Have a Painkiller Product, Not a Vitamin Product - Donald Kelly - Revenue Today - Episode # 044

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I think when Uber first started, one of the things that they did was they, instead of like, you know, they, they went out and started giving out free rides essentially, and, uh, from different tech scenes in, in, in California and San Francisco Bay Area. And what they started to see was that people were, you know, what people were— people interested in this ride, um, rather than taking a taxi cab. And they found out that people had interest in that. So they were doing some different things. And this is the sucky part when it comes towards, you know, determine product market fit. Like, it's not just something that's going to be, you know, determined right away. And that's where I think many founders and many CEOs and startups make a mistake, because as soon as they start their business, as soon as they get out there, soon as— like PD, they want to get a big office space and they want to hire a bunch of people and they want to push things out and they want to create culture and they want to have like a cereal bar in the kitchen because they feel like that's creating company. It's like playing house, so to speak. Like, no, before you get to that part, before you get to that part, that part, let's determine if there is even something that we need to, that we can actually bring to market, that we can actually have the salespeople selling it. We can actually have marketing to, you know, to bring out and to share with the world. We need to establish this thing first. And that's where it's the sucky part. It's just a lot of research and gathering information and doing the grunt work so you can make sure you fit. This is something that the customers want. Go back to the Platinum Rule, that we're treating others the way that they would like to be treated, that we're giving them something that they would want and it's something that they would use. And I'm gonna share with you some more questions that can help you with this as well. Number 3, I want you to focus on signal— excuse me, focus on a single vertical. I'm telling you, I mean, my company, the one I worked for, was like a case study for product-market fit horribleness because we were— again, go back to our situation, the story that I shared— we did not have one single vertical that we were focused on. We did not have one single, uh, customer. And now think about it, the problems that a dentist have compared to the problem that a rheumatologist have compared to the problem that a podiatrist has, it's kind of Different. Yes, they do service patients, and yes, they are medical professionals, but we also started throwing in chiropractors into the mix. And I remember going to a luncheon with a bunch of chiropractors, and we were just hoping that somehow maybe these folks will see the vision and they will want to get the solution as well. Mind you, they were paying for my salary and paying for several other salespeople's salaries. So the burn rate was like, it was, it was pretty extensive. And obviously that led to our demise eventually. I want you to focus on just a small segment, a small industry. Start notoriously with your small budgets, again, they want to spend a total— a lot of money. But establish an industry and focus on that industry and try to make sure you, you can actually fit, that you can actually solve that problem. And this kind of goes down to this idea too where, you know, sometimes we find that startups and companies wanted to look at their product as like a— as a— as almost like a vitamin. I want you to look at your product and see it as a It needs to be a painkiller. The services that you offer, is it a painkiller? And, uh, in, in, in, um, in my case as a sales professional, I wanna make sure that's gonna be something that's gonna be, you know, I can make money off of, right? I can go and sell that thing, that the, the something that my prospects will wanna buy. And your sales team obviously crave that because they're willing to, they're not gonna work for free. They wanna make sure they're successful as well. So think about the products that you have again and make sure you have a painkiller and not a vitamin. And you can determine that with those prospects that, excuse me, with those pro— those prospects and with your early research as you're trying to determine with your team. Go back to Spotify. Remember when Spotify first came on the scene as well? Spotify kind of, it kind of came in right after Napster and Napster did some good work in a sense, right? Napster found out that people love music and that we wanted to listen to music and we liked that community idea with music, right? And so from that point, however, Napster, they weren't, they had some challenges. Obviously we all know that, that led to their downfall and And then eventually when Spotify came around, they're like, wonder if we can do this. What if we were to go to the single segment of people, people who like music, who like community, and ask them, would they be willing to pay a small set fee and still take advantage of getting music? And funny thing was, yes, it was. And in some cases we could do that as well. We don't necessarily have to go and reinvent the wheel. We could take up where somebody may have failed, or we could take up a part where our customer, a competitor is, they maybe they have control of a part of that market, But is there something that they're missing that we can add onto? Perhaps they're selling chocolate, perhaps they're selling chocolate chip cookies. Is there a way that we can come in and test the market and see if people would like oatmeal raisin cookies? Hey, perhaps that is, and that's a new segment. But again, you don't necessarily have to reinvent the wheel and figure out if people want cookies in the first place. You know that already. You just build off of that. But essentially, again, don't make that judgment and jump out and start spending tons of money. Test it out first before you invest in buying the equipment. to make oatmeal cookies. Just like with Spotify, tried it and tested it out, and now they have like several, 200, 300 million users or whatever, crazy number. So test that piece out before you go. I see some questions coming in here. What is an indicator in sales that there is no product-market fit? Oh, that's a good question there. I think there's many different signals that you probably could find, but I like to say one of the things that are the lowest hanging fruit, that's out there for me to determine if there is a product market fit or not is obviously if people are buying it and if people are coming back and using that product over and over and using that product over and over again. So I might say, for instance, we might sell a, you know, say you have an app and that application, you know, you're getting a lot of people download this application, but what's their usage of that app like? I mean, are they using that like a week later? Is it something that they're, you know, every week when they look at their, their screen usage, is it something that they're using and something that's there in that group? And if And if it's not, then obviously that should be an indicator. So essentially that for you on that product side is again the usage. And then 2, in that situation is also the spend. Are people coming back and buying more? In my case, for instance, if it's our training programs, if somebody's coming into one of our training programs, are they investing in other programs that we have to offer? Are they taking part in some of our, you know, upselling into some of our other offerings? Or are they bringing other team members through? So those are some of the things that we look at. So depending on your industry, you wanna see the usage or see how that person is interacting impacting, and if they're continuing, and if they're coming back and buying it over and over again. Obviously, depending on the solution, if you're selling like a $100,000 solution, they're probably not going to come back every single week. However, the usage of that is going to be absolutely critical. Number 4, it's you want to make sure you spec— uh, excuse me, specify your value proposition. The value proposition just has to be down and has to be clear. We did not have that specific value proposition when I was working for that software that, uh, that Managed IT company. We just went and we were winging it according to what we felt was gonna be good as sales professionals. Nothing's concrete. And I remember once when the marketing team, they had us go out and collect business cards from these different doctors' offices because they felt that if we had a lot of business cards, we could then just blast them with different emails. And because of that, hit 'em over the head several times, our product will make sense to them. And that obviously we know doesn't necessarily work. It will not work. And it becomes— you automatically become a spammer in that case. The value proposition needs to be something clear. Determine your— what your customers' needs are with your product, and then offer that service, that's that solution to it. Figure out how you can outperform your competitors and surprise your customers by doing that. So let's say, for instance, go back to our cookies example. Say that my competitor make these amazing cookies, But perhaps my audience want that, they want that oatmeal raisin cookie. But is there a way I can make sure that my competitors are not necessarily gonna do that and then outshine me? Perhaps I can make mine with a little bit more organic materials, or perhaps I'm gonna have like maybe some, it's gonna be some health benefits and the calories are gonna be a little bit lower and it's gonna be maybe vegan. So I'm targeting and focusing on a different segment here. And I'm really trying to separate myself from the competitor and to make sure I stand out. And the surprising part is that it's gonna taste amazing and tastes good. So those are some things that you can look at when it comes towards that value proposition. How can I make sure I differentiate from that competitor? And then the 5th part, before we wrap up here, the 5th part that I want you to focus on is measure the product, the product market fit. Now, how do you go about measuring that product market fit? You want to measure your performance and manage your success by identifying those key points that you can track. Um, so you might start off by looking at the total addressable market. Or the TAM, and then otherwise, you know you can you can continue going. You can use the TAM to calculate multiple. Excuse me, you can use your TAM as a number for the people who are who are find benefit from the product that's divided by the service that you have to offer. So if everyone could use your product or your service, and then everyone divided by those who started using it. So if you're you know maybe you have this amazing software like we do. We had so many people that could potentially use it, and then actually people starting to use it, and we didn't measure that. So obviously our company. Our company did not thrive. Our company did not succeed. And that was a huge failure, a huge problem for, for us. And we see it again with many different startups where they start selling their product without necessarily knowing that information.

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