A few months ago, I asked a group of aspiring entrepreneurs,
I then randomly selected a sample from the group for a quick follow up interview. In the call, I asked them to elaborate on the top reason that’s stopping them from executing on their ideas.
Those who chose Knowledge in the survey, said things along the lines of:
-I don’t know what to do yet.
-I don’t have a roadmap.
-Although I spend my free time reading everything I can get my hands on about entrepreneurship from case studies to books, videos and articles, at the moment, I still believe that business uncertainty is way higher than sticking with my existing career.
Those who chose Funding, said things along the lines of:
-I’m willing to put in a hundred hours a week as long as I have the funds to support myself and my family without having to worry about the money. That’s why I need funding.
-I can’t maintain the business with my current budget.
-I do have some savings but if I quit my job, I’m not sure I’ll be able to have it back.
In this post, I am going to share 5 steps that don’t require any expertise, funding or countless hours to complete. Those are the steps that will help you build startup value without a product and with as little 5 hours a week and $100 or less.
Whether you are building a hardware or software product and whether you are funded, bootstrapped, expert or neither, those are the steps that you will have to take to
- Build a fundable startup.
- Build a promising product.
- Minimize uncertainty.
- Maximize output with the resources you have.
The steps I am sharing below assume that you are starting from just an idea but this doesn’t mean that you cannot go back to the initial steps even if you have already made some progress. It’s a checklist so make sure you cross each one off the list as you go.
1. Idea = Guess = Uncertainty
The first step is your first opportunity to minimize uncertainty and build value.
The first two things in your to-do checklist are:
1.1 Meet with potential customers
Before you do anything, with just an idea in mind and for the first 10 days, spend an hour each day in meeting 2-4 potential users/buyers.
Start with people you know and the people they know and then reach out to others and ask for 5 minutes for a quick interview.
Alex Osterwalder and Steve Blank combined their research and experience to create a framework that entrepreneurs can use to remove a lot of the uncertainties from startup development. The business model canvas essentially entails making all the wrong guesses on a piece of paper before getting into the expensive work of building and marketing a product and most likely learning that the customer was expecting or needing something different.
The canvas has many sections but don’t worry about those for now, all what you have to nail at this stage are these two fields:
The first time you fill these two fields, you are going to guess to the best of your knowledge. The more people you meet with, the clearer the picture will become and best of all, you will get your answers from the buyers which is the only way to minimize uncertainty and guess right.
In the initial phase of customer interviews, you are looking for a consensus. You want to write in one to two sentences what most people claim as a problem that needs a solution (value proposition) and who out of the different people you met with need the solution the most. By a consensus, use 70% and above as a benchmark. In other words, if 70% or more say problem X is the one and if 70% or more say it’s for me (exp. a father in a family of 3 with an annual income of $70,000 and with a background in marketing, etc. The more specific, the better), you are onto something.
Out of those you met with, reach out to a sample, say 10 people, and ask if they’d be interested in joining your customer advisory board (CAB). Those are your biggest fans and will go above and beyond to help you build the right product. In exchange, you can offer them free/discounted product(s), take them out for lunch and help them with their own endeavors.
1.2 Reach out to mentors
The second mandatory stage within the first step is to get a mentor or two onboard. You need the guidance of someone who’s been in your shoes not only to make sure you’re doing the right things but also to know what you should do in the first place.
There are many ways you could attract mentors. Here are two:
1. Put your top list of mentors and invest some time in building a relationship with them. This entails starting by showing your interest in their work by adding them on social media, sharing and commenting on their work, helping them reach their own goals. Essentially, anything that will get you noticed. When they know who you are, email them to introduce yourself and when you find appropriate, ask them if they’d be interested in guiding you.
To use an example, here are the steps I took to reach Hiten Shah.
- Followed him on Twitter.
- Retweeted a few of his tweets.
- Opted in for his new startup’s beta list and made myself available to provide feedback on the product.
- Downloaded and read his e-book.
- Wrote a guide and used his startup as a case study.
- Reached out over email and introduced myself.
Those steps all together took about 3 weeks. After all, even if we do everything in one day, it wouldn’t matter since we’re looking to build a relationship not sell a client so time is important.
2. Join their program(s) or buy their product(s). You’ll find that many of the people you need help from have some sort of program, bootcamp or course that gives you direct access to them. I find this to be the best way to get mentors’ active involvement since not only are they entitled to help you but also, they’re committed to improving their own products and want to learn from your experience. Much like you did in step 1.
To use an example, after meeting with Dmitry Dragilev over the summer, I learned about his PR program and decided to enroll. In addition to the valuable lessons I learned from his content, he’s been actively available to help me any time I call.
Here is a list of programs/courses you can join:
Public Relations (PR)
by Dmitry Dragilev
Description: PR is very costly. Startups invest tens of thousands of dollars to get their products featured and publicized. Dmitry shows you exactly what PR firms do to get the job done so you can do it yourself. What he’ll show you are strategies to build relationships with key influencers, how to get featured, how to become a contributor, and more based on your needs and that’s what makes this unique.
Once you go through the presentations, you’ll start strategizing with him directly and get to work with set goals and how to achieve those goals.
Link: PR That Converts
Online Marketing (general)
by Neil Patel
Description: Neil’s multi-million dollar businesses were founded on content and grown tactically. In his program, he talks about everything online marketing from SEO to content, conversion, analyses, psychology, and more.
The program page is down right now. To get informed when it goes live, join his list:
Building a Side Hustle
by Ryan Robinson
Description: Unlike the persona of the typical entrepreneur that we often see in the media that depicts a college student with extraordinary abilities, in reality, most founders are not college students. Most startup founders either start on the side while having jobs or by quitting their jobs, using their savings and investing in their ventures.
Ryan shows you how to start a side hustle whether you’re in college or at work. Through his program, he sits with you to learn about your passion, define your product, set your goals and achieve them.
Link: The Launch Formula
by Pat Flynn
Description: Pat makes close to $50,000 a month just from affiliate marketing. If you want to become a super affiliate, he is the guy to follow. Unlike others who build their web presence for the sole purpose of promoting others’ products, Pat found the perfect balance.
Self-funding (Bootstrapping) a Startup
by Abdo Riani
Description: My journey started as a student with $50 per month in discretionary income which quickly turned into a 6 figure business. Over the years. I created several startup products and was involed in turning many ideas into profitable ventures. Every single one of my ventures is self-funded.
In the program, I work with entrepreneurs hand in hand and provide a blueprint in each startup “department” to meet set goals without referring to outside capital and until you build a fundable startup. More specifically, entrepreneurs master the step by step to self-funding product development, marketing, team building, PR, list building, customer acquisition, and growth.
The program not only helps startup founders but also those who are looking to start a side hustle (startup or small business), mentor others in a program like this, or start and grow a consulting company.
by Ali Mese
Description: Ali helped many startups grow by leveraging the power of content marketing.
Neil will show you everything you need to know about online marketing, Ali will help you master content marketing.
Launching An Online Business
by Ramit Sethi
Description: You may have come across Ramit somewhere online. He started his career as an online reference for personal finance tips and advice. Today, he provides resources (courses and programs) in different business areas from starting an online business to negotiating salaries, building relationships, living a better life, landing a dream job and more.
One of his signature courses is Zero To Launch. In it, he shows you exactly what you need to do to start a successful online business even if you don’t have an idea.
Link: Zero To Launch
So, how is interacting with customers and building a list of mentors going to increase startup value?
In many ways. First, no one (investors) will fund an experiment (testing a guess) and by taking the time to interact with potential customers, you’ve shown that you have invested to learn about customers’ needs and expectations and therefore, chances are you will build products people will buy.
Second, by building a list of mentors, you are also building trust and recognition in your own personal brand as an entrepreneur. And because investors invest in people, you are more likely to get funded, build partnerships and find high paying customers if you are backed by successful and well connected mentors.
These two will build significant value into your venture even without a product or a single paying customer.
I created a checklist with all the steps plus an extra one that’s extremely important. You can download the checklist below.
2. Build traction
Still without a product but with a much clearer idea of the problem that you need to solve and for whom, the next step is to build traction and build a list of potential customers.
For this, follow these three steps:
2.1 Help others improve their products
For instance, in Product Hunt, when you upvote the ones you like
And when you provide useful feedback,
people are much more likely to help you later.
Spend an hour a day contributing to others’ ventures through Slack and Facebook communities, Reddit, Product Hunt and anywhere you can find people that can help you improve and promote your own venture. They don’t necessarily have to be potential users, they can also be mentors and fellow entrepreneurs. This is going to be key for the next step.
2.2 Create a Ship landing page
It will look something like this.
Find more examples here.
How are the previous steps going to help you build startup value?
When you build a network, introduce an upcoming product, and get people excited and sign up to learn more about it and wait for its launch, you’ve already proven that the problem you’re solving is worth investing in.
This will lead to a higher exposure when the product is launched and it receiving high upvotes. Product Hunt is becoming a reference for investors AND mentors and customers for finding the best products to back and use.
2.3 Build your online identity
Create a website that’ll consist of a landing page and a blog. You can have one up and running in a day or two.
Go to Themeforst. Browse themes and find the one that you like and that’s relevant to your industry, can resonate with your customers and best conveys your value proposition. Here is an example I picked up with a quick search.
I also find Elegant themes excellent and easy to customize. Don’t hesitate to check their themes too.
To clean the theme and customize it a bit, if you’re not familiar with WordPress, find help from a friend or hire someone through Fiverr for as little as $5. Make sure you type: WordPress theme customization in the search bar.
Just for installing the theme without any major changes, you can even get it for free from the maker(s) of theme in Themeforest. Make sure you ask. The theme itself should not cost you more than $50.
If you don’t have a logo, use Logojoy.
For as little as $20, you can have a logo for your website.
You will also need hosting. For now, I think the most basic hosting plan- Shared hosting (Basic) is enough. In Bluehost, it also comes with a domain.
I called them again last week. This time, I told them if they give me the first buyer price, I would pre-pay for 3 years. This time, they agreed. By doing so, I am saving close to $2,000 over the 3 years period. That’s a lot of money.
So, what I highly recommend you do is pre-pay for at least 3 months of hosting, preferably 6. This will be the period where you’ll be doing the remaining steps below plus building the product. By committing for 3-6 months, you will save at least third the amount and when you’re ready to upgrade to a more advanced plan, follow the same idea.
2.4 Collect emails
If you’re not inviting people who are interested in what you’re doing with as little as an email sign up, it’s as if you almost don’t have a coming soon page. Notice the landing page by Ship (Product Hunt) above. What’s the only field it has? Email.
You need potential users/buyers’ emails to keep them posted with your progress, to learn about their expectations, seek their feedback, recommendations, and obviously to sell them the product.
Mailchimp is a good email marketing automation service. It’s free for the first 2000 subscribers and easy to install. For more flexibility and in the case you want to create a funnel for each subscriber that takes them from a welcome email to pre-sales and farther, use ConvertKit. You can also use Sumo as another way to capture visitors’ emails.
2.5 Submit to BetaList
Once your page is ready, head over to BetaList to submit your startup.
BetaList gets thousands of startup enthusiasts on a daily basis and chances are you will get a few more leads. Furthermore, this is a great way to build some more awareness for your upcoming product and potentially to grab the attention of the media.
2.6 Create 10X content
Whether your startup is a hardware or software based, in fact, whether you’re building a small business or a startup, nothing better will bring customers to you than good content. By content, I don’t specifically refer to blog posts. For instance, if you’re starting a restaurant, and once again before even having a location, menu or anything, wouldn’t people be excited to see photos of your meals (cooked at home), ideas for new recipes, tips, recommendations, etc.? That’s also a form of content that can be over Instagram or other social media outlets. Not necessarily blog posts.
In any case, at the end of the day, the goal is to build some authority in the market place, create awareness and consequently build value. The best way to accomplish these goals is by providing actionable content and advice to your audience.
Neil Patel, the team at Buffer and many other startups built a massive list of potential users just by writing quality content frequently. When their product was live, they didn’t need to find users because buyers were early waiting for what they were working on.
Here’s what to do:
1- Learn the Skyscraper technique. Essentially, it’s about writing a piece of content that’s exceptionally better than existing ones.
2- Contact those who are in your list so far. Send a survey out asking about their biggest challenges at the moment. Use their answers to define 3-5 topics to write about.
3- Write the posts and include as many expert advice as possible. You can also contact a list of experts and ask for their answer to a specific question.
Here’s an example.
Soon, Ryan Robinson will publish a post I wrote for his blog: How Much Does It Cost to Start a Side Hustle? 15 Ways to Fund It.
What I did was contact some experts saying
Now, when I get their answer like here
When the post is live, I will go back to them and ask if they’d be willing to share it with their audience. Chances are they will which means bigger exposure, awareness and a shot at building a relationship with leaders in the industry.
I followed the same approach with this post: How to Bootstrap a SaaS Startup (Guide).
I contacted Hiten Shah and Sujan Patel among others. This led to them sharing the post with their followers which got over 2,000 readers that day only.
When it comes to writing 10X content, all you need is the right mindset. Write as if you are addressing a loved one who asked you to explain or teach something. When you think about it that way, you’d go above and beyond and will put the effort to create a post that makes a difference in your readers’ lives. Without any knowledge or expertise about content marketing, this mindset will help 10X your results.
All in all, keep in mind what the principle of reciprocity is all about. It states that people feel an obligation to give back once they receive something of value. When you highlight these experts’ products or them as leaders, when you share actionable content with your audience, they’re much more likely to help and buy from you later.
In sum, how are all the things we did at the Build Traction stage going to help you build pre-funding value without a product or service?
First, research findings by Elitzor and Gavious show that the mere fact that entrepreneurs take many steps to progress with their ventures with their available resources and the fact that they’ve taken the effort to reach out and pitch their ventures to investors is a signal of their uniqueness and qualification since any other entrepreneur could have done the same thing but instead may have chosen to wait for backers’ commitment. This in itself is value adding.
Second, your web presence, Ship, BetaList and conseqeuntly wait list signals interest in what you are building and many are likely to convert when the product is ready for use. Having such wait list build trust and signals potential of your upcoming product.
Third, your content and the relationships you build in the process signal authority and capability as an entrepreneur to build viable and profitable solutions.
All together will build and increase the value of your venture.
Robinhood had over 300,000 wait list subscribers before they even had a product. Dropbox had over 75,000 subscribers and the list continues. Although these two examples may be an outlier, hundreds of other startups had over 10,000 people waiting for their product before they had one.
It’s hard to argue that these startups are valued as much as others without a product or even with a multi-million dollar platform but zero users or wait list subscribers.
3. Build a pool of potential team members (or co-founder(s))
In an experiment conducted by Stanford and USC researchers Shai Bernstein and Arthur Korteweg to identify angel investors’ most important characteristics to identify the best startups, they find evidence that the average investor values the founding team and their background more than startups’ sales and user base (traction).
In another study by the venture capital firm First Round Capital, analyses show that the valuation of startups launched by repeat founders is about 50% higher than ventures started by first time entrepreneurs.
The evidence suggests that investors fund people not companies.
The truth is, most of us don’t have co-founders or team members. To find the right fit, you have to make yourself available. And you have many options:
- Join online communities.
- Attend Meetups and social events.
- Use LinkedIn and Twitter to find potential co-founders and start by introducing yourself and building a relationship before seeking their interest in working together.
- Ask for a referral or introduction from people you know AND don’t know. I never hesitated to contact a LinkedIn connection who’s in a network with a person I want to reach and asked for an introduction.
At this point, all you need is a pool of leads. Chances are, if you don’t know the people, rarely will they be sold on an idea for many reasons but mostly because they have ideas of their own too. However, when they know who you are, they are more likely to want to join you once you build traction and prove the potential of the idea.
In short, don’t expect anyone to join you now. This is the time (even earlier) to build relationships with potential co-founders.
4. Sell the product (even without one)
Cash is king. In business, regardless of how big or small, advanced or simple your solution is, there is always a buyer.
4.1 Make a sellable version of your upcoming product
No matter how complex your solution can be, there is always a way to offer it through non-scalable approaches. For instance, the investment app Wealthfront started by working with customers one on one in the early days before building their advanced investment platform. The initial traditional approach they took not only enabled them to generate revenue early on but also learn about customers’ needs and expectations.
Zappos’ founders took the same approach. Instead of and before building their e-commerce site, they launched a small blog that included the products they were selling and did everything else by hand. When someone orders, they would walk to a nearby store to buy the product and from there to a post office to ship the item.
Before you build the product, focus on finding ways to serve the customer by getting your hands dirty. Your mentor from step one will help you define and execute on your non-scalable approach.
My first startup rewarded users for recycling. Before building the web app, I connected recycling companies with people through email. All I needed was to get subscribers’ contact information and a print of their recycling receipt. In an excel sheet, I organized their points and when they’re ready to redeem them for an offer, they emailed me and I did it for them. This was all done through email and an excel file which otherwise would have cost me $20,000 to build a website for.
This approach is how you will be able to sell soon. In fact, as soon as you have an idea and meet with customers from step one to understand their needs. With that, you’re ready to sell. This approach will also help you earn more money soon that you can later reinvest in build a scalable version of your product.
This approach will help you make all the mistakes and wrong guesses soon. This way, when you’re ready to build, you will introduce a solution that’s much more likely to succeed.
And finally, this approach will help you build value into your startup. Once again, two startups one with just an idea and another also with an idea but few customers sold through a non-scalable approach are definitely not valued the same.
4.2 Sell your upcoming product
I remember walking from one person and company to the other with an iPad that included designs of the product, nothing more. With that, I was able to secure close to $500 in pre sales. A friend helped me design the key pages and I borrowed the iPad from another friend. That was enough to sell.
While sites like Kickstarter and Celery can help you pre-sell your product online, at this stage, forget all about technology and focuse on one on one selling. If you expect to put a page up with a buy now button and people will buy like crazy, that is almost never going to happen. I suspect that for every 10 customers you pre-sell, 9 will be because of you reaching out to them and selling them on the value proposition.
Once again, still without a product and definitely before quitting your job or making any sudden change in your life, you have the opportunity to builder startup value through pre-sales.
5. Build key partnerships
The final step in the pre-product value addition roadmap is to build partnerships with key people and companies that can help you strengthen your brand, increase awareness about your product, connect you with other key stakeholders, minimize the friction that comes from pre-selling products, and more.
Start by identifying the people you want to connect with. Organize the target list in groups as follow:
Experts and leaders that can help me get funded faster later:
Influencers that address my audience and can help me grow faster:
Companies I can partner with for joint ventures:
List of potential mentors that will help me grow strong
Three names in each category is probably a small number, however, at this stage, if you can start a conversation and build a relationship with at least 3 in each group, you have already built significant value in comparison to other early stage startups.
The 5 steps you read in this post are a no excuse roadmap for every entrepreneur to execute on their ideas and build pre-product pre-funding value regardless of their background, wherever they are in the world, and regardless of how big or limited their resources are.
Download the checklist of the steps and cross each one off as you move from one step to the other. Find an extra very important step inside.
Right now, in the comments section below, tell me of an experience you had that incorporated one of the strategies and steps above. Any other pre-product value adding steps that you can think of?