MBA1779 How to Validate Your Next Idea

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Hey oh. Welcome to the 100. Welcome to the Dollar MBA show your personal guide to a better business every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and in today's lesson you will learn how to validate your next idea. When we start a business, when we start a new product or service, a lot of ideas and energy starts flowing and it's an exciting time. But it's also a critical and possibly dangerous time for your business. Why? Because if you don't validate that the marketplace actually wants and will buy your product, you are in a world of hurt. Because you're going to have a lot of sunk costs, a lot of time and energy and money spent in creating and putting this product together. Whether it's a product that's physical or a course or training or a piece of software, whatever it is, you're going to work your your way up to the point where you can sell it to other people. And if it totally flops, there goes six months, there goes six grand or 600 grand. It's enough to make people just hang them up and quit and I'm here to stop that. As an entrepreneur, one of the things you should be busy doing is validating ideas. There are so many ideas I had to validate before I released what has now become a success webinar Ninja, my software. And even with that software, there are features and functionalities that I need to validate before working on. I'm going to walk you through the process of how to validate your next business idea, product, service, whatever it is, and how to save yourself time, money and effort in the process of finding a winner. So let's get into it. Let's get down to business.

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And I put the word next because if you have started your first business, your first product, that's actually a pretty good learning experience, understanding how to do it. You're going to learn a lot through your mistakes and through your efforts. The next time around you're going to be a little bit more careful. And this is kind of targeted to those people not to make the same mistakes. Now when I say validate, I mean you actually know for sure that people will pay for what you have to offer, whatever that product is. Now I know you might be thinking, Omar, how will I be able to sell something before I actually make it? How will I actually be able to deliver this to the actual customer? Easy. Ask for their money beforehand. It's called a presale and it happens all the time. I actually sold the first version of webinar Ninja that way back in 2014. To validate the need for a webinar software like ours. I actually asked my audience, which was small at the time, very small. This is pre $100 MBA show. Hey, I have something here for sale that I'm going to create. Press this button. Pay me money to be a founding member and you will get first access. And you know this is a special discounted rate. It's that simple. Yes. You can show things with a slideshow. You can show Mockups, you can show designs. If it's a software, you can walk them through the process. If it's coaching or training, you can show them the results. This is really what people are buying. They're pre buying results. Your product, service, whatever it is, it's going to produce a result, a transformation, it's going to do a job for them, right? And at the end of the day, people buy the promise, right? The promise of a solution. So if you can sell that and people actually want it, then you know you have a valid idea. So I'm gonna walk you through. How do you get up to that point where you actually pre sell your product? Well, let's say you have an idea and you want to make sure that people actually want this product. Well, the easiest way to know if somebody wants something is to find out if they need it. If there's a problem that you're solving with this product, does the problem even exist? So if you have a current email list or current, you know, user base or customer base, you can ask these customers, you can ask them, hey, what are some of the things you hate about xyz? And XYZ is the area of what your product or solution solves. For example, I'm going to walk you through what we did with Webinar Ninja back in 2014. We ask people, what do you hate about running webinars? What do you hate about the tools you're using right now? What are the tools you're using right now? How are you running webinars? What is the system or the setup you have to go through to make it happen? You're asking them these open ended questions to learn what are the friction points, where are some areas that you can improve? And what we learned in those questions is that people hated using multiple tools. They thought it was confusing, it was a lot of work and it was really expensive. Because all these tools start to add up. They also don't work together very easily. They don't talk to each other very easily, they don't integrate. That's something also you learn through that process. And then a little nugget came out of it where it says, I want to be able to easily charge for my sessions. And there's no easy way to do that. I have to do that outside with my website and then I have to somehow give them access. It's a little bit of a pain. And that's why Webinar Ninja is one of the best webinar softwares out there. Because we're only one of the Few that actually has paid integration. And it's because of that insight that we got from our customer and we said, this is something we need to really make sure we include in our product. Now, you may not like the answers that you're hearing from customers because I've had that. I've asked customers questions about new features inside of Webinar Ninja and I'm like, this feature is going to be amazing. I want this so bad. Then I asked a whole bunch of customers and I realized they don't really need this. The pain is not strong enough. They have another solution for this problem and that solution is okay enough. They don't hate it, it's alright. And you got to be able to say, all right, what can I learn from this? What can I build that can solve a problem? What can I offer them that is annoying them as a solution to that annoyance? And being able to what they say, kill your darlings. You know, let go of an idea that you find dear because you know people don't want it. Now once you've nailed and you know that you can solve a problem for somebody with your product or solution, now you got to pre sell it. And it's actually quite simple. Invite your best customers to a webinar and on that webinar you're going to just present demo what this product is. You can use slides, you can use mock ups, you can use examples, you can use testimonials from past clients. You can use results before and after pictures of maybe some beta users or beta customers. You don't have a product yet, but you need to validate that people are willing to pay for this product because it's easy for someone to say I love this idea when you present it to them if they don't actually have to take out their wallet. You need to make sure they love it enough to pay for it. Even if paying for it is a discounted rate. A lot of what people do is they give a founder's discount. The first hundred customers, for example, they get a 50% discount their first year. That's a huge discount. It encourages people to invest and to take that leap of faith that this product is going to be something that turns out to be pretty good. But at the same time, you make sure people have skin in the game. They're actually putting up money so they can use this product when it releases. And you basically make an offer, don't worry about how am I going to charge them. And what about usership? This is something that you should keep simple even if it's just like a PayPal link or a button that you create on your website with, you know, stripe or something, and charge their credit card, you could charge them separately. And then when your product, your service, your whatever is ready to be delivered, you can figure out how to deliver to the people that paid via receipts. You know, you look at the receipts, look at their email. Okay, this person paid for this pre order. Let's give them access. Keep it super simple. If you're on the webinar and you get interest, and I like to say at least 5% buy, so that means if you have 100 people on the webinar, if you have five buyers, then you have some traction. Okay? Any more than that, it's incredible. You have 10, 15. This means you struck a really good chord. Okay, so now you got buyers, now you can build. Now you build out the product. What you do is you keep those customers, those founding customers in the loop. As you're building, as you're progressing, as you're getting closer to delivery date, you should have some estimate of how long it should take. You should say something like four to six months. Give yourself a range. That's something that you'll have to talk to your team about to find out how long it's going to take. If you're building it yourself, you need to give yourself enough allowance for snags and issues that you may come across. But the point here is that you're having them join you on the journey, okay? They're coming along and they're learning. You know, this is the stage we're at. This is what we've built so far. We're getting closer. You share a screenshot here, screenshot there, and you can do this in a Facebook group. You can do it on email. The point here is that you're just keeping these founder members excited. Another thing is you can just say, hey, money back guarantee. If after 60 days, when I give you this product in your hands, you're not happy, you can get a refund. The point here is that we want people to put up money and validate the idea. If they do that, we have validation and now we go ahead and reroll and we actually create the product or service. Now, say, for example, you run the webinar, you don't get enough sales. Let's say you get two sales out of 100 people that are on the webinar. You don't think this is actually a valid product. And this is not enough of a pain point. No problem, no harm, no Foul. You can refund these people and say, hey, we're not going ahead with this project. Not enough interest. But I'll keep you posted on the next thing we release, okay?

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To wrap up today's lesson, you need, you need, you need to validate the idea in the real world with real customers, with real money, okay? Otherwise you don't have a viable business or product at the end of the day. A product, a business is when people are willing to give up money for some value in exchange. If you don't present enough value, they're just not going to give up enough money. And that means stop, go back to the drawing board, retool, pivot, figure out what they're willing to buy. This is going to save you so many headaches and time and effort and money because you're not building, then launching and then finding out you're. You're finding out and then building and launching. Thanks so much for listening to the $100 MBA show. If you love what you hear, hit that subscribe button and you'll never miss an episode. Also, by hitting subscribe, you get access to over 1700 business lessons in our archives. Go ahead and do that right now. Before I go, I want to leave you with this. Some of us are very anxious to see our idea come to reality and into the world that we never validate. We have to understand that this is a business, okay? If you're building this as a hobby and a project just for yourself and you're willing to swallow the costs, that's a different story. But if you're actually trying to make money with this product and you're trying to build a business around it, if you're trying to get real customers, then validation comes first, then building, okay? You know it's going to be a good reward when you know people are dying for this product, when you have that product market fit, you're like, yes, give me this. I love it. Everything else is so much easier because you know exactly what to build, how to build it and you know who to sell it to. Thanks so much for listening and I'll check you in tomorrow's episode Q and A Wednesday. I'll see you then. Take care.

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