How To Pre-Sell Products People Actually Want

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I’ve been thinking about creating an online course for entrepreneurs, startup and professionals looking for a sea change to help them build SaaS based businesses with my knowledge of Lean Startup, Agile, Scrum and Product Management. While researching, I came across this absolute gem of a video about how Troy Dean and Kristina Romero, from wpelevation, used Lean Startup to test and successfully launch an online course to then be able to pivoted wpelevation’s business model. I’ve included the video which is 39:02 long. I’ve also elaborated how they used the Lean Startup principle, MVP, product development and technology to validate their business idea.

The Status Quo

At 2:44

The presenter discusses a conversation per-interview in which they highlight the major mistake that most course creators make when they first start out. They come up with the idea, they want it to be perfect, they go and confine themselves in solitude somewhere and spend all this time and energy and effort and money creating something and come out and say to the world “hey look what I’ve got” and hopefully people buy it. And, usually this approach flops because they’ve missed the mark on topic, content or didn’t have an audience then basically give up.

In 2015 I wrote a blog post “What I Learned Interviewing 40 Founders Who Raised Capital” in which I highlighted how most new startup founders think.

Person X has been in an industry for a while, is disgruntled with how the technology or industry is currently operating and comes up with an amazing idea that no one else is doing and thinks they can do it better, quicker, or cheaper. So, they put on their shiny red boots, don a cape and start wearing their underwear on the outside. They dig into their savings account, make everyone sign a non-disclosure agreement, set out trying to find a) a co-founder and b) a developer, go into stealth mode for months on end to build an enterprise solution that’s going to change the world only to find they are going to need to raise capital to finish the build and get it to market. They try to raise capital, find out it’s a lot more difficult than it looks in the movies, run out of money and fail. Or, find out they need to raise capital, having no clue how to raise capital, having to learn how to raise capital, go through a painful 6 – 9 month process of pitching, meetings, documentation, knocking on countless doors, countless rejections before eventually getting investment.

At 4:05

Troy explains how he made the same mistake above. The first course he created, FuelHQ, was about pouring fuel into your business and help WordPress developers get more clients. He spent four days over a long weekend with his business partner and ended up only selling five copies. Further, of the five students that signed up, only one joined the Facebook group which ended up being demoralising and battering his confidence.

So, how do you avoid this mistake? How do you avoid feeling like Troy? And how do you go about pre-selling a product that people actually want and will pay for? Read on…

From Course To Launch

Troy mentions he had coaching from Ash Maurya, author of Running Lean and applied the principles of Lean Startup to launching an online course. After analysis of what went wrong, Troy realised that, while he knew how to build the course, he didn’t have an effective sales machine to sell the online course. While he didn’t mention it specifically, my assumption is that he used the Lean Canvas and realised he didn’t have a unique value proposition or channel to market therefore couldn’t create the user persona or marketing collateral to them sell the product to customers.

Entrepreneurial Effectuation In Action

Troy says something which seems fairly inconsequential but is actually a core trait of entrepreneurial effectuation. He said “I had this kind of list of people on our email database that I knew were interested in something we were doing because we were giving away lots of free ebooks on our website that were doing really well. So, we had a list of about 8500 people in our email list and I knew that they were interested in business training but I didn’t know exactly what message I had to put in front of them to take action.”

In an entrepreneurial journal “Knowing what to do and doing what you know: Effectuation as a form of entrepreneurial expertise” written by Stuart Read and Saras Sarasvathy it states

“The theory of effectuation brings another perspective to the table. It suggests we need to give up ideas such as the successful personality, or clearly superior characteristics of the
successful firm or organization. …The focus in our journals and classrooms for example, would shift from “How to build a successful firm?” or “How to become a successful entrepreneur?” to “What types of ideas and opportunities should YOU pursue?” and “Given who you are, what you know, and whom you know, what types of economic and/or social artifacts can you, would you want to, and should you create?” The old adage about invention captures this shift rather pithily: Both the optimist and the pessimist contribute to successful inventions. The optimist invents the airplane; the pessimist, the parachute.”

Given who Troy is, the founder of wpelevation, what he knows… how to build online courses, along with who he knows… 8500 email subscribers, he applied the Lean Startup principles to find out how to build a course people would be interested in buying. Troy’s next step was to start emailing his email database of 8500 people. I’m not sure how many people he email but of all of the ones he did email, he received 451 responses. In the email he sent, there was a link to a less-than-perfect landing page. The landing page was designed to test the value proposition

“Attention WordPress consultants! Learn how to attract better clients, work on better projects and get paid better fees.”

His minimum criteria for success was “if 30 people buy this for $97, that’s $3000” which was enough for him to move to the next step. He also mentions “if ten people signed up, that’s going to kind of suck. If five people buy it, we’ll refund their money and pretend it never happened.” This experiment was also designed to test whether or not people would pay for a $120 webinar about business training and more specifically, pay Troy for business training. These were the assumptions he was testing as part of his experiment. Of the people he contacted, 87 bought it in the first 48 hours therefore validating his idea.

After the webinar, Troy sent out a survey to the 87 people that purchased, of which 55 people responded telling him they wanted him to build the membership site along with all the things they were after i.e. price point, forum, weekly training, monthly training, etc. This survey was another experiment to measure the need and engagement as opposed to there being a flurry of excitement and hype but no real substance behind it. Troy sums it up perfectly by stating

we had a theory, we had an experiment, we had a conclusion, we had results. Click To Tweet

That’s Lean Startup in a nutshell.

It was only after the idea had been validated that he created the actual slide deck and content for the webinar. Again, using what he knew about running a WordPress business, he taught what he knew and then opened it up to questions. This is actually where the magic happened. Troy mentioned he was on the webinar for 2.5 hours and after it finished went back through all the questions and answers to see how he could solve all the problems that had been highlighted. He’s essentially done a very condensed version of Customer Development and worked out what his market wanted and needed AND how to sell it to them. I’ve written a blog post about “How To Interview Like A Product Manager” which might help reaching out to your potential customers. From there, he used the information to create a course because he knew he had customers and knew exactly the curriculum they wanted. This approach helped him save an enormous amount of time and money and is exactly the opposite of how he created his first course and the status quo mentioned above. To put his success in perspective, his refund rate is less than 1% and his course completion rate is over 60% which is insane considering most online course completion rates are about 10%. One of the golden nuggets from this interview is the question

If you're paying $97 a month for something, what does it have to include for it to be a complete no-brainer for you to willingly give us that money every month Click To Tweet

Product Development

Once the idea has been validated, it’s time to build the actual product. During the interview, the question was asked “how do we take our students from zero to rock star in six weeks?” Based on their customer’s feedback they structured the course to have one module per week and six lessons in each module. From there, the questions was asked “what are the six big milestones that need to be reached to take our students from zero to rock star?” Within each milestone, what are the six action steps that they need to achieve so they can reach each milestone. Further to the point, everything within the course needed to be a template and action orientated type of thinking otherwise no one was going to achieve what was set out to be achieved. There is little point developing a course so people can hear how much you know and how awesome you think you are. It’s all about the customers and fulfilling their needs.

When creating the course, all the customer insights gathered from the webinar, interview and survey was used to create the content and copy so it resonated with the students. Along with the creation of the course and copy, Troy also created what he calls a “hero’s journey” eluding to Joseph Campbell’s “A Hero With A Thousand Faces.” In Product Management speak, that would be mapping out the customer’s journey from the very beginning of the online and offline sales funnel, all the major touch points, the emotions and the actions that need to be taken, right the way through the business into the retain and reactivate sections of the sales process. Note, this wasn’t done all up front before the product was launched. This was all done after the product was launched and over an extended period of time.

How To Ensure Our Course Is Successful Long Term

One marketing tactic that proved to be extremely successful after validation was to create two or three videos that were given away for free during the ramp up towards the launch of the course. This not only got the word out but also helped build a huge list of additional customers before the actual launch further validating the idea. Of the people who did not become customers, they did become raving fans because Troy provided a significant amount of value to help them solve one of their pressing issues. Another great tactic employed by Troy to increase sales was to use one of the six principles of persuasion, made famous by Dr Robert Cialdini’s book “Influence” – scarcity. Troy goes on further to say that, because of using an open/close cart tactic and a countdown timer, 40% of sales came in, in the last 48 hours.

More Insights From The Interview

  • Maybe it’s just a dud idea and no one wants to buy it. It doesn’t matter how great you think the idea is, the only opinion that matters is those people that are paying you
  • The tech stack Troy used for the test was Unbounce for the landing page, Eventbrite and GoToWebinar
  • If your in business your job is to understand your customer’s needs and to give them a solution that is irresistible and that they want to buy
  • Internet and technology should only be used to scale existing business model that already works
  • Only do what you need to do to move the needle and the only needle you need to move is how to sell this to customers
  • What have I learned about my customer today? Using this mindset saves you from disappointment
  • Your only job is to serve your customers
  • Who am I helping and how many people can I help today? Doing this will naturally build a community and bringing people together
  • There’s a direct correlation between how many people you help and the amount of money in your bank account

Conclusion

I think this is a great example of how an existing successful business used the Lean Startup methodology to validate their assumptions around a course idea they had. I also like the fact that not only did they have a theory, an experiment, a conclusion and results, but they also had a minimum criteria for success which so many people miss out on.

As always, if you like what you’ve read feel free to reach out or comment below.

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