How to Waste Three Years and Thousands of Dollars

So there’s this guy named Fred. Fred is an entrepreneur and a long time DJ. He’s superb on the microphone and on the turntables. Fred the DJ is sick and tired of carrying all 500 of his records to each gig he performs at. He has 10 crates full of vinyl, each weighing about 40 lbs. Being the idea man that he is, he comes up with a great solution for his problem, and wants to sell it on the market.

His solution is a stand up “coffin case” for vinyl records. It’s a durable cabinet-like case with dolly-like wheels that can easily carry over 500 records in one pass.

Overall, he spends about $4000 to finally build his prototype, ship it overseas to a manufacturer, and finally have it come back as a final product after two revisions. The factory price for each record case works out to be $160 dollars.

Fred the DJ also wants to get his case patented. He spends money on attorney fees and get’s the provisional patent application prepared for about $3,500. The government filing fee is about $500. This is all fairly inexpensive, so Fred is happy. He can begin to sell his product with the “patent pending.”

He orders a shipment of 50 cases, which he will sell for $320.00 each (double the factory price). Overall, he’s spent about 2 years on his project, and $16,000 – all before his product launch.

Fred’s Product Launch

Fred hosts his own party to promote his new movable record storage case product. He spends money to rent out a club and invite over 200 of his friends, most of which are DJs too.

He’s excited for his product launch, and knows that he only needs to sell 50 cases to break even for all of the work he’s done. So how many did Fred sell his first night?

Absolutely none.

Fred is a little surprised, but not phased. “It’s just a new idea that will catch on later,” he says to himself.

He starts a website for his product, buys Google Adwords advertising to target market online, and after a whole year or promoting his product, he has only been able to sell 12 cases total.

Fred failed.

Why Didn’t Fred’s Product Sell?

Fred had a great product, but it totally failed. Why?

There are a couple of main reasons:

1. There is a new wave of DJ technology that is being used these days that totally eliminates the need for records and vinyl. Over half of DJs are now using this technology and software to actually map a chosen .mp3 file onto a programmable vinyl. It’s really amazing technolgy, but it’s still fairly new. These people would have no need for a 500 record case like Fred’s.
2. As a DJ, a lot of people like having multiple crates of records. It’s kind of a way of “showing off” how much vinyl a person has collected over their career. A storage case would only cover this up, and a lot of DJs would rather lug around heavy crates than buy Fred’s case, even though it would save them time and effort.

How Could This Have Been Avoided?

That’s simple. Fred could have just asked his DJ friends! He could have saved three years of his life and thousands of dollars if he just asked if his product was something people wanted!

Like many of us, Fred was so stoked about his idea and how great it was to him, that he didn’t even think about how it would be for others.

Make sure there’s water in the pool before you dive in.

It’s REALLY easy for us to assume our ideas and products will succeed. There’s no way to know for sure until you conduct research, or blindly jump into a pool. This goes for offline products such as Fred’s product, and online products such as blogs and eBooks.

Smart companies spend MILLIONS of dollars on research through statistics, focus groups, hiring experts, etc. You can do your own for free by just asking.

An Even Better Approach

How about this idea? Instead of getting an idea and testing to see if it works before you begin spending money and time on it, why not find out exactly what people are looking for first, and then design your product around that to give them what they want?

In Fred’s situation, if he asked his friends what they needed and he could have gotten any answer that could lead to a product that he could create. These are come potential responses:

• “Dude, my needles keep breaking. I need something to keep this from happening” – Boom! Instant product.
• “Dude, I use this new really cool technology that allows me to get rid of my vinyl all together and just use my mp3s. The problem is it takes forever to write the tags and descriptions for each of my song files. I wish there was a way to easily do this, or even have it done automatically for me.” – Bam! Instant product (and confirmation that a record case may not be such a good idea).
• “Dude, I’m still a beginner, I’m not even sure where to start” – Booyah! Instant informational product.

Of course, further research will be done to see if these potential products would be used by many.

How Am I Applying This Approach?

As you may or may not know already, I have an eBook on my other blog that I sell for most of my passive income. Being that podcasting and audiobooks are becoming more and more popular these days, I decided to hold a poll to see if those who bought my eBook would also listen to an audio version.

The poll simply shows up on the “Thank you page” after purchasing my book. Here are the results:

Sweet – Instant Product, with almost guaranteed returns.

Now, how do I go about making an audio version? I guess I’ll just ask around.

If you own a Wordpress blog, here is a link to the WP-Polls Wordpress poll plugin.