So you want to start a business…
You have your idea, you’re oozing passion and you go to bed each night fantasising about how you’re going to leave your job and buy a Carribean island…
But where the f*ck do you start?!
This is the most common question I get and the most common question that came up when I ran the Entrepreneurs Society at LSE.
It’s also one of the most poorly answered and misunderstood.
Here I’ll share one approach I’ve used that can get a business from 0 to first sale in 7 days – with a real life example!
You’re thinking too much
Flashback to August last year.
My brother tells me he has this idea to start a company selling video “tours” of flats in London to estate agents. Estate agents would then use these videos to more effectively advertise their properties.
“So there’s the idea. But I need to learn more about the property market first. And I need to research property videography. And then I need to make contacts in the industry. Then I guess I need investment, too,” my brother rambles on after giving me his pitch.
Too much thinking!
So many people get stuck in this phase: reading and theorising about the best way to start…but never actually starting.
Why this method sucks
Theory and research is great and should obviously be a big part of developing a business. But when you read too much (without actually starting) you shoot yourself in the foot, both feet in fact:
- You build a business for theoretical customers instead of real customers. You acquire and horde information from the internet on what customers of other businesses have liked, what’s worked for other companies. But they aren’t your customers. So you end up building a product for other businesses´ customers instead of listening to feedback from your own customers and building the product your customers want…
- You over complicate the product. Reading and theorising about all the possible features you could include, you come up with this grand vision for what your product could look like – and often it’ll include an ML algorithm, an app, a production plant etc. All of this is expensive – so then you think you figure: “I guess I investment to get this off the ground…” And start chasing investors instead of building the product!
And then finally, once you’ve secured investment and built your 1000-feature ML-algorithm-chat-bot-iOS-application (with built-in windshield wipers)…after you’ve invested 1000s of hours and tens of thousands of pounds…you find out customers don’t actually want feature Z, they won’t pay for W and your marketing strategies Q and L don’t work. And you’ve wasted a year of your life…
A better approach: just f*cking start
So we could burn time and money, over-theorising and over-researching, building an overcomplicated product with expensive-to-build features that no one wants…or we could just start.
This is approach is usually referred to as building a minimum viable product (an MVP).
So for my brother: instead of building a team of videographers, investing in an ultra-slick website and promo video…
We just started!
We stripped away all the complication and drilled down to the bare minimum we’d need to make our first sale.
The idea being that once we had a customer, we could use customer feedback to develop and test the business model and product. Instead of building a product behind closed doors that real people don’t really want, we would build it with customer input and real-time feedback from the real world!
Building the MVP from First Principles
The idea was most recently popularised by Elon Musk and really just means drilling down to the very roots of a problem or objective…and then working backwards.
So in our case, what we really want is to make that first sale – that’s our objective.
From here we can step backwards.
How do we make our first sale?
First, we need to offer something of value that a customer will exchange for money.
Value = we provide a video tour of an estate agent’s property. We do the camera work and editing, they get a valuable video that can increase visibility of their property in search engines and help them close sales more quickly.
So we bought the camera and editing software – that was that.
Next – how do we get this value proposition in front of people? (So they can pay for it!)
Easy – a website. And then we cold email estate agents (because we didn’t know any estate agents at the time).
If estate agents are interested, we’ll make a sale! And we can grow from there…if not, we go back to the drawing board and iterate on the idea (but notice how we won’t have wasted excessive time or money on an idea that doesn’t work!)
Building the MVP: step-by-step
We built an extremely simple one-page website, enough to test whether there was interest in our idea (or not).
You can view the final website here.
First we need a cover photo. We’ll go to unsplash.com which offers free high-res cover photos, and get one relevant to selling properties:
This kitchen looks nice enough. So we’ll upload that to Squarespace.
Next we need a strap line (catchy and sexy), a descriptive line (explaining how we can add value to an estate agent’s life) and a call-to-action (an offer for the estate agents to click on):
Strap line = beautiful video for beautiful homes.
Descriptive line = An Open Door video can increase your property’s sale price by up to 10%*
Call-to-action = FREE FIRST VIDEO
*This stat is from a Wall Street Journal article, which we list further down in the website.
Clean and simple – looks legitimate.
But we still have a problem: we’re a completely new, unknown company that started 10 seconds ago. So we need to add credibility.
Best way to do this is with real customer reviews…but we obviously don’t have any yet. So instead we’re going to grab some statistics from the internet, and use those to evidence the possible value we can add.
We’ve established some (albeit limited – for now) credibility. A prospective client can see that property videography can help them and has helped other estate agents.
Next, we need to get into the details – what exactly do we do?
Keep this bloody simple and straight to the point:
Okay, so now prospective client understands how this works and how they will benefit from the claims made earlier on (e.g. the 10% increase in property price mentioned at top of webpage).
After this, we’ll throw in another call-to-action (because if prospective customers didn’t click the first one, it’s probably because the needed more convincing…which should be taken care of at this point – after the credibility and how it works sections).
You can view the final website here.
Building the MVP: first sale
So the website is up…now we need to get it in front of our potential clients!
We did this by searching different London-based estate agencies on LinkedIn, getting the names and contact details of employees at each firm, and then adding those details to a mailing list on Mail Chimp. (You can also try Google Ads, Facebook or Instagram to get in front of your audience.)
We sent out this MailChimp newsletter to our newly acquired email addresses:
Clear explanation of value proposition and the call-to-action (the free video).
This didn’t work – MailChimp’s data showed very few recipients were opening the email so perhaps it was landing in junk. Of the few who did open, we didn’t get any submissions 😞
So we iterated.
We could have tried to switch up the website, the newsletter, the copy…but without knowing exactly what was limiting our responses, it didn’t make sense.
I wanted to speak to a real-life estate agent to understand how we could improve.
So instead of cold-emailing, we tried cold-calling.
This was amazing – within our first 6 calls, we’d got one lead interested in the free video, and we learnt a huge amount about what estate agents want. (So we could iterate to suit these wants)
After delivering the first videos, we made sure to take a testimonial and then uploaded this to the site to build further credibility.
And then we repeated – another series of cold calls.
This time the second call got us our second lead and after delivering his free video, impressed with the service, he asked us for the regular price of a video like this…we gave it, and the first sale was made!
More examples of the “just f*cking start” approach – coming soon!
So, stop overcomplicating your idea and endlessly reading business books without actually starting!
If you have an idea, strip it down to its bare minimum, and get it out to market. From there, use customer feedback to work out how to make it better and make it work.