Validating Your Business Idea With Pat Flynn
You can be smart, capable, and willing to put in plenty of elbow grease – but if your business idea isn't viable, you're in for a world of frustration.
A dress that cost $45.
He was so happy to get a sale that he took the customer out to dinner so he could thank her and do "market research". The dinner cost more than the dress so he somehow managed to lose even more money.
As you may have guessed, he's no longer in business. And, unfortunately, I've seen this same scenario play out far too many times. Someone has an idea, they spend a bunch of time and money going to market with it . . . then they flop.
It's time to make sure you don't fall victim to the same mistake and instead, launch a successful business.
For this week's episode of the Launch Your Business podcast I sat down with Pat Flynn, author of Wall Street Journal Bestseller Will It Fly? How to Test Your Business Idea so You Don't Waste Your Time and Money. As an educator for entrepreneurs, Pat has helped millions of people think through and improve their business ideas.
Here are some of the takeaways from our discussion.
Avoiding failure to launch
While you don't want to haphazardly go all in and launch your business without a real plan, you also don't want to get caught up in analysis paralysis.
If you're feeling hesitant about getting started here are two quick questions that will help you gauge your direction so you can determine just how far and how fast you should leap.
1. What's stopping you?
Sometimes we don't even know what's blocking us until we sit down and put it down on paper – often this exercise helps us properly assess the risk.
For example you may be thinking "What if it doesn't work"? That's a valid thought, but then you want to think through the actual ramifications and discover how you can mitigate worst case scenarios. In this case, maybe you could initially start as a side-hustle as opposed to completely embracing entrepreneurship.
Or, you could be thinking "This is going to cost a lot of money". Another valid thought. Perhaps there's a cheaper way to test your concept, an opportunity to get investors or even secure grants that you don't have to repay.
The overall goal is to fully acknowledge your roadblocks so that you can determine how or if you should move forward.
2. What's the next step?
It's easy to get overwhelmed if you look at the big picture. So break it down into smaller steps.
What can you work on today? What can you do or learn that will move you closer to your goal? However, be careful not to keep accumulating information that you never put into action. As Jim Rohn stated "Knowledge, uninvested in labor, is wasted".
Instead, practice what Pat calls "just-in-time learning". Learn just enough information to take that next step, then actually take that step. If you get just one percent better each day for one year, you'll end up thirty-seven times better by the time you're done.
That's not to say it will take you a year to see results, but it reinforces why small steps help you achieve big goals.
The benefit of developing your idea in public
The core of Pat's message is that you shouldn't be building your business in secret, fine-tuning every last detail before release. You should fine-tune the idea in public by getting direct feedback from your audience. In short, your business idea should be informed by the market, and that can't happen if you're creating in a vacuum.
Therefore it's imperative that you identify and interact with your audience. Pat suggests doing so using the three P's: Place, People, and Products.
Where are your customers? While this can be a physical location, it's more likely to be a social media platform or online community. Once you know where they hang out, it's time to do some social listening. Learn as much as you can about your audience by listening to their questions, challenges and needs.
Another benefit of being familiar with these places? When the time comes, you know exactly where you should be marketing your service.
Who has already spent time earning the trust of the people you want to serve? What can you learn from them and their strategy? You obviously don't want to copy their every move, but success leaves clues so there's no need for you to reinvent the wheel either.
Join their email list, sit in on their webinars, follow them on social media. Become a student of success and apply what you've learned with your own unique twist.
Get familiar with how much space your competitors take up in the landscape. What is being offered in this space already? Where are there gaps? What do people like/dislike about that offering? What is the pricing like?
While this research may be time consuming, you'll eventually save a lot of time and frustration by getting a clearer understanding of the competitive landscape.
As a bonus, read customer reviews - both good and bad - this will give you an idea of what's working for your competitors and where you can make improvements.
How do you know you have a good business idea?
This is a complicated question but Pat simplified the answer.
You have a good business idea if you know your customers, what they need and how you'll provide it.
Here's how you get there:
Listen and engage with your audience, then pay attention to where you're finding traction. Again, this is the benefit of building in public. You may start to notice certain features or talking points that get a lot of attention from your audience. That means you're onto something and should continue honing in.
Start small, so you can build confidence in the idea and yourself as a business owner. Get one customer and one result, and build from there. Think of your first customer as a petri dish, the first paper airplane. Sure, it might fly a little crooked. Pick it up, look it over, and decide what you'll do differently next time.
Ask for feedback and referrals. You know you've achieved product-market fit when your customers are buying, using, and telling others about your product. But to get to that point you have to stay in constant communication with your audience and ask tough questions.
So get comfortable being uncomfortable. If you're not a little nervous, you're probably not pushing yourself enough!
Those were a few key takeaways from my conversation with Pat. To hear the full conversation and get access to additional resources tune in to this week's episode of the Launch Your Business podcast.
Want to keep learning? Subscribe to the podcast! We've got new episodes coming at you every Tuesday, and we're going to stay laser-focused on practical, straightforward content that takes the mystery out of entrepreneurship.
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