Photo Credit Nicolò Paternoster

This is somewhat of a confession.  Heck it is a confession!!!

I am sharing with you the deep inner secrets that lead to my most idiotic financial loss as an entrepreneur.

How is that for transparency??? :-) 

Once Upon A Time

About 6 years ago, myself and our company sunk about $100k of our own money into creating two products. 

1.  OfficeGateway - An online collaboration suite that small businesses could use for web-based email, calendar, and documents for teams.  Sound familiar???  Maybe Google Apps? :-) 

For fun, here is a shot of the site from the Wayback Machine 

2. YourTeam Online - Since we had so much success with OfficeGateway (sarcasm), we decided to try the same concept with the hockey world.  It was going to be the Facebook for the hockey world!

No fun screenshots for YourTeam Online.  The Wayback Machine can't even find it. :-)

These Are Great Ideas...Right?

They sound great...don't they?  (must remember what my therapist told me) :-)

They may look great, but there was ONE major underlying problem with them both.

NOBODY told us they wanted either of these products and we had about ZERO input from potential users as we built them.

We just assumed the world needed both of these products so we built them.

When barely anyone was using the sites, except for a handful of people who took pity on us (bless them). We kept thinking, if we only had this group as a partner, or if we only added this feature, we were going to have a Winner!

Ding, ding, ding!

No, that is not the winners bell...That is our heads banging off the wall.  We kept pouring everything we had (time & money) into these projects.

Learning The Hard Way

As you're reading this, you're probably spotting my mistake, right? You know that founders need to work with customers to develop their products. Well, believe it or not, I knew that too.

But what I didn't know was HOW to work with customers, and get their input, and build something they want.

This is the Nugget!  This is why I am sharing this.  Don't say you know this and not do it like me.  If you know it, actually do it...please!!!!

You can interact with your customers or potential customers in so many ways.

How Do You Research Your Market?

There are a number of ways to do this.  Here are a few resources I have used in the last few months to help with this process.

1.  Do a survey 

There are thousands of survey tools out there.  Pick one and use it.  

Ask your customers what they think about your product/service, what they want to see in the future and how you can be better.  Don't make it to long, but make sure you get the information you need.  We recently used PopSurvey to poll our customers this New Year.  Worked like a charm.

2.  Learn from experts

Over the last year I have been reading Derek Halpern's blog over at Social Triggers.  He does a great job of sharing ideas and strategies about what makes people tick when they are online.  

The other blog I have been reading is Ramit Sethi's, who is the best selling author of I Will Teach You To Be Rich.  Ramit has a ton of great content around the psychology of money and success.

Recently, Ramit and Derek got together for a session on Derek's blog and a big part of their conversation was around finding your market and researching the heck out of it before you go spend a bunch of cash.

Where were these dudes 6 years ago? :-)  It's a great listen and I recommend you check it out.

3.  Pre-Sell

What is pre-selling?  It's actually getting paid up front for something before you actually create the product or service.  

Authors are an example of an industry that does this all the time.  You can pre-order their books before they print them.  This helps gage their profits on a book before they even print it.

I took an online course by Clay Collins at the end of last year and Clay's course covers what he calls the pre-sell formula.  The course is very detailed and provides a ton of great information on how to pre-sell your next product idea.  

I actually used the methods from his course on a concept I had.  The concept never panned out, but I spent much less time and money on the product pre-sell by using his methods, compared to just going in blindly to create the product and then try to sell it.

So, why this may look like a loss on the outside, in actuality it was a HUGE WIN!

It stopped me from doing another YourTeam Online and OfficeGateway.  I saved about $99,000. :-)

If you are interested in learning more about Clay and his stuff you can check out his website here. (affiliate link)

The Great Ones Do It

1. Empathy - Intimate connection with customer feelings.

2. Focus - Eliminate all the unimportant opportunities.

3. Impute - People "DO" judge a book by its cover. Present products in a creative, professional manner, which will impute the desired qualities.

Notice point #1, empathy.  Isn't this exactly what we all should be doing when creating things for others?

Now I pass it on to you...

Why don’t more people do this? Is there more to it?  Do you already practice these principles with your business?  Please be specific. 

Leave a comment below with your answers.