Lessons from “The Minimalist Entrepreneur – How Great Founders Do More With Less.” By Sahil Lavingia
Constraints lead to Creativity.
If you are a minimalist entrepreneur the early stages of launching your business is all about constraints. You need to focus on doing one thing well and avoiding the temptation to try to do everything at once. Scope creep where a project or product launch becomes unwieldy due adding just one more feature and wouldn’t be nice if we could do this. Sahal Lavingia uses this check list to keep things manageable.
- Can I ship it in a weekend? Most prototypes of a product offering should be capable of being developed in 2 to 3 days
- Will it make my customers lives a little better?
- Is it likely a customer will be willing to pay me for this solution?
- Can I get feedback quickly?
This first product does not need to be pretty. Maybe the best example of a popular but not pretty solution is Craigslist. It’s never been pretty, but it has always worked. So not being pretty has been no obstacle to growth. An unpretty but effective solution will sell. A pretty but ineffective solution will not.
Ship early and ship often. Your business will build faster if you have a good feedback mechanism. The first solution will likely be far from perfect, so your goal is to get loss wrong as quickly as possible.
Skip the launch for now. I titled this episode getting ready to launch your first 100 customers for a purpose. Many businesses launch with a great fanfare before they are sure they have product market fit. The classic cautionary tale in this regard is Quibi a streaming video service launched by two titans of entrepreneurship Jeffery Katzenberg of Dreamworks and Meg Whitman of eBay. With 1.8 billion in funding the launch of Quibi included Superbowl ads. It was expected that customers would flock to the service. It never achieved success and shut down six months after its launch. Hold back your grand launch until you have achieved repeat customers and then celebrate that milestone.
As a solopreneur you probably feel uncomfortable selling yourself. Somehow the word sales has a sleazy connotation to it. But that’s not what you are doing here. You have developed a relationship with your community, you have a product offering that will help them, and you deserve to be rewarded for the value you bring.
Charge something, anything. Pricing is hard. At first you may be tempted to give your product away, or charge less than it costs to produce. If a venture capitalist is funding you this type of penetration pricing maybe an applicable strategy. But as a minimalist entrepreneur your first aim is profitability. There are many pricing strategies available to you but one of the simplest is cost plus. You find the cost of producing your product and then add a margin to it. Simple. The biggest negative of cost-plus pricing is that it ignores the fixed overheads that must be paid for out of your sales revenue. But as minimalist you will have kept this to a minimum. And there is nothing stopping you changing your pricing strategy as your grow. But for now, charge something. You can call you product or service a business offering unless people are willing to pay for it. I am currently reading a book called Predictably Irrational by Dan Ariely in which he describes the vast difference between free and charging. He says people will jump for something free even when it something they do not want. If you offer your product for free you will never know if people “bought” it because they saw value or whether just because it was free. You will destroy that all important feedback loop I mentioned early.
Savil suggests that your first sales targets should be family and friends. This is fine if the product or service you are offering has value to this your, inner circle. But maybe it does not. I recently worked with a colleague who was very disappointed when an employee survey asking the common question would you recommend this serviced to your family and friends returned a very low score. When he talked some of the employees he found the reason they marked the question low was that they did not have any family or friends who would have use for the service.
But you do know the community you have connected with does have a need for product, and although they care less about you than your family or friends they do care about your product. But even if they care about the product it may take time to get their attention. We humans have inertia, it takes something to get us to take action. Take advantage of the demand for content is ever growing. Look at all the news sources out there, influencers, blogs all of which need content on a regular basis. Savil recommends that you
- Make a list of everyone who has ever written about or shared information about a similar business. A product launch, a business closure, a company event. Savil calls these subject matter experts
- Contact them personally. Offer to walk them though your product, meet them at your store, offer to buy them lunch.
- Ask them for their candid feedback, your aim is to improve your product. Make it clear that you appreciate their support. Do not ask them to write articles or promote your product. If they love it enough they will, if you ask they almost certainly will not.
Savil suggest cold calling or cold emailing potential customers where you can see there is a good product market fit. Personally, I could never do a cold call, maybe I could do a cold email but if you are comfortable doing this go ahead. Savil has found this to a be a successful way of gaining clients.
Launch to celebrate. As you achieve milestones such as your first 100 customers celebrate. I can remember as a child in the mid 60’s while living in America McDonalds outlets displayed how many million hamburgers the chain had sold. Celebrating that milestone. If my memory serves me well the numbers I first saw were in the teens of millions. McDonald’s now sells 6.5 million burgers a day.
Hold that launch until you have achieved product market fit.
If appropriate, sell to your friends and family first, then to your community and finally to strangers.
Sell directly to your customers to encourage feedback and to make the process less about convincing folks to buy and more about learning how to improve your product.