Testing & Investing with Noah Kagan
When it comes to validating a business idea, there’s no one more qualified to do so than serial entrepreneur and AppSumo founder, Noah Kagan.
We recently sat down with Noah to discuss his new experimental project, an email platform named Send Fox. Below, we’ll discuss the process Noah used to validate his new business idea.
Solve your own problem
If you try to solve your own problem, you’ll stick with it longer.
Picture this: Noah sitting in his office, sending Bill Gates multiple connection requests on LinkedIn, when he gets a bill from Mailchimp for — several hundred dollars — for an email list he hasn’t used in a month! How frustrating! He immediately called Mailchimp and asked to speak to a manager for the obvious discount owed to him, since he hadn’t sent out any emails that month. Sadly, they told him there was nothing they could do and to please stop crying.
So Noah did what any other entrepreneur would do: he decided to take them down. Okay, not really, but he did come up with the idea of SendFox, which would be a less expensive alternative for his email needs.
Don’t spend any money (seriously)
Noah and his three business partners combined their powers to build a competitive email platform. And in under a month, they built a product that they felt was a good MVP (minimal viable product).
Now I know what you are thinking, “Noah’s situation is different.” He’s got a staff, he’s got a huge network, and he looks extremely good in hats.” And yes, while all of that may be true, Noah did offer some advice for those who may not have the technical skills to develop a product on their own. Warning: you may not like what he has to stay.
If you have an idea but aren’t technical, Noah recommends that you get to work on selling your idea instead of building it. Before you start to build your product or hire anyone to do so, you want to make sure that enough people are willing to pay for your product. And the only way to do that is to do the work and reach out to your network. Manually. Yes, I’m talking phone calls, coffee dates, and personalized emails.
Do the work
If you can’t get people who care about you to buy it, how can you get strangers to buy it?
Most entrepreneurs are scared to reach out to their network. They’re afraid of rejection and they don’t want to be laughed at. So what do they do instead? They try to go after a cold audience first. They buy Facebook ads, they set up a website, and grow their social media following in an attempt to AVOID telling their own network about their idea. And Noah warns entrepreneurs that this is not the way to approach it for 3 reasons.
1. You should NOT spend money until you are making money. Don’t build a website, don’t hire a branding professional, and don’t spend money on pay-per-click ads.
2. You need to move quickly. When trying to validate an idea, you should work as quickly as you can. You don’t want to spend weeks or months building out websites and social profiles for a product that you haven’t even validated yet.
3. You need real feedback. You want to reach out to the people in your network because they will be the most honest with you and give you the most valuable feedback. If they like you, they’ll want to help you and see you succeed (may want to exclude any exes from the contact list). Plus, if they aren’t interested in what you’ve got to say, you can always ask them for a referral that might be interested in your product.
While Noah was trying to validate SendFox, he went through his entire email list and found everyone who was using a competing email client. Then, he started calling all of those people to talk to them about SendFox’s value proposition. Yes, he actually got on the phone and called people! And he did this because he knows that talking to people will push him in the right direction.
Get to the right idea faster
Interestingly, he found that very few people were interested in switching to a new email platform to save a few hundred dollars (must be nice being so rich). But instead of throwing his hands up and abandoning the project, he took his conversations a step further and asked them what would make them excited about switching to a new platform?
Noah took this feedback back to his small team and they continued to tweak the platform to suit the needs of his ideal client.
You want to make sure that you are solving a problem, not spending any money while validating, doing the manual work necessary, and continuing to collect feedback from your audience to improve the product to suit their needs.
To hear where Noah is now with SendFox, we encourage you to watch the webinar! Noah even answers some audience questions at the end! Click here to watch the webinar.