Hustling: A Prerequisite for (Startup) Success; or Maybe Just BS?

“The first principle is that you must not fool yourself — and you are the easiest person to fool.”

“Cargo Cult Science

“The (Hustle) Talk”

Whether you’re new to startups or being in this space forever I bet you had “the (hustle) talk”.

As matter of fact, is not really a talk…is more like a lecture if I may say so.

Which pretty much goes something like this:

If you’re not hustling, you’re losing

Yep, is short, sweet, and to the point.

And sort of binary I may add!  

Either you do it, or you’re destined to fail.

But what does hustle really mean?

Well according to our friend Adam Pittenger, a ‘believer’:

Hustle is saying no to happy hour to prepare a pitch deck. Hustle is waking up early on a Saturday to write a new company blog post. Hustle is quitting Clash of Clans because it took more than 5 minutes of your day. Hustle is skipping dinner and a movie because that $50 is two months of your team’s Github plan.”

Or said differently, is the notion that unless you absolutely devote your whole life to your thing & burn both ends of the candle you won’t make it as an entrepreneur.

So, today’s question?

It couldn’t be more straightforward…

Is hustling a core ingredient to a startup’s success; or maybe just BS?

Ok, let’s jump straight into this.

The Case For Hustling

So, why many think hustling is a prerequisite for (startup) success?

4 words…

No Pain, No Gain!

Not surprised, right?

After all, we have all trained to believe that nothing good in life comes easy…

But if we get back to Adam’s definition & read between the lines… (ok, this might be a stretch as it’s pretty obvious) you’ll see that he is not just talking about hard work.

That’s right – other than that, he indirectly touches another key premise behind the concept of hustling.

Which is of course the idea that you have to be willing to do things that others won’t…

Because, if you think about it working hard is so intrinsic in most societies (especially in the Western world) that it makes it almost ‘business as usual’ for the majority of people.

But a true hustler not only works hard but also goes above and beyond ‘the call of duty’ (aka as going all in, big time) and do what others won’t even dare to think…

Think that is hard?

No problem – Michael Arrington has an advice for you:

“Work hard. Cry less. And realize you’re part of history.”

Yep, in an article of his on this topic suggests to new entrepreneurs to…

… get used to the idea of working crazy hours, crying less and quitting all the whining because startups are hard and there is no other way.

Or at least that’s the claim!

So, what do you think; time to explore the other side of this story?

Good, let’s do it!

Thinking of Hustling? STOP!

Kind of counter-intuitive, right?

I know – nonetheless, quite a lot of insiders think that the ‘culture of hustling’ promotes a path to nowhere.

As they say, the idea that if you’re not hustling, you’re losing, is a lie.

Why I hear you ask?

3 reasons to get you started:

Reason #1: Hustling ≠ Being Productive

And the reasoning behind this statement is that the hustle mantra produces a belief that you have to do it all.

Yes, everything!

But what’s wrong with that?

You guessed it – lack of focus, strategic thinking and delegation.

And surprise, surprise a common by-product of this attitude is poor productivity.

Which as might imagine at this sensitive level of a fledgling business it can very well be a startup killer.

Reason #2: It’s a fast-track to burnout

The assumption here is that working crazy hours comes at a hefty cost.

As the proponents of this line of thinking suggest hustlers’ have to come to terms with their body’s biological limitations and stop pretending they’re robots.

Because otherwise will find themselves sooner than later not just being overworked but also stressed, overwhelmed and inevitably irreversibly burn-out.

And considering that turning an idea into a viable, cash-producing business can be a long game you simply can’t afford putting yourself in this situation.

So, the advice from our hustling opponents couldn’t be more straightforward:

Stop trying to sprint a marathon, ditch unhealthy working habits and abide by the human biological needs…

Reason #3: It exacerbates new entrepreneurs’ hero syndrome

And last but not the least comes the hero syndrome.

Not familiar with this term?

Here is a neat definition:

Hero syndrome is an unconscious need to be needed, appreciated or valued that disguises itself as a good thing, but threatens to make you bitter and to overextend you.”

But how is that related to today’s topic?

It’s simple – hustling is a form of a virtuous signalling deployed by new entrepreneurs to fulfil their own hero syndrome (and make them feel good about themselves).

Just think about this…

How many times you’ve listened to other entrepreneurs humblebrag about NOT what they have achieved but instead how many hours they put in on a daily basis?

As I guessed…

But you know what; hustling is not just a ‘humble-brugging exercise’.

People actually do that because they also believe in what I call the input-output theory.

Which as the name implies is the idea that the more hours you put in the better results you’ll get in return.

And needless to say that goes hand in hand with what scientists call the busyness disease (for how busyness became the ultimate status symbol have a look at this post).

Conclusion

So, with all that said what’s my take on this?

Well, even though I am a firm believer in the ‘no pain, no gain’ philosophy I do believe most hustling preachers are…

… serial virtuous signallers (and a good chunk of them committed BSers if I may say so) that preach an aggressive form of hustling that does more harm than good (for the very reasons listed above).

Yes my friends, the idea that you have to put “17 hour work days” to make it, in my opinion, is by all standards just ridiculous.

And I say this as a person that I did my fair share of sacrifices so far…

But to answer today’s question; is (this form of aggressive) hustling a prerequisite for startup success; or maybe just BS; I would probably say the latter!

Because in my opinion startups win with focus and not by doing (or trying to do) more…

Plus, ‘the input-output productivity theory’ according to many (me included) is more a myth than reality.

And with that my friends comes the end of this post.

I hope to see you soon.

Best,

Andreas

***

If you enjoyed today’s post, check out my kindle book, The Aspiring Entrepreneur Entry Strategy: A practical step-by-step guide for finding a validated, winning business idea that stays true to who you are, that is currently available at Amazon.

 “Figure out how to “kick your own ass; Right now, someone out there is trying to figure out how to be better than you at what you do. The best way to beat them is to put yourself in their shoes and figure out how to beat yourself”

-Mark Cuban

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Profitable From The Get Go: Is That Even Possible?

“A dead end street is a good place to turn around”

-Naomi Judd

First year of trading

About to start a business?

And wondering how long would it take until ‘the baby’ to start spitting out (net) cash?

I have some bad news for you…

Not anytime soon.

Or at least that’s what the conventional wisdom suggests!

Shocker, right?

I know – after all, someone has to pay the pills.

And that someone is YOU!

But is ramen profitability really beyond reach when starting out?

Ramen what?

Ok, for those of you wondering what’s that about, here is a neat definition from our friends at QuickBooks:

Ramen profitable describes a business owner who is barely making enough to earn a small salary and pay living expenses, but is making a profit.”

So, with that aside let’s get back to today’s question:

Is getting profitable, even at a ramen level, doable during your first year of trading; Or is it just a sheer fantasy?

Ok, let’s start digging…

Shooting for ramen profitability? Don’t hold your breath!

Yes, you did read that correctly!

Profits at your first year shouldn’t be expected.

In fact, it takes much more than a year for hitting cash-positive.

How much more?

Well, Dee Lio, an advocate of this line of thinking, put’s that number to 3 years.

In his words, the story typically goes something like this:

“In the first year, you’re usually red. The second year (if you make it), you’re generally even, but saddled with the first year’s start up costs. Year three usually pays back year 1, with true profits starting near the end of year three.”

But what’s the reasoning behind this phenomenon/claim?

The reason why the majority of new companies, on average, have to go through this cycle until to find their footing and turn things around is because

hitting product/market fit TAKES TIME!

Yep, getting the product’s value prop right doesn’t happen overnight.

Of course, this comes to no one’s surprise.

Only a quick look out there (aka market) makes it clear even to the hardest critique that rough, half-arsed, products are more the norm than the exception.

And if only that was the problem…

What do I mean by that?

Well, here is the thing.

Even after your product hits ‘market acceptance’ you still have to refine/boost a bunch of other critical business elements such as your:

  • Marketing Engine
  • Business Economics
  • Product Pricing
  • Business Credentials
  • Value Delivery
  • Customer Retention

And the list goes on…

Tough, right?

I know.

So, with all that said, is it time to settle with the idea of being cash-strapped for a couple of years post-launch?

Wait for it…

NO!

How come?

Introducing the ‘alternative reality’.

Not such thing as an exact time-scale

Yes, my friends.

There is another side to this story.

The one that suggests that these numbers are just made up and don’t stand up to the slightest scrutiny.

As they say, every business is different, hence naturally depending on factors such as the type of industry you’re in, your level of domain experience and the business model you have adopted, the breakeven time would naturally be different.

But let’s take these 3 variables one by one:

1. Business Type

Yes, it seems that there are some winners (plus some losers) when it comes to time-to-profit.

Or again, that what the claim is.

Here you go…

Winners: Professional services, online/home-based businesses, drop-shippers, e-commerce stores, ‘sharing-economy’ companies.

The why?

Because company types like them are characterised by low overheads, little to no startup capital needed, and a flexible business structure.

Losers: Retail shops, hospitality/leisure businesses, manufacturers, construction companies, restaurants, software providers, apparel stops, recruitment marketplaces.

The why?

You guessed it – for the exact opposite reasons than the ones listed earlier.

2. Level of domain experience

Ok this one won’t need a lengthy explanation.

In a sentence, the suggestion is…

… the more domain experience you have before jumping in, the less time you would need for figuring things out and turning into profit.

And for some that’s only logical since by being an insider you will naturally be better placed to seize market opportunities and ‘steer the ship’ in the right direction.

3. The Space/Industry you’re in

Last but not the least comes the industry variable.

The suggestion here is that some industries are tougher to be cracked than others.

A couple such examples?

– Web Search Engines

– Social Networks

– Investment Funds

– Retail

– Recruitment

Conclusion

So, from everything that is being said so far what is true and what is BS?

Well, at least from my own experience, getting profitable, even at a ramen level, during your first year of trading is a tough one, especially for first-timers.

And just to be clear, in no way I am suggesting that is ‘impossible’ just highlighting that figuring everything out (see list above) and hitting product/market fit is definitely not a walk in the park.

As for those that are suggesting that “some business models out there are ‘loss-proof’ and conducive to immediate profitability…

… let me say this:

THERE. IS. NO. SUCH. THING. AS. A. LOSS-PROOF. BUSINESS. MODEL

Yep, that’s what I call a classic business BS as usual.

Having said that, I, of course, acknowledge that some business types, models, industries are tougher than others…

… but not to the extent of making it either impossible to beat the odds or in the opposite scenario to turn it into profit from the outset.

But to answer today’s question…

Yes getting profitable is doable during your first year of trading but tougher than most wannabe entrepreneurs would ever imagine. 

And with this said let’s wrap things up with today’s key takeaways…

Today’s Key Takeaways

– Hitting product/market fit is easier said than done

– There is no such thing as a loss-proof business model

– Some markets are tougher to be cracked than others

***

Ok guys, that’s all from me for today.

If you enjoyed today’s post, check out my brand new book, The Aspiring Entrepreneur Entry Strategy: A practical Step-by-step guide for finding a validated, winning business idea that stays true to who you are, that is currently available at Amazon.

I hope to see you soon.

Best,

Andreas

“Winning is a habit. Unfortunately, so is losing”

-Vince Lombardi

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Breaking Into An Overcrowded Market: Is It Ever A ‘Sane’ Decision?

“If you come in late, you have to have a bloody good reason for the consumer to switch”

-Tim Ambler

The New Norm: Supply Exceeds Demand

We’re all scre*ed.

Yes, even you. Your ex-boy/girlfriend was right!

In case you’re wondering, I am of course talking about startups…

Whaaat?

Well, kidding-aside, here’s the thing – despite in which industry you’re about to enter (as a new startupper) the story is pretty much always the same:

The supply of products exceeds demand.

Put differently, unless you’re going after a brand new market category (which statistically speaking is more the exception than the rule) you’ll have to face an overcrowded market.

Yep, a market packed, big time, with competition!

And for some, that alone is kind of deal-breaker…

Why I hear you ask?

Ok, let’s start digging.

Is Entering A Crowded Market Worth The Gamble? NO

So, why many suggest entering an over-saturated industry should be a non-option?

A couple of reasons:

Reason #1: It makes it much harder to make it

The underlying assumption here is straightforward.

Unless you have a completely unique good (or alternatively something which is WAY BETTER than what is currently out there) attracting people with the will to even give you a chance becomes almost a mission impossible due to the myriad of rival offers.

The bad news?

You probably don’t have that product.

Or at least that what the claim is!

And for driving that point home, the advocates of this school of thought, back-up their claim with a bunch of, wait for it…

…startup failure rates statistics.

Love them or loathe them, are here ‘to tell the truth’.

I know, sad isn’t it?

Reason #2: It makes it much more expensive to break through the noise

That’s right – if shrinking (success) odds were not bad enough the increased marketing costs come to make things even more miserable.

And this is only natural!

Why is that?

It’s simple – one of the biggest challenges for new products is attracting the attention of the right people at the right time and…

with a market packed with competing products, offers, marketing messages/claims breaking through the noise becomes:

WAY. MUCH. MORE. EXPENSIVE.

Yep, irrespective which marketing strategy you use (organic, paid, inbound, social, etc.) you would still be competing – with a sh*t load of competitors for the attention of the very same crowd.

The moral of the story according to them in a sentence?

Cutting through the clutter in our over-communicated society is easier said done under normal conditions let alone when the market is oversaturated.

Reason #3: There will be “less meat at the bones”

And ‘surprise, surprise’, as a result of all these negative side-effects of jumping in an overcrowded market the profit margin up for grab will be much smaller.

As Jeff Thermond, a proponent of this line of thinking, explains in an article of him on Forbes:       

When buyers have a lot of undifferentiated choices, the price they are willing to pay drops… If the structure of the market says prices are well below what a less crowded market would have supported, then the ceiling of what any given vendor can expect in sales gets lowered precipitously.”

Yep, supply and demand baby!

So, time for ditching oversaturated markets?

NO WAY!

The Case for Entering Crowded Markets

You did read that correctly…

Entering a crowded market for quite a lot of ‘startup insiders’ is very much considered a savvy business decision!

The reasoning?

Well, according to them it mainly boils down to these 3:

Factor #1: Saturation = High Demand

I know, pretty obvious.

After all, it doesn’t take a rocket scientist to see why an overcrowded market is a clear sign of strong buyer demand.

And that’s why for many, the notion that you shouldn’t dip your toes in an overcrowded market is rather idiotic.

As Marc Andreessen famously said once, Market matters most; neither a stellar team nor fantastic product will redeem a bad market. Markets that don’t exist, don’t care how smart you are.”

Hence, by jumping in a market with proven demand you at least know you won’t try to square the circle.

Reason #2: The more mature an industry is, the more established the market needs are

How come?

Well, if you think about it in new industries, in general, peoples’ needs are vaguely defined (or even formed at the very beginning).

Take tablet computers for example.

When got introduced into the market in 2001 there was a lot of speculation about how a customer will react, what features will value most, how much will be willing to spend, what will be the impact on other mobile devices and so on and so forth.

Could someone predict all of these in advance? Or maybe just a couple months post-introduction?

Not really. 

Which that alone creates a lot of uncertainty because it forces entrepreneurs to base their business decisions based on few facts and many assumptions.

And unlike the big companies bootstrapped entrepreneurs don’t have the big bucks to afford take a gamble…

On the contrary, in mature industries, there are many more knowns than unknowns when it comes to customers’ needs, spending patterns, and priorities which naturally brings much more clarity.

Reason #3: You can still rise above the noise and get an edge

But how is that possible?

No guesses here…

By de-commoditising the product and carving your own vertical, you can claim your piece of the pie.

Yep, just because you will encounter many competing products out there doesn’t mean you’ll have to foolishly commit suicide and fell into the sameness trap.

And that not even news – today’s startups are doing exactly that successfully every day.

A couple such examples?

Here you go:

Referral Candy (referral marketing tool for e-commerce sites)  

Fetcher (profit analytics tool for Amazon sellers)

Makers Academy (computer programming bootcamp for aspiring web developers)

Writers Access (freelancing platform for content writers)

Adespresso (Facebook ads optimisation platform)

And the list goes on…

***

My take an all this?

OM: The Future of Today, Tomorrow and the Day After Tomorrow

That’s quite a bold statement you might very well say.

So, why I think that way?

It’s simple – because that’s has been the case FOREVER.

Yes my friends – completely new industries that are emerging almost out of nowhere happen from time to time but statistically speaking are more the exception than the rule.

Just look around you – how many of the products you see are coming from established industries and how many not?

As I guessed…

And you know something else – just because an industry is mature doesn’t mean is not evolving.

Take commerce for example.

You see 100s of new entrants per day (primary from online players), ground-break innovations, unprecedented technological efficiencies but the industry is still the same. 

Having said that, of course from time to time you see a completely new industry emerging almost out of nowhere

My point in a nutsell?

Hype-aside, breaking into an overcrowded market, in my opinion, is not just a sane decision, but especially for first-time entrepreneurs THE BEST WAY TO MOVE FORWARD.

Because, as Dan Norris famously said one:

“On your first venture do NOT play the visionary”!

And with that said let’s conclude this post with today’s key takeaways…

Key Takeaways

– Saturation = High Demand

– The more mature an industry is, the more established the market needs are

– Market matters most; neither a stellar team nor fantastic product will redeem a bad market

***

Ok guys, that’s all from me for today.

If you enjoyed today’s post, check out my kindle book, The Vertical Startup: A business type for down to earth, aspiring bootstrapped entrepreneurs for turning a late market entry into an advantage, that is currently available at Amazon.

I hope to see you soon.

Best,

Andreas

“The big problem with avoiding competition is that you are also avoiding customers.”

– Erik Sink

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Instant Gratification: Must have or maybe just overhyped?

“Discipline is the bridge between goals and accomplishment”

– Jim Rohn

The Power of Now

How long does it take your product to deliver on its promise?

If your answer is ‘a couple of weeks’, you need to change that.

Or at least that what the claim is!

But why?

Introducing instant gratification…

Say what?

Come on – I am sure most of you came across this term hundreds of times.

But just for the sake of consistency here is a formal definition from our good friend Neil Patel:

“Instant gratification is the desire to experience pleasure or fulfillment without delay or deferment. Basically, it’s when you want it; and you want it now”.

I know, there is much talk these days about the ‘age of impatience’… 

… and of course about the companies riding this trend by offering products that tap into 21st-century consumers’ universal desire for instant gratification.

A couple such examples?

Here you go:

Spoonrocket (on-demand lunch in 10 minutes)

Hanic DC Aqua (transparent white teeth makeup)

PostMates (any product from any store in an hour)

Toppik (hair building fibers for instant full thick hair)

Amazon Prime (one-day delivery)

FedEx (overnight package delivery)

And the list goes on.

Today’s question?

Is instant gratification a must have or maybe just overhyped?

Ok, let’s start digging…

The Case for Instant Gratification

So, why people think building instant gratification into your product has almost become a must have in today’s market?

Here are 3 reasons to get you started…

Reason #1: Is not just expected but demanded

Yep, in line with what we said before the conventional wisdom suggests that today’s customers:

a) Hate waiting (or at best have little tolerance for it)

b) More often than not expect instant results as a given

c) Have little to no loyalty and are happy to shop around until to get what they want

The moral of the story?

Deliver instant gratification or die.

Reason #2: It plays on your advantage (due to the hyperbolic discounting principle)

What’s that I hear you ask?

According to Joseph P. Redden: “Hyperbolic discounting refers to the tendency for people to increasingly choose a smaller-sooner reward over a larger-later reward as the delay occurs sooner rather than later in time.”

That’s right – the further away an outcome is delivered in the future, the smaller the drive to get that thing (the one that delivers it) now.

So, if our economists’ friends got this right and people have always had the tendency to prefer present rewards over future…

… someone might easily conclude that’s another valid reason to add this element it into our product mix.

But wait there is more!

Reason #3: It can help you stand out from the competition

And here the assumption is, that even though clearly is something people want, delivering it is easier said than done.

Hence, if achieved by a company it can become another barrier to competition seeking to come and eat your lunch!

Just think for a moment:

Company A delivers ‘product X’ in 3 weeks.

Company B delivers ‘product X’ in 1 week.

Which one would you pick?

Assuming that the ‘product X’ is indeed roughly the same in both cases, the answer becomes obvious, right?

And what’s even better according to the instant gratification supporters is that you can also typically charge more (as a premium) for …

… delivering value faster than the rest of the pack.

So, what do you think; is it about time to bake instant gratification into our product?

WAIT!

The Case Against Instant Gratification

Yep, there is another side to this story.

The one that suggests instant gratification is NOT ‘a must have’ but just another overhyped, outdated and counter-productive ‘sacred cow type of idea’ that we have to kill once and for all.

But why?

Here you go:

It denies customers an anticipation experience

Whaaat?

That’s right – anticipation builds up excitement and by throwing it under the bus we’re shooting ourselves in the foot head.

Or as Pamela N. Danziger more eloquently put it:

While consumers say and believe that they want what they want when they want it, brands that cave to their demands for instant gratification may be doing their customers, and ultimately their brands, a disservice by stripping away the customers’ emotional anticipation for something wonderful to come”.

Just take the extreme example of Hollywood movies.

Why do you think producers put so much time, money and effort producing these expensive short film trailers/teasers months before the movie it’s released?

You guessed it – it is because is time-tested method to generate pre-release hype, buzz and excitement.

But anticipation doesn’t just stop in the pre-phase – in fact, it exists also during and after the purchase.

And the claim here is that if you give customers what they want (aka end-result) straight away you don’t allow them to fully appreciate the value they receive.

Which ultimately yes affects their overall satisfaction.

The worst part?

Instant gratification attracts the wrong type of customers…

Yes I am talking about the ones (aka delusional) that seek quick-fix solutions for everything because, well, that’s how life is supposed to be…

Or at least that’s what they think.

Conclusion

My take an all this?

Even though I have to say it’s a tough one and I can see the merits of both school of thoughts if I had to pick a camp I would probably go with the power of now.

Not necessarily because I buy the superficial argument that “you can either deliver instant gratification or die”, but mainly because I think you can play that card in a way that:

a) Doesn’t kill anticipation all together

b) Prevents the wrong type of people getting into your funnel

And with this said it’s time to put this post to bed with today’s key takeaways…

Today’s Key Takeaways

– The further away an outcome is delivered in the future, the smaller the drive to get it is

– Anticipation builds up excitement and excitement builds sales

– Today’s customers have little to no loyalty & are happy to shop around until to get what they want

 ***

Ok guys, that’s all from me for today.

If you enjoyed today’s post, check out my kindle book, The Aspiring Entrepreneur Entry Strategy: A practical step-by-step guide for finding a validated, winning business idea that stays true to who you are, that is currently available at Amazon.

I hope to see you soon.

Best,

Andreas

“When you find yourself in a hole, stop digging.”

– Will Rogers

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‘Mini-Me Targeting’: A Great Business Strategy or Maybe a Curse in Disguise?

“Vague direction leads to misalignment every time”

– Greg McKeown

My Target Group Is…

Startupper struggling to decide who should be your target audience?

Here’s an idea.

Pick yourself…

Whaaat?

Yes my friends – I am of course referring to the classic business strategy of going after people like you.

Or as Tim Ferriss likes to put it “be{ing} a member of your target market”.

But what’s the logic behind this advice?

And most importantly: is it any good?

Ok, let’s get straight in…

Mini-Me Targeting Is Here to Stay: Here is Why!

So, what’s the reasoning?

According to the ‘mini-me targeting’ supporters it mainly boils down to these 2:

– You build a product (& go-to-market plan) faster and better

Yep, knowing intimately your target group – which happens by definition when you’re one of them – gives you a great head start because…

…you’re already ‘inside their head’ & understand deeply stuff like their motivations, pain points, life situation, concerns, what they like, buying habits and much more.

The alternative?

Starting with a clean sheet, which quite often ends up being the reason you have to:

a) Carry out extensive market/customer research (which btw yes it takes time)

b) Make a ton of customer and market assumptions (or guesstimates if you will)

b) Unnecessary go through multiple iteration cycles until to figure out which of your assumptions (from your research findings) are true and which are dead wrong

The moral of the story in a sentence?

You guessed it – building stuff based on facts (and first-hand experience) and not assumptions is always better!

–  You have a better founder-market fit

Ok, this own is pretty obvious…

Being one of them makes you more relatable.

And especially when it comes to selling that’s pretty important.

Why?

Our friend Scot couldn’t have put it better:

“People like people that they can identify with. There’s an inherent sense of understanding injected into an interaction when you connect on something.”

That’s right – in business as in life, people tend to feel more comfortable around people like themselves…

Just think for a moment: when was the last time you bought something from a business based on the relatability factor?

As I guessed it – a ton!

So, assuming we all agree that market targeting (and positioning) can make or break a business and ‘mini-me targeting’ brings so much to the table is it time to choose ourselves?

Well, before making up our mind let’s first see what the other camp have to say…

Mini-Me Targeting: Overrated and Even Unnecessary  

Yes, not only overrated but even unnecessary.

You did read that correctly!

Why?

It’s simple – being an outsider enables you to see things with a fresh pair of eyes.

As cliché as it sounds, it’s true.

Or at least that what the claim is…

So, why coming with ‘a fresh pair of eyes’ is even an advantage?

Well, the assumption here is that contrary to the ‘mini-me targeting’ conduciveness towards group thinking, by being an outsider it’s easier to see things from a new angle, challenge long-held orthodoxies, and bring radical solutions to the market.

Sort of like the ‘diversity talk’ someone might add…

Take for example Dane Maxwell a big advocate of this line of thinking.

He started Paperless Pipeline, a transaction management software for real estate brokers (& made it an 8-figure business) WITHOUT being an estate broker himself.

Yes, he knew little to nothing about that market segment and just relied on his market research and in-depth one to one customer interviews…

His thought process?

“A lot of people get stuck because they’re very me-focused. ”What’s my passion? What are my interests? What are my skills?” Get away from YOU and completely shift to what the pain of the customer is and become passionate about improving their life.”

The verdict according to this school of thought?

Going after people just like you might give you a further edge on understanding where they are coming from but…

… nonetheless produces a myopic thinking that more often than not results in “business as usual” type of solutions.

And at the end of the day, since people don’t buy products but outcomes if the prescribed solution is as everything else in the market no amount of relatedness can save the day.

The alternative?

Introducing probable purchasers…

Probable Purchasers: The What, The How and The Why

The What:

“Probable Purchaser is the type of person who is perfectly suited to what you’re offering. Trying to appeal to everyone is a waste of time and money… By looking at the unique traits of what you’re offering and the corresponding worth of those characteristics to certain individuals [you can find your probable purchaser]”

– Josh Kaufman, The Personal MBA

The Why:

By finding out which people are perfectly suited to what you are offering not only you can support higher prices but also market more effectively the product.

The How:

Rather than abstractly thinking who should be your target audience before even to actually have a real product, take a critical look at what you have to offer, perform a classic market segmentation and then decide which market segment values your product more.

Conclusion

My take an all this?

Mini-me targeting is a great business strategy and won’t go away anytime soon for the very reasons listed above.

And as for the probable purchasers’ concept here is what I think:

Expecting to define your ideal target customer after you build the product is…

…A CAR CRASH WAITING TO HAPPEN!

The reason?

The regular readers already know the answer – because of the solution looking for a problem situation. Which is a BIG contributor why entrepreneurs come up with “solutions” for imaginary problems (or problems that people don’t care enough about for paying).

Having said that, the probable purchasers’ concept can be very much ‘deployed’ for brands repositioning and business spin-offs (with the necessary product re-engineering of course).

But what about the “fresh pair of eyes” advantage?

As harsh as may sound, I do believe with a few exceptions is mostly lip service from committed generalists that don’t know what they are talking about…

And with that said, let’s close this post with today’s takeaways:

Today’s Key Takeaways

– Mini-me targeting helps startuppers build stuff based on facts and not assumptions

– Defining your target customer post-building the product is a car crash waiting to happen

– Market targeting (and positioning) can make or break a business

***

Ok guys, that’s all from me for today.

If you enjoyed today’s post, check out my kindle book, The Aspiring Entrepreneur Entry Strategy: A practical step-by-step guide for finding a validated, winning business idea that stays true to who you are, that is currently available at Amazon.

I hope to see you soon.

Best,

Andreas

“Winning is a habit. Unfortunately, so is losing”

-Vince Lombardi

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