promising 50-75, okay but not great iteration: WIGWAM Economics Values;
- Efficacy
- Speed
- Reliability
- Ease of Use
- Flexibility
- Status
- Aesthetic Appeal
- Emotion
- Cost
Book: Trade-off: what catches on? Two things: Convenience vs Fidelity Convenience: Quick, Reliable, Easy, Flexible, High Fidelity: Status, Aesthetic appeal, quality, emotional impact – Choose your tradeoff
Relative Importance Tradeoff – to understand what the customer prioritizes -USEFUL for survey .
Identify CIA’s – Critically important assumptions and test them
Shadow Testing – get customers to pre-order so you can test your CIA’s.
Fitbit example. Also dropbox.
Focus on the end result. ppl dont buy 1.25 inch nails, they buy the 1.25 inch holes
Create right narrative. Use hero’s journey example. Case studies to provee value or product.
For negotiations, selling read p.223 – barriers to purchase