Business Fundamentals : Creating Value People Want To Buy | Streamversity Academy | Skillshare

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Business Fundamentals : Creating Value People Want To Buy

teacher avatar Streamversity Academy, Experts in every field

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

26 Lessons (3h 3m)
    • 1. 00-01 Introduction

      5:31
    • 2. 00-02 About Me

      9:55
    • 3. 00-03 Why Should We Learn Business

      5:18
    • 4. 00-04 The Principles Of Business

      7:38
    • 5. 01-01 What We Are Going To Cover

      3:29
    • 6. 01-02 The Importance of Market Research

      7:34
    • 7. 01-03 Finding Profitable Business Idea

      7:38
    • 8. 01-04 The 7 Economic Drives

      9:42
    • 9. 01-05 10 Market Evaluation Scores

      8:38
    • 10. 01-06 Profit VS Passion

      6:08
    • 11. 01-07 The 11 Forms Of Value

      6:01
    • 12. 01-08 Product

      6:47
    • 13. 01-09 Service

      6:57
    • 14. 01-10 Shared Resource And Lease

      6:41
    • 15. 01-11 Subscription

      5:56
    • 16. 01-12 Resale

      6:44
    • 17. 01-13 Agency

      5:54
    • 18. 01-14 Audience Aggregation

      6:55
    • 19. 01-15 Capital

      8:23
    • 20. 01-16 How To Deal With Competition

      6:32
    • 21. 01-17 Creating Competitive Products

      8:59
    • 22. 01-18 Unique Selling Proposition

      7:20
    • 23. 01-19 Prototyping

      5:29
    • 24. 01-20 Iterative Design

      8:06
    • 25. 01-21 Customer Feedback

      6:38
    • 26. 01-22 Pre-sell Testing

      8:28
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About This Class

What we are going to cover.

In this course I want to share the things that I’ve learned the hard way from almost 2 decades of running different types of businesses, combined with the things that I’ve learned academically from university and from many other sources.

Just for a quick summary of what we’re going to cover in this course. If we look at business from a macro overview. Every business in the world, whether it is a large business or a small business. They all have to do these 5 things:

  • Creating values
  • Marketing
  • Making sales
  • Delivering the values
  • Managing finance.

If just one of these missing, then it is not a business. If you take a master degree in business or read any book about business. Every skill or topic you learned will fall into one of these 5 categories. I call these “the 5 pillars of business”. If you can understand the principals behind these 5 pillars of business, then you should understand how every business in the world work. Is like you are Superman looking at a building with your x-ray vision. You’ll able to see the little pieces that make up the building, like: the steel beams, the woods, the bricks, the bolts, etc.

In this course we’ll be focusing on the first pillar of business which is value creation. We will cover topics like: market research, how to find profitable business ideas, the inner forces that drive human to purchase stuffs and how to evaluate whether a market is good or not. Next, we’re going to discuss different “forms of values”. What “values” mean, are things that we can create and people actually want to purchase. Then we’re going to discuss how to deal with competition and how to win that competition. We will also going discuss the workflow of product development iteration from prototyping to getting customer feedback early using various approaches.

Who is this course for?

This course is important for anyone whose life is affected by business in any form. Whether you want to start your own business, or you are responsible to lead a business, or perhaps you work inside a business or maybe you sell something to businesses. If you are in any of these conditions, then I strongly suggest that you take this course. Because understanding how business works is the best way, if not the only way, for us to make better decision related to business.

So, if business is your thing, join the course now and I’ll see you on the other side!

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Streamversity Academy

Experts in every field

Teacher

Hello, we're Streamversity. We're a team of dedicated experts committed to aid humanitarian cause which is giving foods to poor people in Indonesian regions.

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Transcripts

1. 00-01 Introduction: Salam aleikum. My name is we D Ma takin from stream varsity. I am an entrepreneur, er and also on academic lecturer in business management and creative industry. I started my first company when I was 22 years old. It was right after I got my degree in computer science. At that time, I didn't have any formal education in business yet, but I was confident enough to start a new company with funding from sufferer investors. I thought Business is simple to run and easy to manage. I was wrong after two years running the company, it went bankrupt, but I didn't give up. Just a few months after it, I started another company again with funding from an angel investor. But the same thing happened again. After two years, the company went bankrupt. I was depressed at that time. As it seems, my life is just running in place. I learned my lesson that just having a passion and a resilient to never give up it's not enough to build a successful business. If we want to do things correctly, then we need to have the knowledge for it first. This is true for everything, including business So I went back to the university to take master degree in business management and read a lot of books about business, and I'm glad I made those decisions. I learned things that I wish I knew when I first started my business. All this time I've been making mistakes upon mistakes. We don't even realizing it Now. Alhamdulillah, I have found my success. I own suffer or businesses that can already run by themselves. No, I am not a millionaire or winner off the best See off the your contests or anything like that. For me, success is about how you live your life. By owning this out or running businesses, I can earn more than enough money to support my family without having toe work from 9 to 5 , like most people do. I live a wealthy life, but what is more important, I can be together with my family almost 24 hours a day, and this, for me is just priceless. In this course, I want to share the things that I have learned the hard way from almost two decades off, running different types off businesses, combined with the things that I have learned academically from university and from many other sources just for a quick summary off. What we're going toe cover any scars. If we look at business from a macro, overview every business in the world, whether it is a large business or a small business, they all have to do this five things. Creating values, marketing, making sales, delivering the values and managing finance. If just one off this missing, then it is not a business. If you take a master degree in business or read any book about business, every skill or topic you learned well fall into one of these five categories. I call these the Five Pillars off Business. If you can understand the principles behind these five pillars off business, then usual understand how every business in the world work. It's like you are Superman. Looking at a building with your X ray vision, you'll be able to see the little pieces that make up the building like the steel beams, the woods, the bricks, the Balts, etcetera. In this course, we will be focusing on the first pillar off business, which is a value creation. We will cover topics like market research, how to find profitable business ideas, the inner forces that drive human to purchase stuffs and how to evaluate whether a market is good or not. Next, we're going to discuss different forms or values. What values mean are things that we can create and people actually want to purchase. Then we are going to discuss how to deal with competition and how to win that competition. We will also going to discuss the workflow off product development iteration from prototyping toe getting customer feedback early using various approaches. This course is important for anyone whose life is affected by business in any form, whether you want to start your own business or you are responsible to lead a business. Or perhaps you work inside a business. Or maybe you sell something toe businesses. If you are in any off these conditions, then I strongly suggest that you take this course because understanding how business works is the best way, if not the only way for us to make better decisions related to business. So if business is your thing during the course now and I'll see you on the other side 2. 00-02 About Me: in this video. I'm supposed to talk about myself so you guys can get to know me better. Honestly, I hate talking about myself, like talking about my success or even talking about how great I am. Because the truth is I'm nobody. Okay? Essentially, I want this car's Toby about you giving values to you, not pitching about myself or any off my cos I'm not going to do that. But because we still need at least one session where I introduce myself. Therefore, I just put together all of the things I need to share about me in this one lesson. After these, there will be no more about me. Lesson. Okay, so my name is William Attack in. I am a native Internation living in Bakassi, which is a city in eastern side off Jakarta. I am 40 years old when I recorded video. I have a family, a wife and four kids. The first company I found it was back in the year 2000. At that time I was just graduated from the university after earning my bachelor degree. At that time, I was 22 years old. So yes has become a CEO in a very young age. I didn't have any experience running any companies before. I never started business before, whether in formal education or in higher academy clef or in the university. I was majoring in computer science and specialized in software. The Flagman. So my bachelor degree is actually in computer, not in business. And yet, Alhamdulillah, I am able to pitch my business plan toe three big investors to fund my business. And no, these three investors are not my family or anything like that. They are high profile entrepreneurs that I just met the full months before in the first year my company take off. We made a lot of money. I had six employees At that time. We had great looking office space in a skyscraper building in Jakarta. But things get more difficult in the second year, and at the end, off the second year, I decided to actually the company, our founder and literally just give away all of my shares to the investors. I did that because I'm not performing well and just lost the passion to continue running the company several months after that. In the same year I created number business plan and found on Angel Investor to start a new company. I had only for employees back then and a smaller office space compared to what I had before , and the same story happened again. In the first year, everything went smooth, but in the second year, the company performance just went down. The here there are too many problems that I must face and also pressures from every direction. So then, just like before, I decided to lift the company and give all of my shares to my investor. So after four years graduated from the university, I just found it to companies and failed two times, and I was broke. I had almost no money. I was 26 years old at that time and already had a wife. Moreover, I was waiting for my firstborn, so I did what every responsible men will do. I try anything that I can do to make ends meet. I sell stuffs like books. If Edie's etcetera, I start teaching computer graphics and design related skills, insufferable non formal schools and on international college. I did a lot of freelancing works on through the animation multimedia game, the flop Hman, etcetera. Ah, Ha Mula. Eventually, my freelancing business got me to learn architectural through Auto D deck because apparently a lot of people like my design. Although I don't have any formal education in architectural, I had more and more clients in the architecture industry, which led me to start thinking about building my own firm in the architectural industry. But who will believe in Architectural Firm, founded by a non architect. So I teamed up with a friend of mine who is an actual architect with formal architectural education. We both founded the firm with just bootstrapping. We don't use any money from any investors. Well, this is because it is just a firm. It is essentially a surface based company, So all we need, besides our skills, are this computers we don't even need on office space. That's mostly We work remotely at our own home and do everything online. Ah, Hamdullah. The company grew from just the two of us, toe having more and more employees and eventually a nice looking office. We've been doing works ever since, from large property developer companies in Indonesia and also from clients all across the globe. We have clients from Dubai, Shanghai Australia, Malaysia, United States, Lee Barrier and so much more. In 2000 and nine, I decided to go back to school and take a master degree. I studied business management and system information at the same time, mostly in system information field. There are anything really new for me as I started computer science before, but in business and management field there are so many ah ha moments. When I was learning them, I learned things that I wish I knew early. When I started my 1st 2 companies, learning about business become my passion. I read dozens off books about business essentially I both and read almost all bestselling books about business. After graduated and earn my master degree, I was full with passion and loaded with so many new knowledge about business. I eagerly started suffer more companies. I started a company in publishing, then in educational field. Then I started a new company in horse seller and imports, also in several other fields. Currently, the income from my business is can go up to $10,000 in a day. Well, most off the time. It is lower than that number. Okay, Now you might be thinking that I am a filthy, rich person. Honestly, I am not. I am not a billionaire or anything like that. Because there is a big difference between income and profit. The $10,000 number in a day is an income, not profit. Again, I'm just like any typical entrepreneurs who struggle day by day to keep their companies running. What makes me different, though, from most people is that I have freedom. Okay, I get to choose when I want to work, who I want to work with and how I do the work, etcetera. When most people go shopping with their family only in weekends or holidays, I go shopping in Monday or Tuesday or in any work days I choose. And while most sea or walks in a nice week office, I used to work from home, utilizing online tools. I built an office just beside my house in which my wife or my kids can go in an hour s day , please. So practically, I am always with my family almost 24 hours a day. I get to see my kids born and growing up and always be there when my family need me I have systems that generate passive incomes. So even if I decided to play around all day, seven days, a week, like the whole time, I'm not working at all. I'm still making money, but believe it or not, currently I am working for a non profit organization because I want to. I knew Toe found her very well and resonate with his vision. The organization are giving foods to orphans, old widows and people who are in needs. I decided to help their course because it is something I want to do in my life helping other people. Now you need to understand that if you follow all off the lessons in its course, there is no guarantee that you will be successful. Hey, I even never consider myself successful, only a lock and guarantee your success. Me? I am not God. I'm just a simple human like you. If we talk about success well, the definition off success is a very subjective Some people think that having lots off money is success. Other things. Owning a Tesla car is success some off. My friends think that having for wife's is success. Other things, having freedom and time is success and for some other people, including me, because off my belief as a Muslim success only happens in the after life in this world. There is only hard works upon hard works. You just need to enjoy the process. So again, because off this reasons, I cannot guarantee you any success. What I can guarantee in Shallow is that the knowledge you gain in his course will be very, very beneficial for you in your journey to become a better entrepreneur or a better C o. I am here to share my knowledge, my expertise, my experience on running businesses for almost two decades. That is all from me. Let's move on to the next lesson. 3. 00-03 Why Should We Learn Business: Why should we learn about business? Some people believe that you don't actually need to learn business. You just need to jump into it and learn about business from trial and error, just like we learn how to swim. Some people also think inside a box called the job category. They say stuff like, Hey, I don't need to learn business because I'm a designer or I don't need to learn business because I'm a doctor or programmer for teacher or whatever. Essentially, these people think that learning business is just always off time. Well, here are my answers for these people. First human have been doing business since thousands off years ago. So if you ever face a problem in your business, most likely other people already facing the same problem before and already came up with some kind of solution, all of this accumulation off people's experiences and knowledge are documented inside a sheer amount off books about business. If you shut yourself from this knowledge and just go straight jumping to any business that your gut feeling tells you, yes, you may end up being success, but the course off, try and error along the way will be very costly compared if you already knew the pitfalls way before. I mean, why do you need Tofail? If other people before can and already fail for you, you just need to take the fruits the result off their trial and error process. And if you compare business with swimming, it is through that you can only learn to swim if you jump into the water. But I just want you to be aware that there are people died drowning when trying to swim and still with swimming ethnology. If you can pick which off, these two scenarios, you think is best for you first. Learning to swim by yourself without an instructor are learning to swim with a professional coach who often train athletes off course. You will pick learning to swim with the professional coach because he can guide you the correct way to do stretching and warming up. How to kick your legs efficiently. How to breathe correctly, etcetera. It is much safer and faster to learn how to swim this way. Essentially, my point is we should never underestimate the knowledge, because inside this knowledge are the experiences off a lot of people. A lot of experts who have undergone all of the trials and errors before we do before we even exist in this world. Okay, next, you may think that your job or your category has nothing to do with business. Well, trust me, every job category in the world has something to do it business. A doctor, for example, is working for a hospital, and the hospital is business. A lecturer is working for the university, and, believe it or not, university is a business. Also even, let's say, if you are working in the public field, such as the government, well, we all know that the government needs to regulate business practices right. They need to collect taxes from different type of companies, etcetera. Now imagine if the people inside the government do not understand business. How can it perform well as it is supposed to be? So my point is, business is everywhere. Okay, if you drive around with your car, you will see businesses after businesses along the side. Off the road, you walk into a convenience store. That store is a business, even if you are at home browsing the Internet. The Internet company is a business and when you purchase online. That online store is also a business. After you order, the product will be delivered by a business also. Okay, So again, business is everywhere and you cannot escape from it. Unless perhaps you are Tarzan who lives in the middle of a jungle with a gorilla community who never use money. Moreover, Cryptocurrency well, you get my point. And one less important thing I need to mention here about business knowledge is that if you are working inside a corporation, the more you understand the business process off the company, the more valuable you are to the company and the more chances you will have climbing up the corporate ladder. Okay, so this is something that you need to keep in mind to summarize this lesson. Learning business is important for anyone who wants to be better at his job. Entrepreneurs need to know how business works because they built one. CEOs need to learn about business because they lead one. Freelancers need to know about business because their clients are mostly businesses. And even if you are just on employees, understanding business is a requirement for you to climb up the corporate ladder. 4. 00-04 The Principles Of Business: before we jump into the curriculum, I want you to step back and think about all off the knowledge you have learned in your life . Every knowledge in this world in any field can be divided into three laugh falls. The first level is the principles. The second level is the methods and the less one is the hex, we can describe their correlation to each other with this pyramid. The principles are the most basic yet the most important level off knowledge because the other pipe off knowledge sit on top of it. If this is a really building taking all the principles, it's like destroying the foundation. The building will break and crumbling down. The second level of knowledge is methods. It is the how toe part off the knowledge. This level of knowledge is more dynamic and more subjective. More dynamic means that the methods off doing things are evolving over time and subjective means that different people may have different way off solving the same problem. Okay, the less level off knowledge is hex. This kind off knowledge is known to be very specific to a certain problem and has a very short life. Swen, they are mostly experimental and inventor to outsmart existing systems. Okay, now what we're going to learn in this course are at the principal's level, not methods, not hex, because we are talking at the principle. Therefore, what we're going to cover in this course are applicable to any business in the world. I'm in any type off business, not just my businesses or someone else's businesses. Eventually, yes, we'll discuss some off the methods or even hacks just for the sake off, giving real world examples off the principles that we are discussing. But at the core, we are learning the principles off business, lowering the principles off business is surgeon, and you should learn about them before you learn anything else about business. Why there are at least two reasons for this. First, by knowing the principles, you will have a deep understanding about that matter. Therefore, you will look into things differently. It's like you are Superman looking at a building with your X ray vision. You can see all off the brakes, steel beams, wooden planks, bolts, nails basically all off the bits and pieces that make up the building, while common people only able to see the building, as is from the outside. By understanding the principles off business, you will have a strong insight off how business works, the inner parts off it and what makes it takes. Inshallah, After taking this course, you will not be confused anymore when reading articles about business or watching business experts talking about stuffs. With so many business Jagan's the second reason why learning the principles is great. It is because by knowing the principles, you can actually create your own methods and hacks. If you learn straight to the methods off doing things without a strong foundation on the principle fo you won't be able to see the big picture off it, you will stop with that method and unable to evolve. Every business in the world will do. These five things from the smallest business entities to large multinational corporations should have these five pillars off business. If just one off this pillars is missing from a thing, then that thing is not a business. And if you go to business school taking MBA program, for example, all that you will learn in that school will be these five pillars each course that you take in that business school will fall to anyone off these five pillars or categories, so let's quickly discuss each off them. One by one, force is creation or, in other words, value creation. Basically, value creation is the process off, discovering what people need or want and then go creating it. Every business in the world create some form off value or solution. For example, Apple and Samsung create gauge. It's McDonald's. Create burgers. Toyota create cars. You get the idea. Next. It's marketing. Now a lot of people confuse between marketing and sales. They are actually very different. Essentially, marketing is the process off. Attracting people's attention and building demands off what you have created in the creation process. Just imagine that you just created an awesome and sophisticated product that can solve a lot of people's problem. But nobody knows that this product even exists. It just said they're in your office. Are you going to have a business this way off? Course not. You need to make people aware off your product. This is what marketing is all about, creating large scale attention and awareness. Several examples off what marketing people do are copyrighting placing online advertisements on Edwards and Facebook ads are on more conventional medium, such as magazines, TV's radio's etcetera. All of these are marketing jobs. Next is sales. Okay, so you have a great product, and with marketing efforts, you make the whole world know about your product. But if nobody actually opened their wallet and give you the money to buy your product, then you don't have a business. Essentially, cells is a negotiation process to convince people to buy your product. So again, cells is different from marketing. In their simplest form, marketing is a public communication process. While sales is a negotiation process, the next biller off business is delivery or so called value delivery. After a customer purchase your product, you don't need to deliver that product with them, right? So essentially value delivery is a process off, giving your customer the value that you have promised and making sure that they are satisfied. Okay, if someone sell you something and then you pay for it. But then the product never delivered to you. Do you call that a business? Of course not. That is a scam, not a business. And of course, you are here now to learn about business, right? Not learning how to scam other people. Finally, the last pillar off business is finance. Essentially, finance is the process off managing the money in your business. The finance job is to analyze all off the four processes before from value creation, marketing, sales and value delivery so that we can answer two biggest questions in business force. Is this business bringing enough money to keep going? And second, is this business profitable? Okay, guys. So these are the five pillars off business in this course. We will be focusing on the first pillar off business, which is a value creation. 5. 01-01 What We Are Going To Cover: in this section, we're going toe coffer, the for spiller off business. And that will be the value creation, as we discussed earlier. Value creation is the process off discovering what people need or want and then go creating it. Every business in the world create some form off value or a solution. Now the value creation is a very large topic, but we can break it down into four remains our processes. The first process is market evaluation in this step. Basically, we want to make sure there is an actual market for the product or the value we are going to create. What I mean about market is that there are actually people out there willing to pay for that product. Now. This is a very important process. But believe it or not, not many entrepreneurs actually doing it. Mostly they just go creating the product solely based on their gut feeling. Only then later figuring out where and how are they going to sell it. This is a very bad practice. Of course. There are special, rare cases where recent aerial could work, but mostly they will fail and lost a lot of money by pulling that stun. We'll discuss about this more in depth later, next, after we are sure that there is actually a market for what we are going to create. The next step is to determine in what form that value will be created. There are at least 11 forms that we can utilize totally for our values to the customers. Well, missed us about this more in depth later. Next, after we know that the market exists and we know how our value will take form, the next step is to start thinking about the competition. Let's face it, we are not alone in this world. If you have a good business idea, most likely other people already have the same idea. Or let's say your idea is super fresh. There is no products such as yours exists before in the world. If your product happens to be booming in a market, other people we start coming in and try to jump onto your wagon. What I mean by that more entrepreneurs will try to imitate your product, hoping to get the same success as yours so suddenly. Now you have a competition. So no matter what the scenario is designing your product to be competitive in the market is very important. OK, more about this later. The last step off value creation is product testing. This is the process where we create the prototype off our product and then ask real customers or users to actually use the product. This is important to get early fit back and to refine the product before it making its way to mess production because Miss production costs a lot of money. So before we do that, we need to evaluate whether the product is working as we expect it or not. If not, we need to know what needs to be changed or improved. This product testing is an integration process. The more we trade, the better or product will be. When we launch it, we're going to discuss about this more in depth. Later. In the next lesson, we're going to start discussing the first sub process off value creation and that will be the market evaluation 6. 01-02 The Importance of Market Research: in this lesson video. We're going to cover the importance off market research just to point out where we are now . We are in the fourth chapter discussing the first pillar off business, which is creation, and we are in the subject, er off market evaluation. Okay, Market existence is the prerequisite off any business in the world. Please remember this always. There is no super product. Nora, super team that can replace a bad market market that don't exist don't care how great your product is. Market that don't exist don't care about how smart you are. I call this the cruel reality off market because it is cruel and unforgiving. Believe it or not, this is the biggest barrier off any entrepreneurs to start and running a successful business. It is also the biggest nightmare any entrepreneur can have in running their business. You can imagine that you spend months or even years creating the perfect product beside you . Pour in millions off dollar into making this thing exists. But then after you must produce this product, it is radio silence. No one interested on buying it. I know that this is a very, very bad thing because it happened to me before. So that is why knowing whether there is a market for your product is super important before you start creating them. And you shouldn't let anyone tell you the opposite, because there are some 70 entrepreneurs out there who make very dangerous statements that influence people to follow blind strategy off having no market research at all. For example, Steve Jobs once said that Apple as a company never did any market research. Hiss famous quote ISS. Our job is to figure out what they are going toe want before they do. People don't know what they want until you show it to them. Henry, four, also mentioned about his dislike on market research. He said, If I had US customers what they wanted, they would have told me a faster horse. Now I don't deny that they are both great entrepreneurs, but I have to disagree with their sentiment on market research. Why? Well, I understand why Steve Jobs or Henry Ford don't want or don't need any market research because their companies are creating products and innovations that never exists before, So it's kind of hard to do market research when you ask people something that they never knew or even experienced before. But you need to know that both Apple and four, and actually many other big companies like Microsoft, Sunny Samsung and Google etcetera, who create cutting edge products have made flops after flops in their history. Apple, for example, developed the first personal computer with a graphical interface called Lisa EPO. Release it in January 1983 with a crazy price tag off around $10,000. At the time, Lisa sells never make up with its development costs off, hoping $150 million which is equals toe $600 million in today's economy. In 2018 they tried several times, improving the product and even changed its name to making Tosh Excel. But Lisa always consider to be one off the airports. Biggest failures. Four has done a lot of failures. Also, for example, for investor $400 million into a car named at so, which was released back in 1957. There is a lot of money which is equals toe $2.4 billion in 2018. Unfortunately, the market wanted different thing. They actually need smaller, more economic vehicles and eso was not the answer to their needs. Apple and Ford learned their lessons, and I hope we can learn from their mistakes. Also, because the reality is most off us. Entrepreneurs do not create cutting edge technologies or innovations. Most off us create something that are already exists before, and moreover, we don't have millions or even billions off dollars to compensate our mistakes. My point is we should always do a proper market. Research have done this mistake the four and it was just terrible have spend more than a year developing a product based only on my gut feeling. Spend a lot of money for a paying them in power production costs and not to mention the marketing costs. But at the end, it is a flop. I thought my product is brilliant, but unfortunately nobody wants it. So it is very easy to get excited about something. But just because you are excited about it, there is no guarantee that other people will get excited. Also, because you are not your market, I repeat, you are not your market, okay, and believe me, you really don't want to be in my shoes and I don't want you to experience the same mistake decided before I learned my lessons and Alhamdulillah. Since then, my next products are always have good sales. Some off them even become best sellers in their category. It is because I need my homework off researching the market first before creating any product. Now I decide things based on data, not feelings nor personal excitement. So to sum up this lesson essentially, when you want to start a new business, you are in this some kind off crossroad whether you create cutting edge product that never exists before you venture out to this unknown jungle and if you succeed, you will be known as the pioneer in that new industry. But it is very risky because it is hard to evaluate the market. Are you just the second path, which is basically you go out looking for a hungry market and figuring out how to serve them. Now, in this path, you may end up creating a new kind off product also, but it is all based on existing demand. My advice to you is to always choose the second path. Okay, well, unless you have billions off dollars toe compensate your Fincher like apple or four. Basically, the ideal condition that you are looking for is that you have this hungry market who eagerly want to pull the product out from your company instead off you creating something and later try to push it out. I want to say this last quote before we wrap up this lesson. Your market is your limiting factor. Why? Because your business can never grow beyond its market. I repeat, your business can never grow beyond its market. Okay, guys, in the next lessons, we're going to dive into market evaluation, more in depth. 7. 01-03 Finding Profitable Business Idea: in this lesson video. We're going to cover the process off finding profitable business ideas as a reminder off where we are now in a curriculum. We are in the fourth chapter discussing the for spiller off business, which is value creation, and we are still in a sub chapter off market evaluation. Okay, so we learned before the importance off conducting market research. But how do we actually conduct market research? Well, this question is actually a method question. There are a lot of ways to conduct market research, but first we need to define the market research types into three different stages because each stage has different market research methods before stage is when we conduct market research before the product is developed. I called his preliminary market research. It is also reform as chris ability study or in other names or methods. The second stage is where the product is being developed. The market research in his stage are mostly known as prototyping and usability testing. The last stage off market research is when the product is already launched on the market and people are already using them. The market research in this stage can have different names and methods. It can be conventional consumer feedback using surveys and questionnaires, or it can be in more automatic ways in a form off data collection and processing, also known as Data Analytics. So, as you can see, there are different kinds off methods and names for market research for now. Because we are in value creation chapter, where we don't have any product yet, we're going to focus only on a four stage or preliminary market research. Essentially, the core activity in preliminary market research is asking questions to the prospect target market or observation so we can understand them better. It can be in a form off interviews, surveys, focus group and questionnaires, etcetera. If you're too busy to conduct the research yourself and you have budget for these, there are actually many companies provide marketing research surfaces. Mostly, they are very professional and really know how to do correct status. Lee calculations. Okay, so we can conduct market research in many ways. But what is it that we should be looking for in later lessons? We're going to discuss more in depth about different parameters and values inside the market research process. But for now, let's start with a very simple concept that you can grasp and find a profitable business idea fast When starting out of business. There is one important thing that you need to look, and that will be problems. Yes, that is right. If you want to find profit easily, you need to find people's problems. Remember this concept Always problem equals to opportunity. Now you might be asking, How can problem equals toe opportunity? Well, just think about it. Most people are willing to pay for something that is too complicated for them to do it themselves. Or it may be too hard for them, too. Time consuming, toe warring. Too painful, etcetera. All of these things are categorized as problems for them, and as an entrepreneur, when you find these problems, you actually have found your gold mines because you can create product to solve its problems and people will pay for it and even thanking you for solving their problems. Although said in the Koran for NMR, also use run in them are also used rotten. Now I understand that not all off you are Muslim, but I believe that the wisdom in this first is uniforms, so regardless off what religion you have. So the translation off this first in English is more or less like these, for indeed, with difficulty is indeed with difficulty. Is the world Marin here means with or coming together in one bundle? Not after so although stated that in every difficulty there is an ease within it, although even repeated again to reinforce the meaning that it is truly in every difficulty , there is an ease within it. So that is why I believe we, as entrepreneurs should have this positive thinking or positive attitude towards facing problems in our life when other people can only complain, or yelling or even coursing towards different problems they face. Entrepreneurs are smiling because they see the opportunity behind the problems. They have this mindset off helping other people solving their problems. Okay, the bigger the problem and the more people affected by the problem, then the bigger the opportunity will be. This positive thinking is something that you need to have if you want to be a successful entrepreneur. There are many, many great examples about the subject. For example, a guy named Matthew Osborne created a successful business from a very simple problem in his neighborhood, and the problem is dark pool. Can you imagine building multi millions dollar business out off Baku's? Well, neither do I. The story goes like this in his neighborhood in 15 miles radius. There are more than 100,000 pat dogs, and these dogs drop pools literally everywhere. Off course. This is a big problem for his neighborhood, but for him, this is an opportunity. Instead, off the yelling and cursing. When stepping on this dark pools, Matthew Osborne decided to start a new company providing Dopo cleaning up surfaces, and his company skyrocketed from the initial suffer or customers to more than 3000 customers. Thomas offer eighties and one said, which become one office famous quote. I find out what the world needs. Then I go ahead and invented. We all know how successful he is. Despite off his many mental constraints, his inventions not only make him rich, but also help a lot of people in the world to have better quality off life. And guess what he started from the market. He is looking for the problem first, and then go, creating the solution, not the other way around. Another famous court from Paul Marston. He is a very famous British writer and businessmen and also politician, he said. Business is all about solving people's problems at the prophet again. The focus here is the market. How can we help other people by solving their problems? And at the end, profits will follow eventually. Okay, guys, To sum up this lesson, you can go out searching for business ideas. But we are not here just to find business ideas. What we really want to find is profitable business ideas and the easiest way to find profitable business idea is to find other people's problems. Their pains, they're hassles, their fears, their needs. The bigger the problem that you saw, the bigger business, you can build upon it, inshallah. 8. 01-04 The 7 Economic Drives: in this less and video, we're going to call for the seven economic drives as a reminder off where we are now in curriculum. We are in the fourth chapter discussing the first pillar off business, which is value creation, and we are still in a sub chapter off market evaluation. Okay, so what is exactly the Seffrin economic drives? Essentially, they are the factors that drive humans to conduct economic activities. In the previous lesson, we learned that people are willing to pay money to have their problems off. That is why creating product. That soft problem will ensure that the product has great market potential, although this is important. But this is a very basic because if we elaborate more into the buyers psychology, there are many factors that drive people to purchase something or to do other economic activities. Knowing this factors is important. Why? Because our product may not be able to solve a great deal off people problems. So we still need to think on how to add more values to the product, or maybe our product and soft great problem. But apparently there are other products in the market that can solve the same problem. So again, you still need to think about adding more values for differentiated from the other solutions. And the way to do that is by understanding and using the seven economic drives. Okay, so there are seven economic drives and I arrange them in alphabetical order. A, B, C, D, E e f and G A is for acquire. B is for born C is for comfort. Deace for defend is for education. F is for feel and G is for godly notice. We are not talking about pricing yet at the stage. We are purely talking about the inner driving forces, things that motivate humans from inside to make economic decision. Let's discuss each off them. One by one, forces A for a choir. Essentially, a choir is the basic human instinct toe own or to possess something, or to collect something or to consume something. Usually every normal human being showed a tendency off having this ownership drive since the age off two or three years old. At this stage, Children usually already aware that they have belongings and that other people around them also have belongings. People have a drive to acquire both tangible and intangible things tangible means some things that can be seen and touch, like food, vehicle, shelter or money. Etcetera in danger will means things that don't have any physical form such as status, power, influence, fame, a spectrum. Next is be for born. We humans are social creatures. We need tohave relationship with other humans. We need tohave wife or husband. We also want to have Children. We have this deep necessity to belong to a family, to love and to be loved. Other than that, we also need non personal relationship, such as working relationship or any other common friendship. We like to be part off a group or larger community or organization. Therefore being alone, it's like living in a prison because being alone is a torture by itself. That is why people buy smartphones and use emails and use Facebook and you setting up or any other means to get connected with other people. Some people even get so anxious when they realize they lift their phone at home more anxious than when they leave their wallet Next, a C for comfort or convenient show mentioned earlier. Humans are always looking for ways to comfort themselves. When we are already in a comfort zone. We will try to stick in that zone and refuse to move away. We all hate complicated, heart boring, painful and time consuming things in our life. We perceive all of these inconvenience as problems. For example, why do we go to Barbara Shop? Why can we just cut our own hair? Because it is just too complicated to do it ourselves, right? We have discussed this concept in depth in the previous lesson, so let's move on to the next economic drive. Next is D for defend. We have a basic drive to defend what we have from external threat. Why? Well, essentially, this is because we hate to listings. We even hate the potential off losing things. So that is why people have this huge drive to defend their belongings. We buy locks, alarms, security camera. We hire guards, etcetera, and not only for tangible things. We also purchased a non tangible products, such as antivirus software firewalls as Petra. Essentially, all of the things that we buy to secure ourselves and our belongings fall into this defend Dr Category. Next is E for education. In other words, the drive to learn new stuff to know and to understand more about the world. Humans are curious creatures. Each off us has some areas off interest and specialization that we want to learn more in depth. When our hunger off knowledge is satisfied by learning new things, it gives us a certain rewarding pleasure. That is why people buy books. We also go to school or college. We have Internet to search information. We also pay a lot of money to travel to different countries, to see new places and learn about other cultures. Next East F. Porterfield It is funny to realize that we as human loves emotional experience. This drive for sensory experience is all rooted in ourselves so deep that we are willing to pay just to feel something. Just think about it. Why do people pay money for a roller coaster ride or go to theater toward horror movies or watch comedy shows? These things are the proofs that just the desire to feel an emotion is a very strong economic drive. Finally, the less one is G for godly. This drive is actually more suitable to be called faith, but because we already have F for feel that is why I use a G for godly instead. This is so we can memorize them much easier. Essentially, this drive is everything to do with people's faith or religion. Or are there principles off life? For example, Muslims around the world all yearned to go to Mecca to perform hajj or umrah, even if they need to pay from around $2000 to $15,000 to get there. Are they doing it because other drives such as acquire or born or feel or anything else? No, none off that it is purely because off the faith, because they want to worship Ah, law. This also true for other religion. And sometimes it's not always about religion. Some people spend years deep in the jungle helping endangered animals or went through hazards and dangers. This to send foods to the needs. They are doing these because they believe that these are the right things to do. Their source are compelled to these calls. Okay, guys. So those are the seven economic drives. There are at least two ways that we can make use off these economic drives force. We can use these as a checklist when designing our product or solution. Because these drives can be layer, the more economic drives your product has, the more appealing your offer will be. Just for simple example. Let's say you sell T shirt. If you just sell plane or a blank T shirt, you only make use the acquired drive and perhaps just the comfort drive. What we can add born drive to our product by creating T shirt design with a big tax mommy and another one day D and another one brother sister, baby, etcetera. So now, instead, off buying one a customer with a family, me by all off these T shirts as a bundle. Or perhaps we can make use the educational drive. We can design small T shirt for pre school Children that has a complete alphabet on it. Okay, the second method that we can make use off these economic drives is to find new markets. Why? Well, just think about it. The seven economic drives actually answer the question. What do people want? So whenever a group off people have unmet need in one or more off this seven fundamental areas, the market will appear. There are many examples off these, in fact, almost all successful businesses are based on this concept, so just pay attention to the seven economic drives whenever you go and you should be able to see the hidden markets hungry for solutions. 9. 01-05 10 Market Evaluation Scores: in this lesson video. We're going to call for the 10 scores off market evaluation as a reminder off where we are now in a curriculum. We are in the fourth chapter discussing the for spiller off business, which is value creation, and we are still in the sub chapter off market evaluation. Okay, so after we found several markets that we want to work on, and we also already decided on what kind off offers we want to create for each off those markets, complete with the economic drives we want to use. Essentially, we now have some options whether we go with the A product or be product or other alternative product plans. This is where the 10 scores off market evaluation come in handy. Basically, it is just a tool that you can use to measure and to compare different markets and business ideas to make sure that you pick the best one for your investment. You can use your own measurement scale, but usually I just rated on a scale from 0 to 10 where zero value is the absolute war scenario it could possibly be, and then is the best scenario. It could possibly be now all off. These can be subjective if you don't use any data from research. So you can think off these 10 scores as a guidance for you to conduct market research. Even if you don't have big budget or any budget at all for research, I still strongly suggest that you at least do a personal Internet based research to back up the scoring input process. In this way, these 10 scores can actually help you toe objectively determine whether a business idea is good or not. Okay, so the first scoring is the urgency or, in other words, the urgency off need meaning? How badly do people want this? If people really don't want this at all, then it is zero. If people are absolutely desperate for these and we'll pay for it or want to get it as soon as it is possibly available, then it is a 10 OK, second is size or, in other words, the market size, and that is how many people are actually exist in this market. If there are no people in this market or perhaps just couple off people, then you might want to read this as zero. But if there are millions or even hundreds off millions who want or need your offer, you can score these s 10. Essentially the larger the size off the market, the more attractive the market is. Okay. Next is pricing or pricing potential to be exact? Basically, this score. Answer the question. What is the highest price people willing to pay you for this? So if you're building a business where people only willing to pay a couple off sense for it , it is probably not that attractive, and you can rate it zero. But if you're building something that people will be willing to pay like thousands off dollars for it, then you can read it then. So typically, the higher you can put price on it, the more attractive it is. The fourth scoring is the acquisition or, in other words, because off customer acquisition, we will discuss about customer acquisition in finance section later on. But just electing simple. Basically, when a business tried to get customers, they spend money on marketing efforts. Now we can actually calculate how much is the actual costs for customer by dividing the total marketing courses, with the number off new customers coming in. If the cost is high, it means we need to read this acquisition score low. If the course off customer acquisition is low, then we need to score this high because it means it is easier to get new customers. Next is delivery or, in other words, the course off value delivery, meaning How much does it cost to deliver the product to your customer? If it doesn't cost too much to do that, that's pretty attractive. You can give it 10 for the score, but if it costs a lot like thousands off dollars just to deliver the product, this is a very unattractive business, and you can give it zero for the score. The next core is the uniqueness. This core describe how unique your solution is against other solutions in that market. If, for example, you are the only one in this world offering the solution that other people need, there is a pretty good position to be in. You can give it 10 for the score, but if there are thousands or millions off other people providing exactly the same thing that you are offering, that's a bad thing. You can give it zero for the score. Next, a speed or, in other words, the speed to market meaning. How much time is it going to take you to fulfill the market needs? If you stop now, the shorter the time, the better. So, for example, if you can have something up and selling within a day or in just a couple off hours, that's awesome. That will be 10 for the score, but if it will take you day kids to do these, that's very bad. For this scenario, you can have zero for the score. The next score is investment or, in other words, the course off up front investment, meaning how much money you need to provide before you can stop selling something courses like building the factory or buying the production tools. Also, the money needed to buy the raw materials etcetera are all categorized as the investment scoring. The lower the upfront investment, the more attractive to business is so you can give it a high score and the higher the upfront investment, the less attractive that business is, so you can give it a low score. OK, next is Upsell or, in other words, absolute potential, the meaning off Upsell is basically other related products that usually bought after the purchase off the initial product. Hi upside potential means that we can create many additional products around the main product. If the potential is high, it earns a high score. But if the potential is low, then it only deserve close quarter. Okay, finally, the less core is effort green for the effort. Going potential. What I mean by this is how long this product will be relevant to the market on African product is a product that doesn't need to be updated frequently as it stays useful and appropriate for a very long time. The more evergreen the product is, the less ongoing costs we need to provide for future maintenance and updates, so it should have a high score. On the other hand, if your product is not effort green meaning, you need to continually invests in tow that thing toe, keep it current, or to keep it selling, then you can only give it a low score. Okay, so those are the 10 market evaluation scores now in practice, I understand that not everyone can and showed threat each off discourse the same. We all have different situation and condition. For example, if you have a lot of money and you are ready for a large investment, the investment score may not be too relevant to you or another example. If you are in technology business like Sonny or EPO, and you're comparing different technological products, the effort green potential scoring may not be that relevant to you. So because off these, I add another multiplier in the scoring table called the Importance. The value for important scoring is between 1 to 5 five if the scoring is essential to you and one if the scoring item is not that important to you to calculate the total, you need to multiply each score to the importance value and in some up all of them for each off your business. Ideas for markets usually use the same importance of value but may have different scoring values depend on your research results. Only then you can compare and understand which business idea or product is the best 10. 01-06 Profit VS Passion: in this lesson video. We're going toe coffer how entrepreneurs must put themselves in the correct business mindset, whether they should blindly followed a big profit at the end off the road. Or so they follow their heart indefinitely as a reminder off where we are now in the curriculum. We are in the first chapter discussing the first pillar off business, which is value creation, and we are still in a sub chapter off market evaluation. Okay, so many people, when they are thinking about starting a new business, the only thing like what is going to make me the most money possible, or like what business going to make me the next billionaire? Fast. So essentially they are doing business solely for the money. They don't care if the business personally interest them, even though seeing things through financial perspective is a good thing. But if you're doing business only for the money and your inner self, actually resisted or even hated, don't expect to have great results from the business. Why? Well, because based on a lot of business case studies, successful entrepreneurs are mostly people who are patient it about what they are doing, and this motivation resonate throughout their business organization. You can think off business. It's like traveling through an unknown road with many hazards and dreadful traps. There will be small and big failures along the way, so mostly it is a matter off starting it over and over and over and making progress until it is done. If you're doing something like these without a slight off love off what you are doing, it will drains your energy so much that eventually you will hate your own life. And there is not a good thing. Many business case studies show that lot of businesses died because the entrepreneurs suffered from this burn out. And trust me, you don't want to be one off them, burning out and hate your own life. Contrary to the previous mindset, there are a lot of people starting and staying in a certain business purely because they follow their passion without a slight US Hinz off how the financial projection looks like they kept doing it only because they laugh doing it. Another example are people who jump into a certain business out off pure idealism, maybe a higher vision who changed the world for good now there is nothing wrong, Toby, a person with idealism and vision. In fact, it is actually a good thing. But to start a business, you also need to see things from financier perspective and plan for long term self sufficiency. You won't be able to change the world if you cannot pay the bills right, just because you love it or you uphold a noble cost for it, that doesn't mean it will make a good business. Sometimes there is just not a market for it. And if there is not a market, there is really not much you can do about it. We've talked about this before in a previous lessons, so I won't go into the details again in this lesson. And if we look beyond, then just the market, you need to understand that developing of business has a lot off consequences. Some off them, our financial, some off the mark, time and energy and even relationship. Believe it or not, there are many people lose their marriage because off a failed business, this is reality and happens a lot to people around us. So my advice to you is this. When you start a business unit to make sure the street things first. The business really is objectively fishable. These first prerequisite relates to the lessons we've learned previously. Things like the market, the economic drives and the market evaluation. All I need to show that the business truly is visible. Second, you have depression for it. And if you don't have patient for it, at least you need to find a way to learn, to love and to enjoy it. Okay, Now, when I see, learn to love it. This is a very interesting topic. And there are many great examples for this off course. Having deep patient on your business is your number one priority. You cannot beat this. Great entrepreneurs are known toe have love and patient with his business. Bill Gates, for example, has been programming since he was a kid. Stiff Jobs also made his first gauge it, which is a camera when he was a kid also. But the reality is there are many boring businesses out there that actually makes a lot of money. I mean, yes, everybody wants to be the next Microsoft or Apple. That school, nobody necessarily wants toe own the next rush processing station or sanitation department or water treatment planned. Talk about a dirty business. But from appear financial standpoint, those things win because the market demand is very high. The problem is, these opportunities will be a bad business for you, unless you really find some way to be interested in it. If you can do that, those can be really good opportunities. Remember the Matthew asked Born case and his pooper scooper business? I mean, nobody likes scooping dope. Who's right? You never heard people screaming, Yeah, it's vacation time and other scooping poops all day. That is not gonna happen. But Matthew learn to enjoy the business and made a huge success from it. Essentially, if you can find feasible business, which initially you don't have any patient for it. But you can find something you are fascinated with something about the business that you are interested enough to keep working on and keep improving. Then go for it because those boring businesses can actually be quite profitable. 11. 01-07 The 11 Forms Of Value: in this less and video we're going toe coffer, the 11 forms off value. We are still in the first chapter, discussing the for spiller off business, which is a value creation. But now we are moving to the second subject, ER, which is forms off value. Okay, we learned to evaluate the market before the next step after we evaluate the market is to start thinking about the value for the solution we want to offer in order to actually provide something off value to other people. It has Toby inform that people are willing to trade. For now, many people, when asked about what type off value of business can offer. Mostly, they can only think about two type of values, product and surface. What most people don't realize is that product and surface is only two out off total 11 forms off value. So there are nine other forms off value that most people don't realize they are exists. People may already experience them, just not realizing them. After discussing these forms off value, we will see these forms off value keep appearing over and over and over again. Everywhere the names may be different. The business may be new, but at the core they will fall into one off this 11 forms off value. So again, values are something that people want to trade for. Or, in other words, they are the things that actually get purchased by people in a transaction process. And values may come in at least 11 different forms. OK, so the 11 forms or value our product surface, shared resource subscription, pre sale, lease agency, audience, segregation, loan insurance and capital. And what's so interesting about these forms off value is that most businesses actually offer some combination off all of these things, so you are not limited to just one. You can have a bunch off these things, and you can mix and match them in interesting ways. Okay, let's discuss each off them briefly. In this lesson, force is product. I think we all know what products are essentially. They are items that can be produced massively and sell as units. Second is surface surfaces are benefits delivered by skilled workers. I think I don't need to explain the examples for products and services because I believe all off you already know about them. Okay, Next is shared resource shirt resources are durable assets that can be enjoyed by many people at once. Things like theme park, where people can write on a roller coaster together, or another example, is gym where people share treadmills or other fitness facilities together. Next is subscription. Basically, they are ongoing benefits in exchange for recurring fee, for example, things like Internet providers, electricity, profit, schools or even membership sites where you need to pay monthly for the ongoing benefits. Next is reseal well, this is very simple. Basically, you buy low and sell high. It is essentially trading. For example, any local convenience stores that you can find near your location are resale. But it can also be online stores like Amazon, for example. Max is a lease. Leasing is renting durable asset for a certain off time in exchange for a fee. For example, leasing a house or a car etcetera. Max is agency. Essentially, agency is like a surface, but it is a special type off surface where we entrust that someone to market and to sell our asset on our behalf. For example, Real estate agency Sports Agency, an advertising agency, etcetera. Next is audience segregation in essence, audience aggregations core activity is drawing a lot of people attention and then later sell access to advertisers. For example, magazines, newspapers, TV's, radio's and even Google and Facebook actually doing audience segregation as their core from a value next is alone. Loan is basically land resources to other people and then later collect interests. For example, bangs, Mort Gages and other credit companies. Next is insurance insurance. Is the EC off taking other people's risk for a fee, for example? Well, I'm sure most off you already know about insurance companies. Finally, the less one is capital. No capital is more or less like intangible product, but in essence, what we are selling or buying is not actually products or assets. It is the ownership off businesses, for example, the stock market or another example. If we start a new company and try to sell part off the ownership off the company to angel investors or through initial public offering, that thing that we are selling is not a product but a capital OK, in the next lessons, we're going to digest each off. This form's off value more in depth. One by one, we're going to see the pros and cons and the challenges that you must face if you decide to jump into one off this form's off value. 12. 01-08 Product: initial s and video. We're going toe cover the first form of value and that will be product. Currently, we are still in the fourth chapter discussing the first pillar off business which is a value creation. And we are no on the second subject, er which is forms off value. Okay, so as we discussed all year, products are items that can be produced massively and sell s units. Essentially, you only need to resign it once, and then you can duplicate it over and over again. This is exactly what makes products so attractive in most cases, because their ability to scale economically products have multiplication factor in them. But this factor is also the reason why products can be a high risk investment. The logic is like this. If you design a product and that product performs well and really make profit, duplicating them over and over again is essentially duplicating the success. You can make a lot of money this way, but if you make a bad product product that just flop in a market duplicating that product is essentially multiplying the failure over and over again. So it product, you multiply the opportunity. But at the same time, you also multiply the risk. OK, in general, there are several challenges off any product based business. First, you need to make the production costs as low as possible. Second, you need to make the production speed as fast as you can turn. You need to be able to price the product as high as you can, and fourth, you need to sell them as many as you can again. These are the general challenges off products, but different types. Off products yield different types off challengers. Let's see each off them. One by one. Products can be divided into several categories, based on different aspects in terms off time or how long they will last. Products can be divided into two categories. Durable and consumable. Durable products are long lasting products because they are not consumed. Things like furniture, cars, houses, etcetera was so great about this type of products is that they don't have any expiry dates . But what is not so great about them is that once people by it, people won't be buying it again for a very long time, so the rate off repeat orders are low. On the other hand, consumable products are products that people consumed. They will essentially deplete when in use things like foods, drinks, gasoline, etcetera. Contrary to durable products, most consumable products have expiry dates, but the rate off repeat orders are generally higher in term or physical forms. Products can be divided into two categories. Tangible and intangible. Tangible products are products that have physical forms. They can be seen in touch, such as cars, foods, furniture, etcetera, while on the other hand, intangible products are products that don't have any physical forms, such as software, games, music's e books, online courses, etcetera. Let's talk about tangible product force. One thing that you need to be aware about tangible products is the course off investment compared to the other type off values. Tangible product is one off the values that can cost a lot of money to begin with, because you need to create the tools to produce or to duplicate them, such as factories or machinery. Also, you need to think about the inventory and the distribution of it. You may think that inventory and product distribution is easy. Trust me, it's not. This is a huge issue when you are producing and selling tangible products. You see when you create a best selling product, but you only have several off them in your inventory. Meanwhile, people are ordering Kranthi off them. This is a bad thing because what people see from the outside, it's on Lee that you cannot fulfill their demand. This bad consumer experience can hurt your business reputation. So you want to make sure that you are continually producing enough product that everybody who wants one gets one. But on the other hand, if you are producing too much, you have so many on hand that will cost you a lot toe warehouse them to keep them in inventory. So balancing the production rate between inventory and market demand, it's one off the challenges you need to face when producing tangible products. Okay, now, intangible products are a bit different, and honestly, this is my favorite type of products. As I have made a lot of profits from this type of products way better than tangible products, there are several key benefits off intangible products. First, they don't require any inventory. Yes, you do need a medium to story, such as a hard drive or a surfer, but they don't need to scale up based on the amount off products like real tangible inventory do so we can ignore these as the course is not that significant. Second, we can duplicate intangible products effortless. We don't need any offensive machinery to create multiple copies of it, and third, we can deliver them with almost no cost at all, especially in the Internet age, where everything is connected before you need to produce a lot off CD or DVD to distribute games or software. No days you just press a button and that product don't loaded in just several minutes to your devices. So intangible products have all of the economic scale benefits off a product, but without the down sites, off inventory nor distribution issues, that is why it is so great. What is not so great about intangible products is that because they are easy to duplicate, intangible products are the easiest target off piracy. So, yes, piracy is a huge issue in every industry who produce and sell intangible products. Of course, changeable products can also be Pirated, but the risk is way lower because toe counterfeit a tangible product. The course off investment for doing that is not chip 13. 01-09 Service: in this lesson video. We're going to cover the second form off value, and that will be surface. Currently, we are still in the fourth chapter, discussing the for spiller off business, which is a value creation, and we are no on a second subject, ER, which is forms of value. Okay, basically surface. It's benefit provided by a skilled worker in exchange for a fee. In a pure surface based business, there are no tangible forms involved. So thing off something like massage or a barbershop private course full cleaning, etcetera. But in many other businesses, we can see combination within surface with other types or value. For example, over store on the sheriff who cooks the foot for us is a surface. Also, the waitress would leave for the food is a surface, but the food itself is a consumable product. Another example are tailors their work designing, cutting pattern and sewing. The court is a surface, but the cop itself that decline received is a durable product. OK, for now let's focus on on Lee the surface form of value and ignored. The rest are values that may come bundled with it. There are several benefits off having a surface based business first, because mainly what we are offering to the client is our own skill and time. There is almost zero investment costs in surface based business. Yes, for a programmer, you may need a computer or for a dentist, you may need a dentist chair, but these courses are relatively small compared to other type of values. The second benefit, off surface based business is that the profit from it is almost 100% off income. This is actually due to the first benefit because we have almost zero investment costs. Therefore, the income received by the business doesn't require to be reduced by anything else. OK, now, of course, there is always two sites off a coin. Surface based business is not perfect. There is one big this advantage off surface based business, and that will be it is hard to scale economically. Why? Well, first at the core, providing surface means trading your time with money, right? You have to do that thing, so you need to spend time doing it. And time is a non renewable asset. Everyone has 24 hours a day, not more. We cannot manufacture more time in a day. If we compared the surface to product this business, it is possible to sell 100 to 1000 products in a day. We can even achieve that in just a single transaction. If we are selling in wholesale but surface, we cannot do 1000 projects in a day at the same time. That is just impossible to do. Essentially, there is a ceiling or a constraint in our income. If we do surface based business, the second reason why surface is hard to scale it is because surface is tied up with the person who owned the skill. And we all know that we can have just duplicate people. We can, however educated or trained people to get the knowledge and skill, but it is not as easy as duplicating products. So based on these pros and cons about surface business, we can summarize the challenges off the surface business. The first challenge is the skill. Obviously, you need to possess some skill or ability that other people want or need. You have to be able to provide that benefit to the consumer. Second, you have to develop some kind off system that ensures the surface you are providing to other people is provided with consistently high quality. This is super important to make sure that our customers are satisfied if you provide consistent surface, but with better quality, people will be coming back to you. If you provide high quality surface but not consistent, people won't be coming back to you also. So again, I repeat, you need to create a system to make sure that your business can provide the same level off surface, over and over and over again. Let's take a rest or on business for our example again. If you go to a restaurant and then you have to wait an hour or more together for prepared for you, are you going to come back again to this restaurant in the future? Certainly I want. Or perhaps while you are waiting for the food, you hear the owner screaming and yelling to his employees or the waitress is just plain rude to you or your wife. For example, all these things are mostly called the surface points in the restaurant industry or in hospitality industry. In general. If you own a restore on and you don't have any system toe uphold this level off surfaces expecto have less unless visitors from time to time. Another reason why you should have system for your surface based business is scaling large food and rings franchises like McDonalds, Starbucks, etcetera. They can multiply rapidly because they have a system in place so again, unit system, because the system will ensure your business to provide consistent level off surface and also enable it to scale and to multiply. The less challenge off surface based business I want to mention in this lesson is managing clients. What I mean by managing clients is how to get more clients, but at the same time balance your workload so you don't get burned out. We don't clients off course. You don't have any business. This is a bad thing, but too much works from too many clients will force you to walk over your capacity. If this happens eventually, you'll get help problems, and you cannot finish the job at the standard quality you usually do. So balancing the works from clients is one off the big issues, your face in surface based business. OK, finally, my final advice to you guys is this because I have many experiences in surface based business and also in product based business. I can advise you that if you're just starting out and you don't have a lot of money for investment, surface based business is a very good starting point. You can start making a lot of money with just your skill and a very low investment cause. And there are many successful entrepreneurs from surface based businesses. But when you start growing, you shall try to find ways to create products around your business products that can generate side passive incomes. I really don't recommend you Toby impure surface business for the rest off your life, because as you grow old, you will have less and less energy to stay with tight deadlines and managing workloads. 14. 01-10 Shared Resource And Lease: in this lesson video. We're going toe cover two forms or value, and that will be shut resource and lease. Currently, we are still in the first chapter discussing the first pillar off business, which is a value creation. And we are now on the second subject, ER, which is forms or value okay, Less discussed, shared resource First, essentially shut resources are adorable assets that can be used by many people at the same time for a fee. For example, a theme park, a sports center or Jim, a movie theater, etcetera. If you are wondering, why are we discussing shed resource and lease together well, as I mentioned earlier. Basically, leasing is renting durable asset for a certain off time, so both shared resource and lease are almost identical. They are both durable assets, and they are both used by people for a fee or, in other words, people pay only to use the assets not to own it. What makes shirt resource different from lease is that leasing will give the customer the exclusive right on that asset, while shed resource is not, for example, if you're in an office space, you wouldn't expect to see other people in that office renting also that offers should be exclusive to you or if you rent a car, there should be no other people in that car renting that car also just like you. But if you write a roller coaster, you should expect other people writing it with you. So that is the big difference within shared resource and lease. Let's focus on the pros, the cons and the challenges off shared resource. First, one big benefit off shut resource is it enables you to have passive income. What I mean about passive incomes are money coming in without you having to spend time for it. Of course, every type of business can be designed tohave system which enable it running by themselves . But if you rate different forms or value based on the potential for them to become passive income, both shared resource and lease are very high. But she shouldn't right after intangible products and surface is the wars off them all. Okay, this advantage off shut resource business is the high initial investment costs us because mostly durable assets are expensive. So you do need more capital to start the business compared to other type off business such a surface based business. There are several challenges that you must face in shit resource business, the first challenge off course to build or to buy the durable assets that you want to offer . And as I said before, you need a lot of money up front to acquire these assets. The second challenge off shared resource business is making sure that you have enough income to cover the maintenance and also the emerald ization. We will discuss more in depth about amortization in finance section Leader in Shallow to make things simple Amortization Is the price off a durable asset divided by the total time off? It's expected lifetime. Essentially, we need to face the truth that durable assets were out over time and eventually unusable, So we need to put that replacement cost for a monthly basis. So, for example, let's say you are starting a new SportsCenter. You initially purchased threat meals for $1200 each, and based on your research, that type of treadmill usually breaks in around 10 years. Due to these, you need to save money so that in 10 years later you can buy a new treadmill to replace the old one. You can divide $1200 with 10 years and then divided again with 12 months, so we have $10 for amortization. By knowing these, you have monthly target off, saving aside $10 for each treadmill. And if somehow you don't make enough money. Montri toe cover. This amortization cost us. Then you know early that your business is in trouble and you need to do something about it . The challenge Off shut resource business, which is the biggest challenge of all, is level off access or, in other business term, also known as utilisation management. What utilization means ish Ensley. You need to balance between getting more users against the quality off user experience. For example, let's say you run a swimming pool business. You have a large pool or water park, which is suitable to hold 500 people. If you only get like 5 to 10 people, this is very bad, as you may not be able to cover the maintenance course in the amortization costs off that swimming pool. The users are happy, of course, as they can use the facility with minimum distraction. But if you have like 1000 users coming in at the same time, and you let them all in without any governing. Yes, you make a lot of profit this way. But are the users happy? Not likely. Most people will quit and wars they won't ever come back. Okay, so those are the pros and the cons and the challenges off shared resources. Now, what about Lius? Well, mostly leasing based business has the same process and cons, but the challenges are a bit different because users will rent our assets exclusively. You don't really need to care about utilization. What you do care about is security. Because, for example, if you let people rent your car and they drive around with it without you able to monitor them directly, you have a high risk off losing the car to thieves, or at least the risk off damage to the car. That is why it is important that you said the price high enough to cover the risks beside the maintenance course. An amortization costs but still make it attractive to the prospect users. And you also need to protect yourself from the unexpected, including loss or damage with other means than just pricing for example, you can make up front agreement that any damages to the asset will be a counter to the user . Or, for example, you can also plan GPS tracking device to each off the car at cetera. 15. 01-11 Subscription: in this lesson video. We're going to cover the next form of value, and that will be subscription. Currently, we are still in the fourth chapter, discussing the for spiller off business, which is value creation. And we are no on the second subject, er, which is forms or value. Okay, so what is exactly subscription, as we discussed earlier subscription is basically ongoing benefits in exchange for recording fee. Now, subscription is different from the other forms or value because it cannot exist alone. By itself, subscription has to be combined with product or surface or any other types or value. Subscription is considered to be a value because it is something that you actually purchase . For example, if you buy magazine or newspaper from a stand or a bookstore, you are buying a product, right? But if you subscribe to this newspaper or magazine, what you are buying is not actually the product itself. You are buying a subscription or a continuity. Why, because the products are not even exist. Yet tomorrow's newspaper or the next month's issue off the magazine are just promises off future values. In other words, what you are buying now is the promise off future value Toby provided at the due date. Okay, let's talk about the pros and cons off subscription. The first benefit off selling subscription is to take away some off the burden in marketing and selling processes. Because usually for a new business, the most costly part off the process is acquiring new customers. Remember the acquisition costs we talked about before? And with a subscription model? You have already done the most expensive thing. You already have them as customers, and now you only need to focus on providing them the value over and over and over again. And that's really cool. It's not just cool for us. It is also cool for them. Why? Well, first, with subscription, our customers usually get this gown. Second, it is more convenient for them to do the purchase ones and get the ongoing benefits repeatedly, rather than having to purchase again and again every month or so. OK, now off course, there is a care fear also in the subscription model, and that is you will get less profit due to the discount you need to provide to your customers. But in most cases, this is never considered as a drawback in financial standpoint, because the amount off say things you get from reducing the acquisition costs is always bigger than the course off providing the discounts. OK, so by knowing the pros and the cons off subscription model, we can discuss some off the challenges we need to face when we want to offer a subscription model to our customers. The first challenge, Obviously, you need to provide significant value to the subscriber on a regular basis. It could be yearly quarterly monthly, bi weekly. Whatever. Essentially, there should be a value deliver over a pretty find period off time. Okay, The second challenge is we need to keep attracting new subscribers. We need to keep doing this because there is always some people decided to unsubscribe. Er, we need to set up a system where we can be on the subscribers on a regular basis. The four challenge, which is I think the hardest part is the most important part of all is retaining your current subscribers because the more your subscribers pay you, and the longer they stay with you, the more money you will make. So a huge part off operating in a continuity or a subscription model is retaining your subscribers forest long as humanly possible. That is why, if you subscribe to something like TV Cable, for example, if you decide to unsubscribe, the Tiffy cable company will try its best to keep you in. Their staff will call you and offer you crazy discounts just to give you subscribed. Now you can bundle and mix different values with subscription to make it more interesting to a lot more people. Just, for example, let's say you have a company that produce and sell your good instead off just relying on change stores to distribute your products. You can try designing suffer or subscription models, such as three bottles per day or six bottles per day delivered to the front door fresh in the morning with monthly recurring fee. Or you can wonder the offer with fresh milk also or with other Apsell products, such as cheese or even with sliced breads, etcetera. Because different people have different needs. After you designed the models, you can have yourselves people offering me subscription models to the prospect customers door to door. Trust me, the more subscribers you get, the more easier your business will run and the more fun you will feel about your business. So as a general rule off Tom, this is my advice to you. Whatever you do, whether you are doing products or surfaces or any other forms or value, try to add some type off subscription model twit because adding that continuity element really makes the business much more stable, much more predictable. You can reach sufficiency faster and you can manage it easier, and it's all great, okay? 16. 01-12 Resale: in this lesson video. We're going to cover the next form off value, and that will be resale. Currently, we are still in the fourth chapter discussing the first pillar off business, which is value creation. And we are no on a second sub chapter, which is forms or value. Okay. Basically, resale is buying goods at low price and then sell them at high price at a glance resell form of value. It's like product because you are selling products to consumers. But what makes it different is that you don't actually create the products. You just purchase them from other companies who actually make them and then sell them again . I believe you already know the examples off resell business in us. There is a big resell company called Wal Mart. I'm sure you can find similar resell companies in your own countries, and it doesn't have to be big stores like Wal Mart, even small corner stores or convenience stores at your local area. They are all also in the resale business. Nowadays, the cell businesses not only exists in brick and mortar form, but also as online stores. We all know big names like Amazon, Alibaba Ali Express at said Ron. Okay, now the question is what exactly makes resale business works? Why not just the consumers buy directly from the producers without the middle man With Wyndham? Well, the answer is this Business works because off two factors. Convenience and sells funnelling. Let's discuss the first factor. Richest convenience for consumers. It is more convenient to go to a store where a lot of different products are available for sale rather than having to go to each off. The producers factories one by one just to purchase their products. So essentially the value off resell business is not the products themselves, but the convenience toe easily acquired those products. The second factor is sales funnelling for producers. It will cost them a lot of money to make their products physically available in front, off millions off people just to capture prospect buyers. It is easier for them to put their products in the store shelves off resell companies because a lot of people already going there with money in their wallets to buy stuffs. Sometimes people just buy new products. Daisy in the store, out off curiosity, they initially have no plan to put just the products, but they end up laughing the products and become a lawyer consumers ever since this is what sales funneling is all about. It is where products and buyers get together massively. And this condition actually helps new products to get the exposure in the market faster so we can conclude that resell businessmen function in the global economic me is to connect producers to the end consumers. So what are the pros and cons off resale business? Let's talk about the corn first. Most people think that resell business is easy. You just buy low and sell high, right? Believe me, it is not that easy. In fact, it is the second hardest business in the world. This is not my bias opinion, but the opinions from a lot of business experts who actually experience running the business and study them. Okay, so it is the con. What are the pros? Well, if you manage to do it well, resell business can actually makes you very, very rich. Okay, so we know now that resale business is hard. There are many challenges you need to face in order to succeed in this business. The first challenge is you need to purchase goods that can actually make sales something that people want, something that has a market as cheap as you possibly can. The less expensive you acquire it, the more money you get to keep after you sell it. Second, you need to keep the products in good condition until they are sold. It doesn't make any difference if the goods damage or stolen or junked up past their expiry dates. You will lose a lot of money this way, and this is a really big issue in resale business. There is why resale companies like Wal Mart, they a huge amount off attention to their supply chain. Next time you go toe a superstore, try to take a walk to the back off their building. You'll be amazed off how much goods become junks piled up in there. Dr. Challenge is to find customers who want to buy the assets that you are reselling as quickly as possible toe overcome or to minimise inventory cause because the longer you hold on to inventory, the longer you have money tied up in those stuffs, which you cannot use for anything else. For example, you cannot use it to pay yourself and your employees or you cannot use it to get new products. The fourth challenge is to sell the products as high as possible. Ideally, the selling price is a multiple off the purchase price, the higher you can mark it up or the higher the difference is between how much you bought it and how much you sell it for the more money you make. In theory, this is easy, but in practice it is not why. Because usually in resale business, you are selling common things that other people selling also so mostly the consumers are very aware off the price differences. The final challenge off resale business is cultivating relationships with the people you put. Adjust your products from because they are your lifeblood. If you don't have products to sell, you cannot resell them. And so really finding good people to purchase from and being able to get good products and get them at a low enough price that you can make enough money are the keys to reselling 17. 01-13 Agency: in this lesson video. We're going to cover the next form of value, and that will be agency. Currently, we are still in the fourth chapter, discussing the for spiller off business, which is a value creation. And we are no on the second subject, ER, which is forms or value Okay, essentially agency or also known as affiliation. Orebro Cree is like a surface, but it is a special type of surface were no clients. They'll get someone to market and or to sell their assets on their behalf. The key word here is delegation. So on agents job is to represent their client and to make sure that the client's interests fulfilled as best as possible. Unlike Product for more value, agents do not make the products themselves unlikely. Sale agents don't even own the products they never purchased the products, and, unlike surface agents, are mostly paid by commission or percent age off How much the clien will get. There are many examples off agency relates that agency, sport agency and advertising agency, etcetera and in the world, off Internet marketing. Nowadays, there are many people getting rich from Internet affiliation. You can find many affiliation websites such as click bang dot com, giffey zoo dot com, market health dot come and even Amazon and eBay Half affiliation programme. But a side note here for Internet marketing or affiliation. These type off business is a hybrid off agency and the next form of value that we are going to discuss, which is audience segregation. So many off the pros and cons and the challenges off pure agency business not really applicable to Internet affiliation. Business s. They are more likely toward audience segregation type off business. We will discuss more in depth about audience segregation in the next lesson. Okay, so how can this agency business works? Well, agency works because off suffering reasons. First, the agents may have the knowledge and the experience about a certain industry that the clients don't have. Second, the agents may have connection toe a certain people that the clients don't have. These people are perhaps important decision makers in the industry that the clients need to connect toe toward the agents have the necessary negotiation skill that the clients don't have, and for especially in Internet marketing, Real, the affiliates already have large traffic or email lease where they can promote declines products. There are pros and cons in agency based business, mostly because agency is actually a form off specialized surface. The pros and cons off agency are mostly the same with surface based business to sum up the pros off agency business. Our first, it doesn't need any investment costs or the investment costs is very small to almost zero second. Almost all of the income in this business is profit. There is no production course or raw material costs in this business. Okay, now for acorns. First, this business is hard to scale economically because agents need to spend time to do their work just like surface and time, as we all know, is a non renewable asset. Second, due to the first point before there is a sailing or a constrained in our income. Third agency business depends too much on people. Not everyone has the knowledge or the experience or the negotiation skill to become an agent. So to scale up the business, you need toe train or educate people. But once you educate them, there is little or no string attached to them. They may exit the company or the firm anytime they want and start their own. So the challenge is off affiliate or agency business RVs. First, of course, you need to acquire the knowledge, the experience, the connection and the skills etcetera in order for you to take the role off agency properly, and also so that other people can trust you. Second, you need to find the values belong to other people who may need your help on selling them. Third, you need to establish contact and good relationship with both the client and the consumer. Next, you need to be able to negotiate with the consumers or the buyers. Essentially, you need to try as best as you can to achieve if your client's best interest, but at the same time satisfied the need off the buyers also five. And this is important. You need to make sure that the commission you get from selling the values is big enough to compensate the time you have spent on selling them. Why, this is important because you need to realize that sometimes you just don't make sales, but you do still need to cover the monthly courses off this downtimes also right. Okay, guys. So those are the pros, the cons and the challenges off agency business 18. 01-14 Audience Aggregation: in this lesson video. We're going to cover the next form of value, and that will be audience segregation. Currently, we are still in the fourth chapter, discussing the for spiller off business, which is a value creation. And we are no on the second subject, ER, which is forms or value Okay, essentially audience segregation. Core activity is drawing a lot of people attention and in later sell access to advertisers . For example, magazines, newspapers, TVs, radios, etcetera. Many people believe that magazines or newspapers get a lot of profit from the customers who purchase their products. This is actually not true. Mostly the money paid by the customers or the subscribers are just enough to cover the production and distribution costs. US. Their biggest profit is actually coming from the advertisers. Another example. Off audience segregation Business is exhibition event organizer. They create these large attention, toe a specific people toe, come to their specific event and make money by selling slots to other companies in that current market for sponsorship. And this audience segregation business works because a lot of companies do need to have access to large yet specific audience toe advertise their products nowadays in the Internet age. We have big companies like Google linked in and Facebook etcetera, who actually doing audience segregation as their core for more value. This company's almost never charged anything to the users who use their surfaces. Yet they make a lot of money because they sell access to people who need to advertise. And not only large companies are doing this. You can find a lot of websites or blocks also doing audience segregation. You can spot this easily because they are displaying ads in their website using advertising network such as At Sense, for example, or selling affiliate products, as we have discussed in the previous lesson. Okay, so what are the pros and the cons about this business? Let's start with the corns first. You might think that audience segregation is easy. Contrary to this assumption audience, segregation is by far the hardest business in the world, followed by resale business right after it again, this is not my own bias opinion, but based on a lot of business experts who actually doing research on these topics. Okay, so why is this business heart? Because to provide value that will attract millions off people is hard and these values not only need to be created ones, but you need to provide them again and again every certain period of time. So, yes, you need a lot of upfront investment to cover the company's courses in this growing times. And then, once you have this attention and you start showing at Fourth Iceman's in your product, people will start running way. So keeping people attention is even harder than getting them in the first place because you start displaying things that they consider to be annoying. Okay, the pros off audience segregation business is, if you can manage it well, you can make a lot of money from it. And another benefit off audience aggregation is actually from the audience standpoint. Mostly, people get a lot of benefits from values provided by the audience. Segregation companies take Google, for example, how many people get the benefits from using Gmail? By the time I recorded this video, it is already surpassing 1.2 billions off people. That's a lot of people toe have as users, so essentially, if you can manage it well, this business can be great because you are benefiting a lot of people. Both the audience and the advertisers. So after we know the pros and the cons off audience segregation, we can start discussing the challenges off this business to succeed in this business. First, you need to identify a group off people with common interests. Essentially, you need to find the audience you want to aggregate next. You need to think on how you can create and maintain a way to attract their attention. You need toe not just creating values, but create a system that can generate those values over time. Even if you are creating online surfaces like Google or Facebook, you need to continually at features, develop smarter algorithm, etcetera, so that it attracts more and more users with different needs. Next, after you have enough users or audience, you need toe. Find third party people who are interested in buying the access to advertise to our existing audience. And finally, you need to manage or to balance the values you are providing against the amount off advertisements you want to display in such a way that it is effective to the advertisers. And yet the audience will not running away. I believe that this is the most important issue you need to face in audience segregation business and the key success to solve this issue is to make the advertisements looks like are perceived as valuable content by the audience. We can do this by displaying relevant ads, lines or in context with the audience type. For example, on advertisement off a new loan. More machine may perceived as important information by the people in gardening community. But for people in automotive or in car collection community this loan more at Fort Iseman, we'll just be perceived as another annoying at Fourth Iceman. So again, making the advertisement to be perceived as a valuable content is the success key in audience segregation business. 19. 01-15 Capital: in this lesson video. We're going toe cuff for the next form of value and that will be capital. Currently, we are still in the first chapter discussing the for spiller off business, which is value creation. And we are now on a second sub chapter, which is forms or value. Okay, so what is capital? As I mentioned earlier, Capital for More Value is essentially on investment by purchasing the legal ownership off a business at the glands. Capital looks like an intangible product, but it is not. You can own a product with the product itself is not an ownership. While capital is just an ownership without any real product involved, there are many examples off capital from a value such as private equity AIPO or initial public offering stock market etcetera. Honestly, I never sell any off my company's shares through AIPO or stock market, so I don't have much to say about this type off capital or investment. But I do have many experience in private equity. So what is private equity? Well, if you want to start a new company and you don't have enough money to start with what you can do to solve this issue is to find an investor or suffer investors to fund your business . If you do this person to person without any third party or without any stock market involvement, then this type of investment are called private equity or also known as Angel Investing Off course. The Angel investors not just giving you the money for free. What they ask in return is the legal ownership off your business. Commonly, they can own the business partially like 20% 50% 70% etcetera. There are no fixed consensus about how much the investors can all your business. It is all depends on negotiation between you and them. But as a general rule of thumb, the investors usually get the ownership based on how much they are investing against the total ward off the company. For example, if the company worth $1 million the investor invest half off $1,000,000 then that investor has the right to ask 50% off the company's shares again, this is just a common rule. The outcome really depends on the negotiation process. Okay, so this bring us to the next question. How do we know the total ward off the company well, the process off estimating the world off. A company is called evaluation, and this evaluation alone is a very deep topic toe coffer. There are even companies who specialize on giving evaluation surfaces. So what are the pros and cons of capital for more value? The pros about capital from the investor's point off you is there capital investment can generate passive income. For example, if you are an investor and you own 50% off a certain company, you are entitled to receive 50% off the total dividend from that company. If you don't know what diffident is. Essentially a diffident is a payment made by a corporation to its shareholders, usually as illegal distribution off profits. It can be yearly, quarterly or even monthly. All depends on the initial agreement from the entrepreneurs standpoint. Capital can help them kick stop their fame. Scherer Otherwise, without it, entrepreneurs can only rely on their own resources, which are in most cases very limiting. In business term, starting a new company without any external help or capital is called bootstrapping. So again, with capital, you can avoid bootstrapping and opens up more possibilities in your business plan. Besides the pros, there are also the corns in capital for more value from the investors. 10 point, because capital is a form off investment and or investments have risks associated to it. So you might lose a lot of money if you provide capital toe a business. But then that business not performing well. The don't site off capital from the business owners perspective is that the more capital they acquire, the more ownership they have to let go to other people. Okay, so the challenges off capital for more value can be seen from two different perspectives. Whether be asked, the investors are as the entrepreneurs we're going to focus on, investors point a few because they are the ones who are more interested on making profit from the capital. So the first challenge off capital is that you need to have a pool of resource is to begin with. Mostly the resource is our money. But it can also be other things, such as production tools building, and it can also be effort and the mix between them. For example, let's say you just spot a very good start up and you want to own 40% off that startup company. You happen to have money and unused office building, and you also have some connections to help this startup grow quickly. You can then offer the combination. All off these assets, you have the money, the building and also the effort to give you more power in negotiating your ownership off that start up company. On the other hand, as a business owner, you can also use capital again effort, for example. You can offer someone or on expert toe walk with you by saying, Hey, we need you to walk with us. We cannot pay you with salary, but we can give you the stocks off this company. Okay? The next challenge is you need to find companies that need investment and not just any companies, but companies that worth your time and investment companies that have a great future potential. So basically, you need to undergo the evaluation process off that Kareem companies worth and estimating or weighing between the risk against the future potential off the company. And honestly, this is not an easy task. After that, the next challenge is you need to negotiate for the amount off ownership you want to get. As I mentioned earlier. There is no exact price for capital. Everything is based on assumption and upon agreement from both parties. And finally, the less challenge is making sure that the business runs smoothly and profitably. This will require you to monitor the company or even taking control off the business to a certain extent. Okay, guys. So those are the pros, the corns and the challenges off capital for more value. Now there are two more forms of value that we haven't discussed yet, which are alone and insurance. I will need to skip this last two forms off value because, honestly, I never had any real experience about this tool. Also, I believe with the previous nine forms off value explained before, you already have the general picture off. How these forms are value work. Mostly what I explained about these forms off value are just common sense. You can read specific books about them if you really want to learn more in depth about each off these 11 forms of value 20. 01-16 How To Deal With Competition: starting from this lesson video we're going to discuss about competition. Currently, we are still in the first chapter, discussing the first pillar off business, which is a value creation. And we are no unaltered sub chapter which is creating competitive product OK after we value at the market and we already decided on what forms our value we want to offer to the market . The next logical step is to start thinking about the competition because let's face it, no matter how good your offer is, most likely there are other businesses who are for the same thing that you are creating, even if you are creating something new, something very unique. If that thing you have created gain huge success in a market in just a short time, you will find more people creating identical thing, hoping to gain the same success as you did. So either way, you will face competition. Therefore, being ready and prepared for competition is always necessary, whatever your business or your product is, so it's competition. Always bed for your business. Well, the truth is, competition can be bad, but it also can be good. Let's discuss why competition can be a good thing. First competition is actually a sign off market existence. For example, if you see an industry and you want to know whether the market is good or not in the industry, just see the players in that industry. If you see many players competing in there, it means there is a huge market in that industry. Essentially, if you find competition, you are 100% certain that there is already a market in that industry. Second competition can be a good thing because it forces companies to be more creative in creating innovations. And this is actually a good thing, not just for the consumers but also for the whole industry. The more innovations happen in the industry, the more attractive it is to the consumers. Competition can be a bad thing if it is already too much to handle what I mean by that. If the competition is toe fierce that companies start losing profits due to pricing wars, this unhealthy condition is also known as the R Ocean condition. It is called Red Ocean because it is an analogy that the players in the industry are bleeding so much that it makes the ocean filled with blood. The term was popularized since 2000 for by a best selling book titled Blue Ocean Strategy. If you find yourself in his Red Ocean condition, then you might need to start thinking out off the box and creating new markets spaces for your business. This exit strategy from the Red Ocean condition into creating new untapped market is what is called the Blue Ocean Strategy. You can read and learn about the strategy more in depth from the book Blue Ocean Strategy. Okay, now we know that competition can be a good thing and also about thing. So what is the best strategy to deal with competition? Well, the best way to deal with competition is this. Let's say you already done your market research and you already conclude that there is a huge market. The men on a certain business. After that, you didn't study the competition condition. In that industry, you may find three different conditions. First, there is no competition at all. There are any player exists yet in the market. Second, there are already small amount off players surfing that market. And third, there are too many players exists already with fierce competition in that market. Okay, so let's take a look at the first condition. If you find no competition at all, this can lead to a very, very good opportunities or a very, very bad risk. You need to find out why there are in any competition in that market. Perhaps our initial market research is false. Maybe there are no actual market demand exists. So this first condition is actually risky. The second condition is more ideal than the 1st 1 If we see some players in the industry, it means there is an actual market exists. The next thing you need to do is to study their offerings and try to come up with a better solution. The term and the last condition is if you find first competition that is already unhealthy in this condition unit of Blue Ocean Strategy which essentially creating a new differentiated market space so you can escape from the existing bloody competition. Okay, guys. So to sum up, here are the key points you can take from this lesson force. You always need to prepare for competition. Even if you do a blue ocean strategy from the beginning. That strategy one less forever second competition is not always a bad thing because competition is actually a sign off market existence. Our competition can be a bad thing if the market is too crowded with similar offerings and the players already doing unhealthy pricing war. This condition is known as the Red Ocean Condition. For if you find yourself in the Red Ocean condition, you should start shifting your business using the Blue Ocean strategy, meaning you need to start thinking on creating new markets, spaces for your business. And finally, the last point is, the best way to start a business is to find a huge market. The man, which already has small competition. Just make sure you can create better offering from the existing products in the market. 21. 01-17 Creating Competitive Products: in this lesson video we're going to discuss about how to create competitive products. Currently, we are still in the fourth chapter discussing the first spiller off business, which is a value creation. And we are now another sub chapter, which is creating competitive product. OK, we learned previously how to deal with competition, and we know that whatever we do, we always need to deal with competition by creating competitive product. So how can we create competitive product? Then we can create competitive product by ending economic values to our product. Economic values are the things attached to a product or any form of value in general to make it more appealing In consumers eyes, there are nine economic values. Let's discuss each off them one by one. First is efficacy or, in other words, effectiveness Or how well does this product works? Essentially, you need to look the core value off the product and see how well the product performing its core value. For example, if you are selling vacuum cleaner, you can measure its efficacy. By how strong does it suck dust or dirt? The stronger it is able to suck the cleaner. The result. The higher the efficacy of value off the vacuum cleaner. Next is speed. It is how fast the product works Now. These economic values may not be applicable to every product in the world, but only those that have time related feature on them. For example, a car. How fast can it moves or computer? How high is its clock speed? A printer? How fast it can finish printing off full page, etcetera. Next is reliability, or how long does it ableto work until it is broken down. For example, if you sell washing machines, certain washing machines can run well more than 10 years. While other washing machines can barely survive three years off usage, the washing machines that can run more than 10 years surely have higher reliability value than the other ones. The next economic value is is basically how easy it is to be used. If a product can be used right away even by a two years old kid, then the product has a very high is economic value. If a product is so complicated that you need to read hundreds off pages off manual guide just to use it, then that product has a low is economic value. Next is flexibility. It means how much additional features does the product has besides its main functionality. For example, a smartphones main function is to call or two message other people. But now we can see high end smartphones that can do a lot of things at once. They have GPS and compass gyroscope, proximity sensors, fingerprint reader and FC three D depth sensing, hand gesture recognition, high megapixels, camera, etcetera. The list is just getting longer and longer. Okay, next is status or state of signaling. Essentially, it is how the product will affect the perceived status off its users. These status can be economic status. For example, a person who writes an expensive sport car signaling different status toe his surrounding compared Toa, a person who rides cheap second hand car. But it can also signal other type off status. It is not always about economy. For example, in a school or university, people who were ties or formal clothing are usually lecturers, and people who were T shirt and sneakers are commonly students. Knowing these is important because just a slight changes in the product design can turn off certain market desire. But on don't the others. Next is aesthetic appeal or, in other words, how beautiful it is. For example, a lot of people just love certain car product, although that car, it's not that expensive and so not signaling high status. They love the product purely because off it's beautiful design. I believe you can find many examples about this aesthetic economic value. The next economic value is emotion. In other words, how does this product makes you feel? You may think that this is similar to aesthetic economic value, but it is not. It is not about the design or the visual beauty off it. It is purely the emotion side of it. For example, the product may be funny, and it makes you laugh when you look at it or the product me reminds you off. A certain classic items from your child food. The less economic value is cause, which is citing. You already know what it means. Basically, the lower you can put price on a product, the more attractive it is to the buyers and therefore open more possibilities for people to purchase it. In general, this is true, but there is something about pricing that you need to understand a price actually signaling quality. It is funny that cheaper products not always sell more, so there should be a strategy involved in setting price for your product, and we are going to discuss about these in self section. So those are the economic values, which we can add to our product to make it more appealing. In general, the more economic values your product has and the higher each off the value ease, the bigger your chance to win the consumers preference. And at the end, the bigger your chance to win the competition. But in reality, this is hard to achieve. What I mean by that it is almost impossible to have all of the economic values at once on a single product. Why? Well, there are two reasons for this. First, in most cases you just need to make trade offs. You can make one higher at the expense off lowering the other, for example, you want to make a highly durable product, then you need to purchase high quality materials that is not cheap, so you can have high durable value but low value at the cost or another example you want to make a very sophisticated product that can do a lot of things. In other words, it has high flexibility of value. But then the product become too complicated to operate so that you lose the ease economic value because off it, the second reason is because different people have different needs. Some people may value certain aspects off a product, while other group off people may value other aspects. That is why you can find so many product variations in this world and the key success to do that is to understand the segments in your market and to truly understand the demand off each off the segments only with these, you can then make the right tradeoffs for the economic values off your product. OK, now, what if they don't have large budget to create different types off product needed by the market? Well, just remember this court. You cannot be everything to every people. Just do the best what your best customers value the most Trying to be everything to everyone will actually make your product attracting no. One. Essentially, if you have limited budget, just do these three steps. First, find out your best target market. Second, find out what are the most important economic values for them and finally optimized the economic values off your product to match them. 22. 01-18 Unique Selling Proposition: in this lesson video we're going to discuss about USB or unique selling proposition. Currently, we are still in the fourth chapter, discussing the first pillar off business, which is a value creation. And we are now on 1/3 sub chapter, which is creating competitive product. OK, USB are unique. Selling proposition in business term is essentially the things that separate our offer from the crowd. When we are talking about competition, it is important to think about what differentiates us from the rest off the players. We don't want our product to be just another product on the shelf. We wanted to have a certain appeal that elevated above the mass. Okay, now U. S B is actually a very popular term in marketing, but we discussed this early in value creation section. Why? Because the root off USB is engraved in the product itself. It is not merely just a marketing language. If you only think about USB in the marketing process while your product was designed not to tackle this issue from the beginning, you will have almost no space to innovate Further. The USB will just be stickers or a make up that you put on your product, and sooner or later customers are going to find out about it. This, for example, you have a company that produced shampoo. You already have a shampoo product for adults. Now you want to target Children market segment if you just change the label and a bottle off your product and sell it as Children shampoo. When consumers both them and use that shampoos on their Children, what do you think will happen when the shampoo foams get speckled in the Children's eyes, the Children will feel pain in their eyes. This is not a good thing, because usually Children's shampoo has special formula that doesn't cost pain in the ice. Consumers are not dumb people. Eventually, they will realize that you just faking the product, using the same formula for different purposes. So again, it is important to think about USB early in a value creation process, not just in marketing face. Okay, so how can we design this USB? Well, actually, we have talked about this a lot in a previous lessons to descend a USB off our product, we can do bundling and unbundling different aspects that influence our products, which are the seven economic drives, the Levin forms or value and also the nine economic values. We have discussed all of them already, so I won't repeat them again. In this lesson. There are many examples off successful USB strategy, but there is one unique case about USB that I want to share with you. In this lesson, you probably already know about a game console called Nintendo Wii. You may not be able to find this council today, but in its time, the council waas a huge success and show how USP strategy can win over head to head competition in 2006. Sony PlayStation three and My Cross Off X Box 3 60 already have a strong presence in the gaming market at that time. Nintendo Waas planning to launch their next gaming console, which is splendid. Toby, released in the winter off 2006 the PlayStation three and Xbox 3 60 were designed to be all inclusive powerhouse consuls that closely resembled full media centres with high end hardware specifications, high definition DVD players and high definition picture output, which also resulted in power house prices ranging from $275 to $499 respectively. Both are battling the same war with same weapons. Nintendo understand very well that if they jump into this war, it will be a bloody battle for them. And we all know that Nintendo has different route than Sony and Microsoft. While both Sony and Microsoft are technological companies in Tendo is not Nintendo at the core is a toy company. Their main focus is to make something fun and enjoyable by a lot of people, not making highly sophisticated hardware. So Nintendo take a very different approach to enter the market. Nintendo Wii differs from the other consoles not only in design and concept, but also in performance and capabilities. It is simpler and cheaper, the weak and so does not play CDs or defeat ease. It doesn't have high definition outputs, and its online gaming is like plaster at best at $249 do we is also the most affordable council on the market. However, what makes a Nintendo Wii different from the rest is it is designed to make you move well. Other game consoles will force you to sit on the couch for hours and hours in 10 movies, wireless motion sensor controllers and its games will force you to get up from the couch and move your body. This approach really race on it with people who are craving toe have a healthier life. Also, what other councils target hardcore gamers? Dewey is designed with a broad audience in mind. The most popular and best selling game is the Wii sports, which includes simple sporting events like bowling, tennis, baseball and boxing. We has parents and grand parents playing video games with their Children because off its interactive design and white appeal do is getting prices from parents around the world. For once a game is forcing Children to move while they play. For the first time, people are actually breaking a sweat while playing video games. And not only that, we managed to take the passive activity off video gaming and turn it into a healthy family activities. It has also changed the game industry forever because since then, many companies inspired to develop different motion tracking devices with this USB strategy require reporter that until 2012 Nintendo win the game council Beto as they successfully sell more than 100 million units off we. While both Sony and Microsoft can only sell around 80 million units for each off their consuls, this is a huge success considering that Nintendo have much later start then Sony and Microsoft. 23. 01-19 Prototyping: in this lesson video we're going to discuss about prototyping. Currently, we are still in the fourth chapter, discussing the for spiller off business, which is a value creation. And we are no on the four sub chapter, which is product testing. Okay, after we evaluate the market, then we decided to go with certain form of value, and we already designed the product to focus and to include certain economic values. You might be tempted to create and produce the product massively right way. This is actually not a wise decision. It is recommended that you do product testing first before you go into mass production. This is to make sure that our product made the expectation off our customers. Product testing face is where we go to our prospect customers, and we lend them our product to be used or a tested in the real usage scenario. Now you might be wondering the product is not yet produced. What should we use for this product testing? Well, the answer is, we use the prototype. So what is actually prototype prototype? In general, business term is an early representation off our product or our form of value. Ideally, a prototype should have all of the core functionalities already in place. So this way users contest it. Or at least it has all of the necessary things to visualize what the final product will be . As a general rule of thumb for prototype, the more similar it is to the final product, the better. The prototype is okay now in different industries, Prototype can have different names, but they all serve the same functionality, which is an early representation off what you are offering or what you want O build or produced. For example, in some manufacturing industry, it is called model in Architecture. Surface business. Architects usually built a small size prototype off the building, which is called scale model. In my country, Indonesia, we usually name this scale model as market, which is actually originated from French and Italian languages. In graphic design business, we usually call the design prototype. With more cops in your eye or UX design field, we usually grow sketches off how the final you I design, we look like we call this early sketches. Esquire frames again. My point is, you may find people from different industries giving different names for prototypes, but Essentially, they are the same kind of thing. OK, now you might be wondering. Are prototypes only used for product testing? Well, actually, no. There are, at least for different purposes off why we create prototypes first, as we discussed earlier, it is for productive sting. Second, it is used to get capital or investment. Just imagine the scenario if you are an investor and there are several start ups pitching for your investment, but only one of them can show you the prototype. Which startup company are you going to invest toe? Most likely, you will pick the startup that can show you the prototype because you are more certain that it is not a scam and that the product will be more likely produced because you already see the proof that the company already offer come all of the technical aspect difficulties. It, er it is used for marketing and sales process. For example, in real estate for property development business, the developers can start selling apartments or houses even though the actual buildings are not yet built. They are selling the properties based on scale models and or through the images or three D animation, which is essentially just prototypes, and finally, it is used for a general project or a business agreement. For example, let's say you are in a clothing industry, a client company come to you and they want to order than 1000 uniforms for their employees . After your initial impression, design sketches approved. You don't create one set off uniform as a prototype. After that, you will have an agreement with the client company based on their prototype, meaning you are obliged to create 10,000 sets off uniform exactly like the greed prototype or otherwise. They won't pay you and cancel the order. So in this case, the prototype plays an important role as the common ground for the project agreement. Okay, for now, we are going to focus on the first purpose off prototyping, which is for product testing. The most important goal for product testing is to get customer feedback as early as possible. This is important to reduce the risk off product development floors and also can be used as a part off market evaluation process. We are going to discuss about all of this in depth in the next lesson, video 24. 01-20 Iterative Design: in this lesson video. We're going to discuss about it already for design process. Currently, we are still in the first chapter, discussing the for spiller off business, which is value creation. And we are now on a four sub chapter, which is product testing. Okay, we learned before about prototyping and importance off customers fit back in the early stage off product development, but we haven't discussed about the method or the workflow off how it is actually done for this. We're going to cover one off the business methodology called the Directive design, which is intensely involved. Things that we have learned previously, which is prototyping. Now remember, is I mentioned earlier that our course is not about methods. You need to understand the concept behind each steps off this iterated flee sign so later you can create your own method or workflow that precisely fits your own business. OK, so what is it? Theoretically sign? In essence, it directive. The sign is a design methodology based on a sigh click process off prototyping, testing, analysing and refining a product. Now I want you to understand that there are many names for this type off iteration process every industry may have their own names for this process. Some books, usually ICTY related books call it usability testing. Some people may call it product design synthesis. Others call it productive elopement cycle. And I read a book once, which cause it prototyping interational cycle Again, the names might be different with the core. Concepts are essentially the same. Okay, so the most basic and generic directive resigned. Workflow are these First is watch. Second is idea. Tour is select forth this implement and the less one is evaluated. Let's discuss each off. This process is one by one. First is watch in the watch process. We go and visit our prospect customers with our product prototypes. We then ask them to use the prototypes in a real product you staged scenario. There are several things that we need to make sure in order for the watch process to be successful force. In this process, it is important not to have any initial emotional connection with the users. So it is best that the users never knew us personally or any off the testing at all. Why Well, because if the user, already familiar with pass the test result may become bias as they may hesitate to tell the truth about our product. Second, when a customer used the product, we have to step back and just watch record and study what the user will do with the prototype. There should be no communication at all in this process between the user and the test team . We want to make sure that the user used the product. We don't any external help after the watch process is over. We need to move on toe idea process in this process. Essentially, we interview the user about haste or her experience when using the product prototype. The main goal off this idea process is to dig in even more information that is not very obvious in the watch process. The success key off idea process is to ask open and the questions basically not questions that generally produced yes and no answers But questions that forced the user hotel more story and to share what is going on in his or her mind. For example, don't ask questions like, Do you like the product or is the product easy to use? These kind of questions will restrict the answers and looking the user from telling you what really happens in hiss on her mind. So US questions that start with what? How? Why can you etcetera, for example? How do you know how to operate the product? Or what are you thinking when the first time you see the product or you seem a bit confused back, then can you tell us more about it? Etcetera? Just remember to ask questions about how to make the product become better for them. Okay, next is the select process. This is an internal process where our test team go back to the office and then we sit down and discuss all of the findings from the previous processes. At this stage, we should already have so many feedbacks from the customers about the current product prototype and things that can make it better. In this process, we need to filter the feedbacks into suffer or qualified feedbacks. Why we need to do this because off two reasons. First, mostly, we have limited budget for a production course. There is no way we can fulfill all off the demands from the customers fit back. We don't making the production cost bloated, which at the end make the products final price become too expensive. The second reason is you need to understand that sometimes people say something that is not actually true or something that is impossible to achieve. Or maybe they just have a bad day which cost them to throw curses and everything, including you. These other things that we need to deal with when interviewing people. So knowing which feedbacks are gold and which ones are just fresh is very important in this process. Okay, the next step is implement essentially, after we select all off the feedbacks that we want to work on in the previous process. It is time to go back to the drawing board to redesign our product, to make any necessary changes and then after that, recreate the prototype to reflect those changes. This process probably the longest process of all. After we have the new prototype, it is time to move on to the final process which is evaluation in this process. Basically, we need to test the prototype internally to very did, whether it is actually better than before or it is actually worse. Does it already comply to industry standards? Does it have all of the features requested as before and other quality control protocols. In this process, we get to decide whether we're going to either it again, back to the first watch process or stop and just mess produce the product and release it to the market. Mostly we need to either it the whole process several times to get the best prototyping results. You just need to remember this. The more reiterate, the better the product will get. And the faster we go through the iteration cycles, the faster we can take our product to the point off selling it in the market. Now this iteration process is super super important. But believe it or not, not many people are doing it. Many entrepreneurs just go with their gut feelings. Most off them like to think that they know what their customers one. But the truth is like 99 out off 100 they are wrong. I know this because I've been there. I have lost a lot of money again and again before because off floor products, because I forgot one simple thing and that is listening to my customers. I don't want you Tofail like I did, and I also don't want you to be like most people doing this needs Onley based on their instincts. Okay, 25. 01-21 Customer Feedback: in this lesson video, we're going to discuss about ways to get customer feedbacks. Currently, we are still in the fourth chapter discussing the first spiller off business, which is value creation. And we are now on the fourth sub chapter, which is a product testing okay, one off the biggest floors off many entrepreneurs Is that dating? They understand their customers. Believe me, this is almost never be the case. If you conduct customer feedback activity, you'll be amazed off how much valuable information you will get from the customers fit back . This is the best way, if not the only way you can make your product or your value become better and better over time. Now we've talked about prototyping and it ready for the sign workflow toe, get early customer feedback. All of these are important, especially if we are planning to produce hundreds or even 1,000,000 duplicates off the same product into the market. But what about other businesses that do not produce any product or just not make sense to create prototype out off it? Well, the basic idea is to understand what is inside our customers mind about our business, or about what we have to offer anything we can do to achieve. There is a method that we can try. Just make sure that it is proper and the validity off the data is accountable. Here are some example off methods that you can use to get customer feedback. We don't conducting iterative design process. I'm sure there are plenty other methods that you can find, but these three examples should be enough to get you started. The first method is very simple, which is asking questions to your customer. This method fits very well with surface based business, where we only have a handful off people as our clients. Most clients will be willing to answer the questions and help you out because they actually feel that you truly care for them. Unfortunately, this may sound strange, but not many people in the surface business are actually doing it again. This is because many business owners thing that they understand their customers. I'm sure if you can do this correctly in shallow, not only it will help you understand your clients better, but this will also make your clients eventually prefer to use your surface over the other competitors. For example, let's say you have a pool cleaning business after you, or your staff's cleaner clients. Swimming pool It will be great if you call the client a week after the cleaning, or perhaps three days after it, and us, him or her about the polls condition. You can then ask a lot of things. Such as. Are they satisfied with surface, whether the cleaning staffs are polite or not? Or are they doing the job professionally or sloppy again? It's I mentioned before open ended questions are always better in this situation. As a bonus, you can offer free cleaning surface. If somehow the client feels disappointed with the previous cleaning session, think off. It s your warranty off surface. Okay, now this can be applied to any surface based business such as graphic design, car surface, private courses, etcetera. The second method is by paying consultant companies who are specialized in customer research field. There are many examples for these one off. The example is being a Nusantara university, which is the university where I get my mustard agree. What they do is that they actually have consultant people pretending to be students and went through the process off enrollment from A to Z until they eventually become students. The consultant's study deeply it surface points and try to really experience what it's like to be a student in the Nano Santa University. OK, another example is McDonald franchise. If you have walked at McDonald, you probably already know that for every McDonald's outlet each month, at least twice a consultant comes to visit the outlet. These consultants don't wear in a uniform. Instead, day blend in and it and ring like any normal customers do. Because off this, the staff's never recognized this people as the consultants who actually caught on court spying on the outlet. The consultant's job is to out it the outlet for different assessment points such as the foods, the cleanliness, the hospitality, etcetera. Essentially, with this method, McDonalds management can understand how their business performs from the customers standpoint and making sure that the customer experience is always, at best. Another method which is more and more common. No days is through community involvement. This method is very common for certain type off businesses, which has customers that will naturally form online communities, for example, but not limited to our suffer. Companies like Adobe Autodesk, Microsoft etcetera. Because there are many functionalities inside the software, most users off the software feel more comfortable toe ask and discuss things in online forums. There are many customer feedbacks we can learn from this reading the discussions between these users. That is why many off this big software companies have a job position called community Manager. There are many responsibilities commissioned toe a community manager, and one off them is to understand the customer feedback about the product or the business. So those are some examples off how we can collect customers feedback. As new technologies emerge and people find more ways to interact with each other, who knows? Maybe in the future we may encounter more strange and unique ways to engage with our customers. 26. 01-22 Pre-sell Testing: in this lesson video we're going to discuss about pre sell testing. Currently, we are still in the first chapter discussing the first pillar off business, which is a value creation. And we are now on a four sub chapter, which is product testing. Okay, we have talked about the importance off customer feedback and also suffer all methods off getting customer fit backs in a previous lesson. Now there is one cutting eight customer feedback method that you might want to try, and that is freecell testing or also known as shadow testing. So what is pre sell testing? Well, most off us already know about pre selling, right? Essentially, pre cell is a process off selling something that is not exist yet or something that is still in development. You can find many off this pre sell strategy in real estate or property development. They are selling houses or apartments toe customers while in the process off building them in different industries. This practice is also known as pre ordering. Okay, now, Chris L testing take the concept off reselling or pre ordering toe the new level. The main goal off result testing is not actually to make sales, but to test whether the product or the idea often offer is viable or not. So basically, it is executed as a way to reduce or to minimise development risks. Off course, we are not trying to scam anyone with pre sell fasting. That is why you need to be ethical in the process. By being up front with your customers, you need to clearly explain that the offering is still in development. The basic idea is like this. If you can create a prototype off a product and show it to a lot of people, if this people say Wow or her, then give you the money to preorder it, we can really assure that the product will be a big hit in a market. Okay, so how can we do this Pre sell testing first, Of course, you need to have a prototype. It doesn't have to be a real working prototype. Even if you just have three D renderings off the product is enough. As long as the customers can clearly see and visualized the final product and the benefits off having the product after that, you need to set up lending page where people can actually see the prototype learned of values and then place an order for this purpose. Besides setting up the landing page yourself, you can also use online check out surfaces such as gum Road or use crowdfunding platforms such as Kickstarter or Indiegogo, etcetera. The next step is to define the success factor, although having riel purchase is the best success criteria. But you can also have different ways to define the success factor. If you are not comfortable taking people's money, perhaps just having customers to sign up their emails is enough for you. Or, if you are using crowdfunding platforms, perhaps you can simply count the number off people who break up your project. It really depends on your type of value or your business. After you define the type, you don't need to define the trace court number. For example, 1000 preorders or 10,000 emails, least for 5000 backers, etcetera. This will be your target number, meaning If you can manage to achieve this number, then you certainly will move on to actually produce the product. And also you need to specify the time frame. How long are you going to wait for all of these until you evaluate and decide the next step , the next step is to mark up your landing page from all off the processes. This might be the process which will require you to spend a lot of money. So yes, even though pre sell testing basic idea was to minimize the risk off losing a lot of money from product development, you do still need to spend money to market your landing page. Otherwise, people will never know that the pre selling offer even exist. After all off, these are done. The final step is to evaluate the results. Are you going to continue to develop the product or are you going to abandon it? Because the result doesn't really show enough hype? There are many examples off. Successful priests are testing strategy. One off them is The White Book. White Book is essentially arrange off products made off special paper that you can erase completely. Even if you are using pen on it, you can open their website at white book dot com. So the story off my book is like this. Frank Bouchard has a strange phobia off writing things down permanently on paper. He always wanted tohave erase ability. In all off his notes, he met Toby Morris when both off them took master degree at University off Ottawa. Back then, it was at the entrepreneur class that they need to come up with a viable business idea. And so this is where the first white book idea was born. They keep working and perfecting their prototype. They went to see a lot of people. They went to see students, teachers, engineers, artists is etcetera. Essentially, they are doing this as their iterative design process. And in November 2013 they decided to go life on Kickstarter as their final product validation and at the same time to rise small capital to finance the production turned out white boo waas a huge success. In just 24 hours, they meet their goal off, rising for $1000 within a month they raised $420,000. There is more than 100 times off their initial goal. Now White book can be found in stores across Canada, and they also ship why book products across different countries such as United States, Germany and even Australia, etcetera. Many entrepreneurs develop their products in secrecy mode. They strongly believe that their product ideas are brilliant and they are scared if other people steal their ideas because off this, they refuse to create any prototype. Moreover, to show the prototype to the world this believe and this secrecy strategy is not just plain wrong, but this will also put them in a very risky situation. You need to mark my word here, the biggest risk in business. It's not that other people steal your idea. The biggest race in business is that you spend a lot of money into making something that no one really wants to buy. Idea is cheap and hard to measure. No one in this world spent a lot of money just to buy a business idea. What is truly valuable is the execution off that idea. Even a simple and unattractive idea can be a huge business if executed. Very well. Take Make Donald, for example, What is so great about selling burgers or French fries? Idea. This is a lame idea. I mean, a lot of people already selling burgers and french fries, right, but with great execution, it can be a worldwide business. So again, I don't want your business in a phobia and secrecy mode, create prototype and get custom or feedbacks as early as possible. And one way to do this is through pre sell testing.