I have an idea of developing a particular product that will help anyone starting a new business or a new product tremendously.
Since it involves a lot of manual efforts instead of automation, I was thinking of putting a price of around $750 - $1500.
Before I go ahead and build a landing page, I would like to know if people even buy such high price products these days?
[The product would be a bundle of branding service, web design & hosting, startup legal documents & email setup.]
No. I won't spend anywhere near that before getting any traction. I'll spend money after I'm making 5k/month.
I did Atlas, which offers a lot for just $500 and was even able to help me open a bank account! It was still an expensive mistake to have a C Corp since I wasn't successful in my fundraising attempts. A lot of pain resulted and tax prep costs are approaching once again :/
This is why I've returned to what worked in my non-tech business before—frugality and minimum "business theater" until income warrants it.
I agree here, costs like that only make sense once you are able to guarantee the return on investment. Even so, people might still fall for it in case they have a certain level of guaranteed sales in their prognoses.
Let's say you are starting a small restaurant and don't have much IT technical skills.
Will you buy such a product then which includes Logo design, takeaway bags, signage design, visiting card, flyers etc?
Definitely not. The reason I learned how to code in the first place was the experience of running a couple of brick and mortar businesses that were frustratingly capital intensive, hard to scale and highly regulated. A restaurant is actually one of the very last kinds of businesses I'd ever want to start, due to those issues plus perishable inventory, food safety issues, low margins and a sea of competition.
If I suddenly lost all my tech skills and were somehow unable to ever write another line of server code again, I'd still build an online business and focus on learning about SEO and marketing in general. I'd open a free Mail Chimp account, start writing on Medium and building up that email list.
I know this isn't the answer you're looking for, but it is a true answer and maybe it can help you hone what you're offering or the audience you're targeting or both.
Let's say you are starting a small restaurant and don't have much IT technical skills.
Will you buy such a product then which includes Logo design, takeaway bags, signage design, visiting card, flyers etc?
I have no problem paying a 1000 for a product that delivers tons of value. But here's the thing. At the stage where your service actually comes into consideration (i.e. very early stage), I'm going to want to do everything as frugal as possible to minimize my risk. Even when I'm pretty sure my business is a good idea, there's no guarantee it will work. So I'll avoid these type of costs like the plague.
Which countries or markets are you looking at?
I think there is a bit of competition here from established brands that are already marketing the heck out of their services as they do their "one" thing "well".
Quick example:
Now in Australia it costs $500 - $600 to setup a company / $800 to for a trust (trusts are regularly used in Australia small business structures).
If it cost me $400-$500 extra for a logo, website and some basic hosting I don't think i'd buy it because I should already have all this before I am ready to incorporate as I don't want to lodge nil or loss tax returns because if it fails it'll be expensive to wind up.
I would only incorporate if I'm breaking even, expecting to shortly or I need to sign a contract for something specific, so i'd expect I already have these things.
I'm actually trying to think of a business type where they might be interested in a "complete" package, and maybe plumbers and electrician types maybe? These kinds of businesses want free/cheap and will likely just use a gmail address and a website with a wix subdomain.
This could work really well in Europe. It can be very expensive in some countries and is pretty cheap albeit complex to work through another EU company. Leapin.eu basically do this although they are more expensive
I was a bit negative before about trying to identify a market however since you already went thought the steps and your looking to do it as a turnkey solution, maybe set up a website and order form using WordPress / PayPal / Stripe etc and run some Facebook ads and see how it goes?
Facebook can offer very targeted advertising. Maybe target people who like the Godaddy or hostgator, FB pages with incorporation service?
Then once you build a list try and add additional services like bookkeeping, virtual CFO services etc.
That's a great idea. I think instead of making a product without any customer validation, based on your ideas, I am thinking of now creating a 3-4 page website and a PayPal link.
I'll advertise via FB and see how it takes up. If I get any customers, I'll try to automate few functionalities. Till then I can go the manual route.
If you limited yourself initially to a single target audience, like restaurants, then this sounds reasonable. It sounds reasonable because:
Then you could think of expanding to other niches that are like restaurants (e.g. other physical shops), but only after you've gained confidence in a market.
Nope, never. I don't spend a dime on my startups until they're paying for themselves and in the black. Sweat equity all the way.
I thought startups didn't have any money and wanted you to work for equity or exposure. Or is there another kind of startup I don't know about?
Hi Milan!
Coming from an agency myself I don't really see what's that unique here except for the low price point. And I think you might regret offering those packages for $1500 unless you want to work for Fiverr prices.
I hardly see how you can deliver a quality product at that price point. There really isn't a one-size-fits-all when it comes to branding a business or product. And multiple iterations are needed for until a client is happy with the final product.
When you work with clients directly, it's usually not the work it self that is most time consuming. It's the project management. But that's also why clients keep coming back. To not have to deal with the hassle of doing everything themselves.
If I were to start a new agency today, I would go the route of consultant/project manager. Meaning I'd rather build a network of 5-10 talented freelancers within different fields like graphic design, illustration, photography, web design etc. So instead of offering services all in house (like most agencies do), I'd put together the best team for each specific job to give the client the best possible product. But the client would only have to deal with you.
That't would also be my value proposition. The best people for the job, not just ok people for the job :-)
I'd negotiate better deals with the people in my network. Then bill my clients their normal full price + 20-30% extra on top of that for project management++.
On last thing. This industry is quite hard to get established in without a good network of people waiting to give you work. Without an existing network I wouldn't even consider going down that road.
This is exactly how I was planning to do it - if ever I do. I was planning to take freelancers for graphic designing, business communication, legal docs & web developer.
People buy products priced way higher than the $1,000 you're mentioning. The price point in itself does not say much though... It's about what value you're bringing to your customers for that money.
The things you're mentioning in the OP, branding, web design, hosting, legal, etc don't cost much anymore and can be done for a few 100 $ (if one would want to).
Furthermore, these are all peripheral tasks and don't really help the starting entrepreneur get on their feet. Doing those things is easy part to put it bluntly. I could have my VA get these things organized in a few days for less than $1,000. These things are almost a commodity these days.
My brother started a small chemical trading company last month. He is technically good and still, he needed a lot of help from me for all the peripheral tasks.
I helped him around 37 different items such as Logo Design, Visiting Card, Letter Head, Envelope, Invoice Design, Domain Purchasing & Setup (DNS pointing), Email setup etc.
So I was thinking of setting up a bundle & sell it online.
It might work... I guess people like myself wouldn't be your main audience, but there might be non-tech starters that are interested in this. Try finding some and see if they're willing to pay and if so, how much.
I do know for a fact that people do buy products at high price point, assuming it provides the appropriate value (one of our pricing tiers is set at $2,500 and we have customers who purchase this tier).
Good luck!
The price someone is willing to pay depends completely on the value you provide. Is it relevant to me and is it high quality? Sure I'll give you $3000. If I think I can get a better quality result for less somewhere else then I'll do that instead.
From your description it sounds like you'll provide one-time agency services? That in itself is a good idea I think.
However, unless you're an expert in branding, web design, hosting and law, I recommend you specialize. Sometimes less is more.
Overall, I'm not sure IH is the right community to ask this questions as most of us try to do as much as we can ourselves (among other things to save money).
That's quite a vague question. Help with what aspects? Legal? Financial? Technical? Validation? ...
Ok. I made an edit to the question to add more details.
Difficult to say unless you tell us what it is! :)
Ok. I made an edit to the question to add more details.