Bootstrapping In a Nutshell is a series of articles where you'll learn how to bootstrap a new online business from scratch through a real-world project.
Now that the subconscious part of your brain will wake you up at 1:42 in the morning with an awesome domain name made for SEO, you can move on the most important part of your job.
Which is also, unfortunately, the most difficult one: talking to customers to validate your idea.
Why founders never get this right
Yes. You read well. Validating your idea by talking to customers before doing any building is the most difficult part of bootstrapping a business.
For several reasons:
- You may have no connections with your audience yet, no network, and no friends interested in your idea. So you'll have to work your ass off to build these.
- You don't want to get out of your comfort zone by talking to real people. It's scary. They may burn your beloved idea into ashes. They can even make fun of you publicly on a forum (yes, that did happen to me — I'm glad you asked).
- You want to avoid a feeling of rejection if nobody responds to your post.
- You absolutely want to work on your idea because you know it will work! So you avoid any confrontation with the real world as long as possible to avoid this harsh moment when the market says, "No, I decided otherwise. Sorry bro."
The thing is... If you're reading this article right now, it means that you want to make money out of your project so you must make a product that's useful.
Make something people want — Paul Graham
To be sure it's something people want, you must involve potential customers from day one, even before building the product. This way they can guide you along the way to create a product that will be customer-centric: a key to success.
That part of the process is the most difficult one to get right for all the reasons I mentioned above. But you can handle it easily with this little secret that will change your whole perspective about this.
The secret to becoming rejection-proof
The most important thing you must do to become good at this is to separate yourself from your idea. When people say, "That's the shittiest idea I've ever heard," they aren't talking about you. They don't know you. So don't take it personally. They're talking about the idea you suggested, that's it.
When you can separate your idea from yourself, you become unstoppable and also very flexible. Indeed, you must learn not to like an idea too much, because it will change and evolve over time based on customers feedback.
Keep in mind that this part is the most difficult for every founder, because it can instantly kill all your fantasies about your idea. You'll have to base your decisions not on what you think the world wants but on what your customers want. The difference between what you think and what they actually want is huge.
This difference is what makes an entrepreneur succeed or miserably fail.
If talking to people makes you feel like you're falling out of the sky and crashing to the ground, you're on the right track.
How to find your customers online
First of all, if your idea has a market, you should be able to easily find some website, blog, or forums that gather the type of people that may be interested in your idea.
If not, you should create this community first, before anything else. Because building a product starts by building a relationship with your customers.
Here is a quick list of some online points of contact you can use to talk to potential customers:
- Social platforms: Facebook, Twitter, Instagram, LinkedIn, Pinterest, Snapchat, Youtube, etc.
- Forums: use the advanced search prefix "forum: <subject>" in Google to filter the results to forums only.
- Blogs: use the advanced search prefix "blog: <subject>" in Google to filter the results to blogs only.
- Quora: use the advanced search prefix "site:quora.com <subject>" in Google to filter the results to Quora only. Ask questions there, answer questions, contact directly people that asked some questions.
- Competitors websites & forums.
This is not an exhaustive list. I don't want to create one because it's impossible. You must put yourself in the shoes of your users and ask yourself: where do they hang out online (or even offline)? You can also find some inspiration from the excellent Side Project Checklist.
No matter which channel you pick, remember to stay polite, follow the rules (most forums state their rules explicitly, for example), and build a relationship first with people here. It takes time. A lot. Be friendly, makes friends along the way. Then, tell them about your idea and ask for feedback. Do not post any link, simply talk about the idea, make it grow, shape it based on the feedback and on what you learn.
A real-world example
I asked Google where I should go for my blockbuster movies newsletter idea:
So last week, I registered on the movieforums website (@jemo) and started to post respecting the rules and presenting myself. On this forum, there is an elegant and elaborate system of reputation, people can upvote your posts. Also, you need to have 25 posts before you can post any link to avoid bots and aggressive spam. That's great!
I'm not here just to get feedback on my idea, I'm here to stay, because I love movies. Period. So all these restrictions are perfect, indeed they ensure a good quality of the community.
I learned a lot from this forum in just a couple of weeks by talking to people. Here are some things I learned:
- People are passionate about movies. There are thousands of people talking about and rating movies they just watched. People write huge blog posts about them, it's crazy! That's not a surprise, but I didn't think it was so deep. People love movies.
- People purchase DVD and Blu-rays several times a week. I asked myself why? With Netflix and the streaming technology, why do they still use disks? Well because they just love putting a DVD into a player. It's like a ritual. It's an emotional connection to a physical object (like people loving books).
- Netflix still runs its DVD service! Their landing page is really well crafted. "Happiness delivered to you". Emotions. Benefits for the user, no features talk, no contract talk, they bring you happiness through the mail. Awesome.
- I learned that Netflix is profitable with their DVD service even at $4.99 / mo because of some "tricks". Mailing in volume is cheap. Plus people don't see the movie immediately when they receive it. And there is the mailing time too: even if the mailing is free for the user, it still takes 2 days on average to go back to Netflix and 2 more days so they can send you the next movie on your list. Therefore, in total, you can see maybe 10 movies per month if you see it right away and send it back immediately (which is never the case — we're busy people). Those are interesting insights.
- I learned that you can pre-order DVD and Blu-rays at a discounted price on Amazon before they're released. That is a very good value proposition for our business like "Never miss a blockbuster. Save money by pre-ordering the movie you didn't see at the theater". It makes my brain think. Love it. Also, it's easy to use affiliate marketing in the newsletter to make money out of it.
- I learned that "blockbuster" was a famous TV show which means that this keyword may have several meanings for people searching for it. So I should use it carefully.
I started a new thread about blockbusters to see if I can have discussions with blockbusters fans like me. I will send them some private message about my idea so I respect the forum rules (no marketing, no spam). I will probably start other threads and talk about forgetting to go to see a movie when it's at the theater for example, I may get some insights from that too.
Update: Well, in fact, while writing this article a new very interesting answer came today on this thread:
Missing a movie that was playing at the theater may be a pain because you'll have to wait several months before it appears on the Netflix streaming service or for the DVD/Blu-ray to be released. My newsletter could fix that problem by sending to your inbox the new movies each week so you never miss one. That can be part of my value proposition, why not. We can also imagine some kind of reminders by email — when you want to see a movie you just tap on a "send me a reminder" button... Interesting!
Let's get back to the forum usage. I want you to keep in mind one thing here. I hate marketing. I hate advertisement. I hate when people come to a forum to drop a link to their website to get traffic. So you should never do that. NEVER.
I add new posts on this forum that I enjoy writing and talk about with the people there. Because I genuinely love movies. I always open up a new thread with something interesting and new for the forum that brings value to the community.
For example, even if I'm a big fan of blockbusters I'm wondering about the fact that indie movies have absolutely no chance to get to the theater and be watched by people when you compare the marketing budget they have against big productions. Maybe a startup (or a newsletter!) that promote only "indie" movies could be a good thing to do?
Did you see what just happened? By using my initial idea and some interaction with my potential customers, idea generation kicked in! So really, I've confirmed that your first idea doesn't really matter, like I told you!
How founders can always get this right
At this point, you should talk to your customers. Over and over before purchasing your domain name, before creating a landing page, before anything else. Just talk about your idea, try to shape it, make it grow, make it mature. Try to manually contact at least 100 people to talk about it. That's a lot, but that's what will make your results more trustworthy.
The time you invest here is not lost — it will make you save time in the long run by not working on a product that no one will want at the end. This is a huge advantage, really. So if you think "I'm losing my time talking to guys I don't even know instead of building something and show it to them", please, do yourself a favor:
Rewire your brain.
Think about it this way: "I'm saving time and pain by carefully involving users in my product from the start. This way I ensure that I spend my precious time and talent on things that matter to launch a successful product."
How to know when your idea is validated
Now in term of numbers. It's very difficult to put a threshold on how to know if your idea is validated. You can ask 100 people and 15 can be interested, is that enough? I don't know. This part is extremely difficult because you can ask the wrong people so your conversion rate will be very low, even if your idea aligns with the right people.
For example, you can talk to 100 random people in the street and have 5 people interested in your idea. Should you pursue? Should you try to hit 10, 15, or 30 interested people? Moreover, you can ask the right people but fall into an extremist subset of your market that doesn't represent the real market. Like you talked to 10 Linux users, and 9 of them are interested in your awesome new Linux-based idea! But it turns out that these users are Linux extremists so you fool yourself.
As you should put a threshold on this because you go nowhere otherwise, I suggest you put it on 10%. So you'll have to contact 100 people and have 10 of them that are interested in your idea. But what does interested mean?
Again, that's something quite difficult to address. If you can pre-sell a product, that should mean 10 pre-orders. So people should actually pay for your product before it's even built. For a newsletter, it should be 10 subscribers that actually put their emails in the form of a landing page.
Now let's be clear here: having a 10% conversion rate for a newsletter is far easier than for pre-ordering a product. Indeed people put their email easily on a newsletter landing page, but getting them to pull out their wallets is another story.
Based on all this knowledge it's quite difficult to determine if your idea is validated or not upfront, only experience will tell you. I take 10% for my newsletter idea, it seems reasonable, but you may adjust and take 5% for pre-selling your ebook.
Another way to think about it is by doing some CAC (Customer Acquisition Cost) and LTV (Life-Time Value of a customer) calculations. For example, let's say you want to sell an ebook. You put a landing page with a pre-sell order at $9. If you drive traffic to your website with some ads, and each click costs you $0.15, you can compute a minimum conversion rate so you're profitable with your ads (or at least don't lose money). If each visitor costs you $0.15, this means that at least 1 out of $9 / $0.15 = 60 visitors should pre-order your book, so you should have a conversion rate of at least 1.67%.
Anyway, judging if an idea is validated or not is really difficult. Determine a threshold and try to stick with it. Test multiple ideas, listen to your potential customers, let them talk, be friendly, make friends along the way and be flexible!
That's what I'm gonna do. The next step after talking to your customers is to make them actually take action with your product, engage with it. For this purpose you'll need to create a landing page.
In the next article, I'll show you how to create a landing page with a custom domain name through carrd.co. Write your thoughts about my articles in the comments: what can I do to improve them? What do you love the most about them? Thanks!
ABOUT ME: I'm a 32 yo software engineer and entrepreneur. I use my free time to start new online businesses. Actually I'm learning front-end development while building an audience on twitter, follow me ;-).
NEXT ARTICLE: Ep #3: How to Create Your Landing Page
FULL ARTICLES LIST
Ep #0: How to Select Your Next Business Idea
Ep #1: How to Select Your Domain Name for SEO
Ep #2: How to Validate Your Idea by Talking to Customers
Ep #3: How to Create Your Landing Page
Ep #4: How to Set Up Google Analytics For Your Landing Page