How To Flip Business On Its Head
Membership sites have become a bit of a trend among digital marketers and entrepreneurs. Everyone seems to have their own community now, or at least has an idea for one. This is all well and good, but how do you know your idea isn’t just a load of rubbish?
This was the position I found myself in when I was contemplating taking the plunge and starting up my own membership site. Fortunately, I had recently trained in Lean Startup methodology which teaches entrepreneurs how to minimize risk and maximize cash when starting up something new.
Too many people just assume their amazing idea is going to be so profitable that it’s worth dumping boatloads of money into. Well, I certainly didn’t have any spare boatloads of money when I started but I knew how to validate our concept and test its potential as a business.
The basic premise of the Lean Startup methodology is to not spend money or even create a product until you’ve validated that the idea is something your market will pay for. It’s really the opposite of how most entrepreneurs go about it.
Validating and Testing Ideas Made EasyWhen validating an idea I have one goal in mind, to find enough customers willing to pay you for some version of your product.
Since our product was a membership site for WordPress consultants and freelance developers it made sense to do a paid webinar. We then put out an email to our list with our offer and made sure the webinar topic would address some of their specific challenges.
We had been previously marketing a plugin product so we had a deep connection to the market and were able to get out our offer to a sizeable list of prospects.
The theory was that our audience would pay for business coaching online from us because we had earned their trust over time.
My target number was 30 people on the paid webinar. 30 just felt right for me, every market operates on different metrics so you need to have an idea of what will make sense for you.
Hacking The Go-To-Market StrategyI realized how much more you actually learn by trying to sell a product than you learn building the product in a silo. When you create a structure that requires payment you get to hear all the objections, all the pain points, and see how you stack up to your competition.
Then you can go back and iterate.
You can change what’s not working, and adapt your business to better fit your market. The best part is that you can do all this without spending precious capital or scrapping a product you’ve invested time in developing.
This gives you a competitive edge and can help you become one of Seth Godin’s “Purple Cow” businesses. (Being remarkable in your category!)
Exactly How We Did It
We set up an event in Eventbrite and we used Go-To-Webinar as our platform to host on. We then put out the offer to our list that we had created the event and were selling tickets for $197.
We also gave out an early-bird offer for 50 tickets at $97 a piece. Now I knew that if 10 people bought tickets I’d have to put on the webinar for them but I likely wouldn’t have moved forward with the business.
If only 5 people bought in, I’d simply refund them and pretend the offer was a blooper. But if I hit my target number of 30 people then I’d put on the webinar and will have validated the underlying concept of the business.
Long story short, we knocked it out of the park in terms of ticket sales. Our new venture was already generating revenue for our business. Here’s the thing though, it’s important to note that up until that point I had not done a single bit of product creation past the copy on the sales page. This is what I mean when I say profits from day one.
Not a single webinar slide was created, I wasn’t even 100% sure what I was going to teach. All I knew was that it was going to be EPIC and that my audience would be raving about the value.
Now, I only went down that route because we passed our validation test, minimal legwork, huge potential. That’s the magic of running lean.
- Send an email to your list with an offer for a paid webinar on a topic you have expertise in and relates to your membership community idea.
- Set a target metric for how many attendees you’ll need to validate the idea as marketable.
- Use Eventbrite and Go-To-Webinar to run the event.
- Cancel the event if you don’t come close to you metric, re-evaluate your idea.
- If you are halfway to your metric fulfill on the Webinar but re-evaluate your idea afterwards.
- If you hit your metric or beyond, your idea is validated by the market, move forward with your membership site.
Result You Will Achieve
A process to validate your membership community without spending capital or developing a product.
This article is based on an EHQ interview with the mentor.