by: AskPat 499 Episode Transcript
Pat Flynn: What up everybody, Pat Flynn here, and welcome to Episode 499! One more episode to 500. I can't believe we are half way through a thousand episodes; this is crazy and I wanna thank you again so much for all your support.
All right, here's today's question from David.
David: Hi Pat, I have a question for you today about Kickstarter. My name's David and I'm a surgeon house officer living in Philadelphia and I'm in the process of trying to raise some funding/validate/pre-sell a product that I'm starting to launch. I've been thinking about a couple different ways to do this and then it occurred to me that I have enough friends and family and supporters, that a Kickstarter campaign might be a great way to raise the initial funds.
My question for you is this, do you feel that using something like Kickstarter is a bad idea? Because it could potentially skew the data that I get back. In other words, would it be a concern that I could get funded from Kickstarter, go ahead and move forward, and then find out there's not enough interest in the market? Really curious to see what your thoughts are about this and thank you so much for everything that you do. You are a true inspiration to all of us. Thanks again, Bye.
Pat Flynn: Hey David, what's up. Thank you so much for the question today. This is a fantastic question actually, this is on the top of my mind, too because I just finished writing my manuscript for my book currently as I record this, it's with the editor, it's going to come back very soon, going to go through one more round of edits and going to send it off. It'll be going live and everybody will be able to get access to it the last week of January for pre-orders or February 1st when it comes out, hopefully if everything goes well. If you wanna check that out, it's at WillItFlyBook.com and it's actually about how to test your new business ideas, so you don't waste your time and money—and this is perfect, so thank you David for setting this up for me and I apologize, I have to plug it … I mean my book's coming out, I've worked over a year on it, so, I gotta plug it when I can. But, David let's answer your question.
Kickstarter, I actually think it's a great idea. I think it's a great idea for businesses to validate, but I don't think it's the first step. The first step is to understand whether your idea is actually going to work for your target market. And if you start with Kickstarter, and yes, you're right if your friends and family support it, it doesn't give you true validation. It doesn't help you understand whether or not that business idea is going to work.
However, I do like Kickstarter because a) you're going to get funds for your project, of course b) because this is a marketplace, you're going to get a lot of new eyes on your business, too. What I would do if I was working Kickstarter to try and actually validate, like a lot of other people do, is set a benchmark pledge goal that is higher than the amount that you know that your friends and family are going to support you for. You obviously want to give your friends and family the opportunity to support you, if they want to support what you're doing and actually help fund your project so you can actually go out and do it. But, if you just set a hundred percent of whatever it is that they're going to help you out with, well, then yeah, you're absolutely right. How do you know if it's actually going to work with your target market? That's where I would start.
There's a lot of research that goes into an idea, I feel, before it even gets into Kickstarter. It's market research, it's going out there and actually talking to that target audience, understanding what their problems are, talking about and learning what the language they use, and all those sorts of things. Actually, the first thing I would do is actually talk about this with other people. I know a lot of people reserve sharing these ideas until it's launch date or until it's Kickstarter release date, but I think you do yourself a huge disservice by doing they because you need to talk about this with other people.
As John Saddington, who was a guest on the podcast a long time ago said, he's built multiple and has sold several businesses for millions of dollars. He says that when he gets an idea, the first thing he does is talk about it with as many people as possible. Not even friends and family because, again you'll get skewed data, they're going to want to be as nice to you as possible and because of that, they're not going to tell you what you need to know. He, John, talks to strangers about his idea, whether they are in his target audience or not 'cause he just wants to hear what other people have to say about it, whether there's a hole in it, or it just doesn't make sense. He can refine that product from there, he can refine his pitch from there, and then you can do something like, once it's validated and go into Kickstarter and actually through those conversations and through that market research that you do, which I'll talk about in just a second, you're going to actually come up with a whole different product or it actually might turn out to be something completely different, which is actually what you wanted to happen.
A lot of people save their ideas until launch date and then they see that nobody buys it and then they're wondering why and if you have your friends and family support you, but then you put it out there in the market for real, then it doesn't work, then you're like, “Wow, that sucked,” and you don't want that to happen. I think it's very smart that you are coming up with this question and thinking about this before hand and I would actually work before you get to Kickstarter to actually try and pre-sell these things to your target audience and this is what the whole book is about. There is a whole number of things you can do before hand to make sure that your business is actually one that's going to work.
The first thing that is that you do is the market research. I talk about this in a previous episode, you talk about your three P's, which are the: places where your people are at, the target market; where the people, that's the second P, the people that are serving that target audience already; and then also the products that are already out there. From there, you can get a bird's eye perspective on where you might fit or where this product that you have actually fits into this marketplace and also what holes are there that you can fill in or the language that you can use to better serve that audience, than those people who are out there already serving that audience aren't doing.
Then, it goes into creating, what I like to call, your customer plan. This is understanding more about your customer audience and a lot of people talk about your customer avatar, right, and understanding who that is. I think it's really important, this is a big key part of the book and it's just, I don't really like the idea of the customer avatar, this made up person that is your idealistic customer because it's made up and you can't feel for somebody that you make up and that's the whole big problem with this. I know a lot of people share that and it is a good exercise and it helps you think about who you're talking to, but I like to find real people out there who are having those struggles that you are then providing a solution for.
This customer plan. P-L-A-N is an acronym for what I talk about in the book, this is discovering the problems of your target audience and I go over a number of strategies to do that through searching through forums, through conversations with others and things like that, surveys. Then, the L part in PLAN is understanding their language and then the A, is actually anecdotes or finding actual stories of people who could either use, or who have found a solution similar that you can connect with and actually feel what they're feeling. Then, N is actually your hypothesis based off of the problems, the language and the anecdotes, which is your need. What is that need that you're providing to them. That's the hypothesis and that's what you then go out and validate and test.
Then, in terms of testing, there's a lot of different things you can do, starts with getting in front of an audience and actually just getting access to an audience and if you don't have an audience already, it doesn't mean that you're done, you go and find an audience. That's why having that list of … that second P I talked about, the people, is really important 'cause those are people that you can build relationships with who can potentially guess post on, or become a guest on their podcast to share some expertise and then actually from there, be able to put this product that be in front of your target audience and from there you start to interact with them, you start to gauge whether or not this is something they're interested in. If it is, then you actually pitch them that idea and ask for a transaction. Again, I talk about this in a lot more detail in the book, step-by-step, there's several people, several case studies I share in the book who've gone thorough this exact same process across all different niche's to validate their product and actually get paid for it before hand.
Once you get that, then I feel like going into Kickstarter, you're going to be much more confident, you're going to get that support from your friends and family, which is perfect, but you also know that you're going to have that confidence behind the pre-validation stuff that you did already to make sure that when other people see it, too, they're going to want to grab onto it, and it's not just your family and friends, but everybody else, too. Plus, once you get into that marketplace, things start to take off, you might get chosen as a staff pick or in that particular space this might be a product that goes viral, it might go viral on Reddit, which I've seen before, too and on social media, so David, I hope this gives you some information. It's scratching the surface on validation and that's why I wanted to write this book 'cause a lot of people just scratch the surface.
Tim Ferriss talked about it in his book, The 4-Hour Workweek, in a section called, “Testing the Muse,” and he just scratched the surface with some Google adword strategies to see whether or not product he was potentially going to sell, was going to sell. That's why I wanted to take this to the next level and that's why WillItFlyBook.com is a place everybody should go, and hopefully this just gives you some ideas and helps gets those gears spinning, David, in terms of what it is you can do before you actually start that Kickstarter campaign because, again, I feel like Kickstarter is great, but there are some things you can do before hand to make sure that you're time on Kickstarter, which does take a lot of time and resources, plus, especially with all the pledge stuff and those goodies that you have to give out and ship out, once people pledge, it's a lot of work. You want to make sure that work is time well spent, too.
David we're going to send you an AskPat T-shirt for having your question featured here on the show, again, thank you so much for chiming in and asking this question, I know a lot of people are interested in Kickstarter and we'll send you that T-shirt very soon, you'll hear from my assistant in the next couple weeks.
For those of you who have a question that you'd like potentially featured here on the show, just head on over to AskPat.com you can ask right there on that page.
Thanks again so much, I appreciate your time and I look forward to serving you in the next episode, which is episode 500 of AskPat, how awesome is that? Thank you so much for all of your support.
Here is a quote to finish off the day by Roy L. Smith, he said, “The successful man is the one who finds out what is the matter with his business before his competitors do.”
Take care, cheers, I'll see you in the next episode 500 of AskPat. Bye.