“While most startups who set up pages on Kickstarter, Indiegogo or a host of other crowdfunding sites are looking to hit a specific goal and then get started making their project a reality, a new crop of businesses are using the platform as a wholly different business model: selling their product before it exists.”- Harvard Business Review
In this post, we'll cover several topics.
Now you’ve identified your target customers and have them at the heart of everything you do, let’s look at how you might further increase your confidence that your product idea is attractive to your target market and that you’re “on to something” good! As we’ve discussed, you’ll want to reduce the risk of wasting time and money in creating a product that the market does not really want or need.
How do you find out whether your product idea is a “no”, a “maybe”, or a resounding “yes!”?
There are many smart businesses and business people that do not advocate spending a penny on product development until they are confident that:
But how do they measure genuine interest?
If you progress on to reading Don’t Hire a Software Developer Until You Read this Book, we’ll be creating and testing prototypes in chapters 9 and 10 and talking about running user tests and customer interviews as methods to help you assess interest in your product idea. These activities can also help you identify target customers who will pay for your product in advance. This is called getting product presales or pre-orders.
Which of these 5 stages would you like to be at and which one would make you feel most secure about spending your money (or other people’s money) in order to pursue your goals? Every one of these stages may need to be revisited and fine-tuned many times, but isn’t it useful to know what you’re aiming for?
What are presales?
Presales are sales of services or goods before their release date which allow the owner of the product to assess the market’s willingness to buy the product. This is done in order to minimise the investment risk in creating the product - as we’ve discussed it’s risky to create a product until we know more about how well it might be received. Presales can also be used to fund the creation of the product in full or to contribute towards development costs. Do you think that the odds of success would be in your favour if you were able to achieve this?
Stick with me – I’m going to provide a number of examples of companies and industries that you know, who use the presales method all the time.
There are also a number of online shopping sites which allow traders to put their products up for pre-order and crowdfunding sites use this model too.
There is nothing “scammy” or dishonest about presales as long as you:
If you’d like to investigate pre-selling in more detail, here are some ideas:
Other finance options
As an alternative to traditional bank loans, there are a number of organisations that may be able to help you obtain finance for your business. Take a look at these option(s):
For government funded loans: https://www.startuploans.co.uk/
Angel Investors and venture capitalists:
Peer to peer (P2P) lenders are an alternative to going to a bank for a loan. The larger players in the market include:
Equity crowdfunding allows startups and growing businesses to find investors and raise funds. In return, investors receive shares in the company.
For an overview of the options available, The Business Finance Guide offers a comprehensive table of lending options for businesses at all stages of growth, with further information and videos available for you to explore each option: http://thebusinessfinanceguide.co.uk/finance-options/.
Always check the small print before making any commitments!
The next best thing after having presales under your belt, is to set up a Coming Soon landing page.
This isn't as good as having pre-orders because you won't have generated "hard cash", so to speak, but if you can get a large number of people to sign up to your Coming Soon website or landing page this can give both you, or any potential investors evidence of the level of interest in what you are offering.
A landing page is a one-page website designed to convert people to take a desired action (in this case, people will be providing their email address as the desired action, in order to be among the first to know when your product or service is about to go live.)
You will need to set up the page, create some compelling copy outlining what you will be offering and how it will benefit your target market to excite and inspire them to want to know when what you'll be offering will be ready for them to use.
A percentage of people who sign up will be your very first customers if you are able to sell your concept and its benefits, and you are able to create a build up to launch which prepares those people to buy when the time is right!
Wix, Weebly, ConvertKit, LeadPages, and Carrd are just a few of the no-code / low-code website and landing page builder tools that you can use to create one.
You can find an article on the core elements of a successful landing page on ConvertKit's website.
Take a look at the Wix template below - this example is for a bricks and mortar service, but you can choose an alternative template, or edit one like this and include a mockup of your website and app, along with some key product benefits.
You can see the blue button to the top right, which will allow you to copy and then edit this template with your own brand fonts, colours, relevant images, and marketing copy.
I chose this example because the Are You Ready? message is quite eye-catching - however an even better structure for the page would also have your number 1 Unique Selling Point front and centre, along with your brand tagline, and the classic Coming Soon message (as an alternative to the Are You Ready? text) big and bold so it is unmissable when people visit your landing page.
Make sure that what you are offering, and its usefulness is crystal clear to your target market in order to maximise the effectiveness of your landing page and once you have your landing page up you will need to drive traffic to it via social media marketing, ads, or other marketing tactics.
As always, check the small print before making any commitments!
Originally published as a free resource offered with Don't Hire a Software Developer Until You Read this Book and adapted for the Purposeful Products blog and published on the Purposeful Group website.
Copyright. Purposeful Publishing, K.N. Kukoyi, All Rights Reserved.
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