How To Pre-Sell Your Software Product Before Building It

– Hi there, Dan Martell here. Serial entrepreneur, investor
and creator of SaaS Academy. In this video I’m gonna share
with you how to pre-sell your product before you even build it
so that you don’t have to waste a bunch of time, energy and
money to find out that nobody wants to buy what you create and
be sure to stay to the end where I share with you access
on how to get my “Idea to Exit” mini-course where I go over a
ton of different topics from how to get your product built to how
to get customer validation to managing developers
in all different aspects of scaling a software business. (upbeat music) So I’ve been building software
companies for 20-plus years and I’ve learned so much
about how to go to market, get validation and
really test an idea. I remember when we were
building my company Flowtown, it was really tough to figure
out who our core customer was gonna be and this is after we
actually built some product, put it out there to find out
nobody wanted that solution. So we went back to the white
board and we designed a test. What we did is we said okay, here’s the minimum
product features, let’s go find 20 customers
to pay us $20. Okay? That was the criteria. Me and co-founder Ethan ran out, we were literally
in San Francisco. We run out into the street
and we start going to different friends’ offices ’cause pretty
much everybody works in a three mile radius. And we just showed them the
prototype which is essentially like a screenshot. It was just like a
printed off version. We said, “Does this make sense?” They were like, “That’s amazing.
When it’s gonna be ready?” Say, “Well, we love to
have you as an early adopter. “All it’s gonna take is $20. “That gets you a discount
on the future product cost. “Do you want to be involved?” And people started paying us. And that’s when we
realized we had some traction. Then we went to the next level
which we called a smoke test. Essentially a wizard of Oz. We built a fake version of the
interface that we mocked up and then we sent an email to a
couple hundred people and asked them to fill out, essentially
simulate the software. So Flowtown was a way
to get social media data on top of email addresses. So essentially they had to fill
in the emails into this form and then it would tell ’em what it
would cost to process to get that social media data
and they would enter in a credit card or
a PayPal payment. The funny part is is none of
that worked and all we wanted to know is what percentage of
people would convert to paid so that we could test it,
not only was there a demand. And this was after people
had already gave us $20 to validate that. We wanted to run a smoke test to
see if we could even get people to pay without us knowing them
and sitting there and convincing them ’cause sometimes
people call me “Sell Martell”. I get excited and I don’t do
true validation instead I’m trying to sell people on it. And that was really the
beginning of perfecting the true product development
that I’m gonna share with you in this video. Number one,
list of early adopters. Here’s the challenge with
most people that are trying to validate a product is they make
a list of companies that could be potential customers
but they never run ’em through the filter of early adopters. So if you ever heard of the
technology adoption curve, essentially there’s five
different phases of technology adoption and in the
early days you want to find the early adopters. These are the people that
wait in line for the iPhone, have the latest
gizmos and gears, use the latest
workflow software, collaboration software,
the latest apps on their iPhone. These are people that are
willing to deal with challenges to be at the bleeding edge. So if you are
trying to sell software, for example, to restaurants,
you want to figure out what qualifies a restaurant as
considering an early adopter. What is true about their
business that will tell you that they’re into
adopting technology early? Because if you went to laggards
or the late majority those are people that might give you a
false positive on it being a bad idea just because
they’re not early adopters. So for example
in the restaurant, first thing I would do is do
they have a Snapchat account on their marketing website? If they do,
they’re probably early adopters and they would make the list.
But you have to make that list. Build the hit list of early
adopters to eventually go and talk to to validate your idea. Number two, ask for advice. One of my
favorite quotes ever is, “Ask for advice, get money.”
Ask for advice, get anything. So whenever you’re trying to
reach out to a customer and you want to kind of
validate with them, don’t go in there and say, “I need to take your time,
duh-duh-duh-duh.” Just say, “I want to get
your advice on this idea “we’re building,” and
walk them through it and validate their pains,
validate the solution. Ask them questions about,
you know, if you could wave, it’s called the IPO question, if you wave a magic wand
and this problem was solved, how would that look? And that to me is probably
the most important part of just getting through the list of
early adopters that you’ve built to to get a
conversation started. People are always like, “What
do you say when you reach out?” I literally email and say,
“I’d love to get your advice on “a product we’re
thinking of building. “You’re incredible
at what you do and “I think it would be
really valuable. “Do you have seven minutes
to jump on a quick call?” That is the most important
step is just asking for advice. Don’t stress out too much. Get them on the phone,
get in person meetings and start having a conversation. Number three,
validate pain and solution. So in the book “Four Steps to
the Epiphany” from Steve Blank, I’m gonna link that up below, he
talks about getting pre-orders. And the whole idea about
validating pain and solution is not about changing
your solution every time you get a different pain. This is where most founders
screw up getting people to pre-buy their software
before they actually build it is because by the
end of this process, if you get 20 like I did, 20
early adopting customers paying you money and every time
you’ve talked to somebody you’ve changed the solution, then
you’re gonna have to build 20 varieties of your solution
to meet that demand is probably
gonna be overwhelming. You probably don’t have enough
pre-sales to fund the product development so
you’re not gonna do it. What you want to do is validate
their pain and solution based on one product set
and just focus on that. And until you find out that the
market doesn’t want that then you tweak it and go find another
10 people to validate it because if you keep changing your
product for every piece of feedback you got then yes, you
might get people interested in your product but they’re
actually not interested on what the core of it is. They’re interested because
you overcame their objections so don’t do that. Validate the pain and
your solution to that pain. Number four, MEVO. This is my favorite thing ever. I believe that MVP
is a dangerous word, minimum viable product. You might have heard this in
“The Lean Startup” and the reason why it’s
got the P in there and the P is
essentially a whole lot of work. If you think you need to build
something to do true validation, you’re absolutely wrong and I think Eric
would agree with this. You don’t have to build stuff. You have to
simulate the situation. What I do is I call it a MEVO,
minimum economical viable offer. It’s essentially something that is attractive enough for them
to buy. Something simple. It could be a one-pager. It could be a marketing
site with a sales page. It could be some screen shots
but essentially you want to design a MEVO. When Ethan, my co-founder,
and I went out and pre-sold Flowtown, we designed a MEVO. We went to the market, we did all these steps and
we got people to pre-buy it. So essentially the MEVO is what’s the minimum economical
viable offer that you could make and at the end of the
conversation, so the way the flow works if I put this
whole thing together. One, you want to figure
out the early adopter list. Then you want to
ask them for advice. You want to validate their pain
and your solution and only after that if you feel like they’re a
fit for you as a customer that you then make them an
offer using the MEVO framework. Just define it, it’s minimum,
it’s an offer and they buy. If you can do that at scale you
will be able to pre-sell your product before you
ever build anything. Take that capital and then build
the product that the customers bought and deliver on it. So real quick recap,
one, list of early adopters. Two, ask for advice. Three, validate pain
and solution and four, MEVO.
Make an offer. That’s how it’s done. So as I mentioned at the
beginning of this video I want to share a free training. It’s called my
“Idea to Exit” mini-course. Essentially I go over six
core modules about starting, launching, building,
marketing, funding and even exiting
a software business. So if you’re interested in that,
you can click the link below to get access to my “Idea to Exit”
mini-course where I talk about, and I go in depth in all the
concepts I talked about in this video and a bunch of other
nuances that you may not have like the belief and mindset that
you need to be successful in building a software company. Click the link below,
get access to that. If you liked this video, I’d appreciate if you
clicked the like button. Subscribe to the
channel and as per usual, I want to challenge you to
live a bigger life and a bigger business and I’ll
see you next Monday. How to pre-sell your
product before building it. (humming)

Written by Raul Dinwiddie