Transcripts
1. Critical First Step Introduction: According to the Small Business
Administration, the SBA, about 20% of new
business startups fail in the first year. That's 1.5, don't make
it past that first year. Now whether you're in
the process of starting an online business or a
brick-and-mortar business, or even developing
a new product idea, there is a one-step that
you can and must stake if you want to avoid being one of those new businesses that
fail in that first year. This is the most important step that you can take to ensuring both short-term and
long-term success for any new business
online or otherwise, this step is simple. You just need to validate
your new business idea. And the only way
to truly validate your idea is to validate
it with the actual people who would be most
likely to need and most likely be willing to pay for
your product or service. In this class, I'll show you step-by-step how
to do just that. And I'm going to take
it a step further to show you how to validate
your new business idea. While at the same time you're
building a foundation of customer knowledge that
will help you capture, convert, and retain customers
for your new business. Hi there, My name's Ken Vernon. I have started and managed more than 15 new businesses
and the past 40 years. And I'm here to share
the life lessons that I have learned as a
small business entrepreneur. My goal is to help you use succeed with your new
business by avoiding many of the landmines and issues I faced in building
my businesses. Now some of my
businesses generated multimillion dollar
revenue streams, while some were actually
complete failures. And one of my most painful
and expensive failures wasn't online product or
develop that failed as a result of me not putting
in the time and effort invalidating my idea with
the actual target market. I'll let my ego and input from those close to me,
cloud mom judgment. My decision to not go through the research and
validation efforts discussed in this class cost me a full year of time and a significant amount of investment capital
and new better. And I still made this mistake. So I put this class
together because I don't want you to make the
same mistake that I did. Now, this class will
help you either avoid a business failure
or allow you to go forward with
confidence of Success. Class, I'll go over six topics. Optimism Can Sabotage
Your Startup. The primary Factor of failure. The three Key Questions
that you must ask, how to Target and research, getting direct input and
documenting all that input. If you actually execute the steps discussed
in this class, you will develop
the knowledge of your target market
that will put you in a position to make
the hard decision on whether you move
forward with this idea. If your research doesn't indicate success for
your new business, you can decide whether to
step away from this idea completely or to make changes
to the idea and try again, I have personally
thought many of the battles and conquered many of the challenges that you will face as a small
business entrepreneur. And I am committed to
sharing all my experience to help you and your small
business startups succeed. But I also want your
input on whether or not this class was
helpful and your thoughts on how I can
improve the class to be more beneficial for small business entrepreneurs
like yourself, please take a moment at, after you go through
the class to provide a review with
your input and then follow me here on Skillshare
to be notified when I post more life lessons for
business in the future. Now, let's get started.
2. Optimism Can Sabotage Your New Business: Welcome to the first in my Critical First Step For
Starting a Business series, where I show you how to determine if your new
business will succeed or fail before you risk
your time and resources. If you're considering
starting your own business, whether it's online
or brick-and-mortar, there is one incredibly
important step that you can and must take at the
beginning of your journey. You need to validate your new business idea
before you take the risk, before you risk your time and harder and money on
that new business idea. The only way to truly
validate your idea is to validate it with
the actual people who would be most likely
to need and most likely to be willing to pay
for your product or service. My name is Ken Vernon and I am a life-long small
business entrepreneur. In this, my Critical
First Step For Starting a Business series, I will show you step-by-step how to validate that
new business idea. If you actually execute the steps discussed
in this class, you will develop a
level of knowledge of your target market and an understanding if
that market wants, needs and is willing to pay
for what you were selling. With that information, you can decide whether to step away from this idea completely or
make changes to the idea. Or if you get great
positive feedback, you can go forward
with confidence in your new business
idea and you'll have solid market research to help with funding or with
your investors. Doing this work also
lays a foundation for customer centric
businesses which are proven to be 60%
more profitable. Now, first, I want
to talk to you about your excitement about this
new business idea you have, because we need to
talk about that. Too much of a good thing
can be a bad thing. So the number one
reason people give for wanting to start a business
is to be their own boss. And a lot of people express this desire to be
their own boss, but most will actually
never take that leap. But with someone with the desire to take
control of their lab by starting their own business finally decides to
take that leap. There is usually a
tipping point or situation that drives
them to go for it. Many times, the seed for this tipping point
starts when they share their business idea with someone and the response
they get back is, wow, this is a great idea. Well, the wannabe entrepreneur
hears that and it immediately becomes part
of the inner dialogue, supports their new
business idea. They become optimistic
that they could actually start their own
business with this idea. This scenario is usually repeated with various
friends, family, and coworkers, and
every positive response to drive there
optimism higher and higher. Unfortunately, many
entrepreneurs become overly optimistic and they let that optimism Cloud their judgment. They become convinced that
they actually do have a great idea that just can't miss their optimism that there
New Business can't fail, drive them to move
forward without making the effort to do
the market research and gather the data
that is necessary to truly validate their
new business idea. While optimism is generally a valuable trade routes manures, optimism without a
certain level of pessimism can become
a fatal flaw. A 2018 study conducted
by Research at the London School of
Economics found that over-optimistic folks
are more likely to start ill-conceived
businesses that are doomed to failure
from the start. These failures begin when the entrepreneur basis
their initial business decision on an overly
optimistic view of their new business idea. This over-optimism is one of the motivating
factors that drive people to go all
in on their idea without taking the critical step of conducting a sufficient level of research with the
actual target market for their new business. The friends, family,
and coworkers that tell you you
have a great idea, most likely do not
fit the profile of actual customers and their
input will always be bar, to ensure the success of
any new business idea, it must be validated
by individuals who are actually in the target
market for the business. If you become overly
confident and decide to not conduct a thorough
market research initiative, you are gambling that
your new business will succeed and the odds
are not in your favor. You've just watched
the first video in my Critical First Step For Starting a Business
series where I'll show you how to determine if
your new business will succeed or fail before
you take the risk. If you have an idea
for a new business, you can probably relate to the overoptimistic
scenario that I presented. I hope you now understand how dangerous over
optimism can be when you're on the verge of committing
a significant amount of time and resources to
that new business idea. Optimism is good, but a good
entrepreneur will temper their optimism and
take the time to dig deeper and actually validate
their new business idea. Before they take that leap. A fail business can damage everything you've worked forward to this point in your life, both financially and personally. I want to help you
avoid that failure. If you have any
questions, comments, or issues you need help with, drop me an email and
I'll get back to you. My email is ken at laughed
lessons for business.com. In the next video, I will reveal the
primary Factor that can determine success or
failure of your new Startup
3. Primary Factor of Success or Failure: Welcome to lesson two
and my lesson series, the critical first
step or starting a business where
I show you how to determine if your
new business will succeed or fail before
you take the risk. In this lesson, I
introduce you to a gentleman by the
name of Bill grows. He's the founder of idea lab. Bill conducted
extensive research to determine the aspect of a start-up that was most influential in a startup
success or failure. You need to pay attention here, this is a core business
concept that can have the most significant impact on the success or failure
of your new business. The number one factor that influences success or failure of a startup was identified in research conducted
by Bill Gross, the founder of idea lab, and presented in
a 2015 TED Talk. Idea LAB is a
business incubator in California's started
by Bill in 1995. Since then, I did a lab, has incubated over
150 companies. From those experiences. Bill wanted to
determine what had the most influence on the success or failure
of a new business. He looked at five different
factors that he felt had the biggest effect on success
or failure of a startup. These factors were the
business concept and idea, the business operational model, the level of funding, the management team and
tanning to market bills. Research included all of
the Idea Lab companies plus an additional 100 startups or were not associated
with idea lab. And in the end, his research concluded
that timing to market was the most influential factor in determining the success or failure of a new business timing to market had more impact on the success or failure of a start-up than the
concept itself, the management team, the
amount of funding they had, or even their ability to execute
the business day to day. Being successful based
on timing to market means that when the
startup launch, there was an accessible
market made up of customers that had a need for
that product or service and we're
willing to pay for it. The understanding of the impact that timing to
market can have on your new business drives home the fact that you do not
control your customer, period, your customers,
or lack of customers, they'll make the final
decision on whether or not your new business
succeeds or fails. No matter how hard you work, no matter how much you invest, you will not succeed unless you have customers who
have a need for your product and are
willing to pay for it and pay a price that includes
the right amount of profit. That makes it even
more imperative for you to understand
your customers, to know your customers, you must understand
their needs and if your product or service can
address one of those needs. Now, in the next lesson of this critical first step or
starting a business series, I'll lay out the
three key questions that your market
research must answer. If you have any
questions, comments, or issues you need help with, just drop me an email and
I'll get back to you. My email is kin at lapp
lessons for business.com. That's life lessons, that
number for business.com. Now, let's watch,
listen three to see the three critical
questions that you need to answer before
starting any new business.
4. Three Key Questions: Hi there, I'm Ken Vernon
and this is less than three and back critical First Step For Starting a Business series, where I show you how to
determine if your new business will succeed or fail
before you take the risk, the market research
you undertake in order to validate your new
business concept, must answer these
three questions. Whatever you do,
make sure you had these answers before you
decide to take the leap. In order to determine if it is the right time to bring your product or
service to the market, there are three vitally
important questions that need to be answered. The answers to these three
questions must be honest, unbiased, and backed by
your market research. Question number one, is there an identifiable and
accessible market that has a need for the product? Now that's a
three-part question. Can you identify market? Can you access that market with your marketing
and messaging? And do they have a
need for the product? Question number
two, or those who had the need willing
to pay for it. And question number three, are they willing to pay a
price that includes a profit? If you do the market research to answer these three questions, you can then project a level of either success or failure
for your new business. Now let me repeat that. If you take the time to do the research to answer
these three questions, you will have an understanding
of the probability of success or failure of your new business before
you take the risk. Now, if it looks like a no-go, you must keep in mind
that a no-go decision, maybe the best decision
you'll ever make, saving you time, money, and lots of pain and suffering. Nogot is the right decision. I would highly recommend that
you accept it and move on. Now, if, on the other hand, you end up with
positive responses to all three of these
critical questions. You will now have the
confidence to take the next step and commit
to your new business idea. You just watched Lesson three of my critical First Step For Starting a new business series. Now, I've gotten some input on that class that says I
shouldn't tell people to stop. I was told that
potential entrepreneurs just simply don't
want to hear that. But this is a
critical point about starting a business that
I have to convey to you. If you do not find an audience that needs
your product or service, or an audience that
is willing to pay. Just remember, a no-go
decision may save you years of financial and
personal stress and pain. Small business
failure can be brutal and even more so on the
personal app of the founders, I want you and your new
business to be successful. So feel free to drop me an email with any
questions, comments, or issues you need help with
and I will get back to you. My email is ken at laughed
lessons for business.com. That's lap lessons, the
number for business.com. Now in the next lesson, I'll show you how to find the right target market
for your new business, hasta luego town to bring
your product or service? Excuse me. Pardon me. I know that I'm talking to
you, but pardon me anyway. Okay. Here we in
order to determine
5. Research and Target: Welcome to lesson four and my critical first step for
starting a business series. In lesson three, we reviewed the three questions your
market research must answer in order for you to have
an understanding of the probability of success or failure of your
new business concept. Now it's time to
find your audience. You need to identify your
target market or markets and get to work compiling this valuable customer research. Having a complete
customer profile can be a very powerful tool in
building your business success. Let's start by identifying
that primary target market. It's imperative that you do this outside of your personal network of friends, family,
or colleagues. As I discussed, most
entrepreneurs and small business owners
first convinced themselves or the value
of their new idea. Then they proceed to convince
those in their circle of friends and family that
the idea has value. The positive feedback from
friends and family then fuels unwarranted optimism in the new business
idea, your friends, family, and business
associates can easily become an echo chamber of false positive or
false negative input. To determine the validity
of your new business idea, you must identify and engage
with individuals that you believe will benefit from RBA customer of
your new startup. So the first step is to identify that primary
target market. And you start that process
by simply thinking and documenting what you think your primary customer would be. Use your knowledge and
experience along with some basic research
tool to help you identify a primary
target market. Your new business,
who is the person most likely to have a need
for your product or service? What need do they have that your product or service
will solve for them? Now your goal is to identify one or maybe more
potential target markets. Then you will do the
research that will give you the insight
to start building a customer profile or persona of your ideal customer,
your target market. You want to know as much
as possible about them. For this research, there are multiple sources that
you can utilize. Some of the primary ones
are the US Census Bureau, which you can get a wide
range of demographic data. You can also use social media audience data
tools such as Facebook, audience creation tool,
LinkedIn Campaign Manager. You can get psychographic data from sources such as Claritas. And if your market is
to other businesses, search industry buyer data from any industry resource
you can find. And as you do the
market research, you should be able to determine the market with the most
need for your product. Our actual level of need, what they're doing presently
to address that need, and what might convince them to use your product or service. If you take the time to fully identify and document
the demographics, the characteristics,
the needs, behaviors, attitudes, and motivations
of your ideal customer. You will develop a holistic
view of that ideal customer. And you can now work to find where those
customers are and engage directly with them to get input there in less than four. And my critical first
step for starting a business series where
I'll show you how to determine if your new
business will succeed or fail before you risk
your time and resources. Focused on the core concept
here, know your customer. Remember, you cannot
control your customer, but you can understand
your customer. Dig as deep as you want, create sub-markets
if you see them, the goal of all marketing is the right message to the right
person at the right time. And you can do that if
you know your customer. I want you and your new
business to be successful. So feel free to drop
me an email with any questions or comments or issues that you
need help with, and I will get back to you. My email is kin at laughed
lessons for business.com. That's live lessons, the
number four, business.com. And until the next
video, silhouette I go. One more thing about
market research. I wanted to show you the three free market
research resources that I use on a regular basis. So I've created a
new class here on Skillshare called market
research mastery. In this class, I show you
step-by-step how to use these valuable and free
resources for research data. So I encourage you to watch my market research mastery class once you've completed this one,
6. Get Direct Input: Hi there, I'm Ken
Vernon and this is less than five and my series, the Critical First Step and
starting a new business. And this is where the
rubber meets the road. You've thought out your concept, you've identified
the market that you believe has a need
for your concept. You know who they are and
you know where they are. It's time you go talk to
them and engage with them, show them what you got, and ask them if
they will buy it. If your research indicates
that you're identified target market may have a need or interest in your
product or service. And they're in a
segment that should be able to pay for your
product or service, then you need to engage directly with people who
are representative of that market and get
their response to your brand message,
product, or service. Remember in general, people are happy to give
their opinions. All you have to do
really is just ask. So you'll want to develop a list of questions
and topics that will provide you with the answers to the three vitally
important questions we discussed in lesson three, you want to understand
their deeds and if they think your product or service
can fulfill that knee, if not, then what would
fulfill that need? And are there changes that
you could make to Europe concept that will make it a
better solution for them, then you need to understand
if they would pay for a solution for their need
or for your actual product. And what do they think would be a fair price to pay
for that product? In order to get Direct Input, you must document your
new business idea or concept or product in a format that you can present to the individuals
you want input from. This can be a simple
PowerPoint presentation, or you can convert that PowerPoint presentation
into a video for their input or simply printed out to show in
low-tech environment. And if your idea is a product, the most optimal presentation
would be a prototype. But keep in mind, the goal is to get initial input without significant
investment or Risk. Be careful how much
time and effort you put into your initial
presentation ever concept, because it will
change once you have an overview of your
concept to present, get it in front
of individuals in your target market for
their response and input, your goals should be to get direct input from
each individual. You want unvarnished Input, not influenced by
what others say in a group setting,
including social media. But social media can
be a great low-cost or even free way to engage
your target market for input, but always focus on getting
direct individual input. Facebook is a great
place to start. The first step would be defined Facebook groups that
mirror your target market, join and participate in the
conversations in the group, always trying to add value. And as you participate
in these groups, you should be able to
identify indirectly approach individuals to ask for their input on your
new business idea. You can also create your
own Facebook group and recruit those in your target
market to participating, get input that way. Additionally, with
a small investment, you could utilize
Facebook ads to drive engagement with
your target market, encouraging them to take a survey or answer a
few poll questions. Other social media channels, such as Instagram or Twitter, can be utilized in a similar fashion to
engage and get input. If your target market
is other businesses, you can use LinkedIn and
execute similar tactics, participate in grids
and discussions in order to identify
individuals for input. And if your business concept
is a retail or a restaurant, the best thing for you to
do is get out there with a clipboard and engage with customers have
similar businesses. All you have to do is
look professional. Engage politely, ask. As I said, most people
are more than willing to share their opinions
and experiences. That was less than five in my Critical First
Step For Starting a Business series where
I show you how to determine if your new
business will succeed or fail before you risk your
time and resources, the efforts outlined
there are not easy and they can
be time-consuming. But if you can get
one-on-one with someone that's in your
primary target market. That is the gold standard
for your market research. The next and last video on my Critical First Step For
Starting a Business series. I'll talk about the
value of all of this pre-launch market
research that you've conducted with individuals
that fit your target market. And how important it is to document that research
and how you can put that research to use today and every day that
you are in business. As always, feel free to
drop me an email with any questions or comments or issues that you need help with. And I'll get back to you. My email is ken at laughed
lessons for business.com, be sure to watch less than sick, which is the final lesson in this critical First
Step For Starting a Business series that's
coming up next, hasta luego
7. Document All Input: This is the sixth
and final lesson in my critical first step for
starting a business series, where I'll show you how to determine if your
new business will succeed or fail before you
risk your time and resources. In the previous lessons, we've learned how to avoid the risk of being
overoptimistic. We've identified and
research our target market. And most importantly,
we've engaged directly with individuals
in that target market, gotten their input on the three critical
questions that need to be answered in order for
us to determine if our concept will
succeed or fail. At this point, you need to
make sure you've captured and documented everything that
you've done to this point. Who your target market is, the need that you've
established with that market, and what the market will be willing to pay for your product. This is all incredibly valuable
information and must be documented and organize both for your own analysis
and decision-making, but also to validate
your concept for any funding efforts
that you engage in. As you engage with
individuals and new target market
and gather input, it is imperative that you
document everything in detail. Now, I've provided a
Google Sheets template for capturing the input from individuals in your
target market. Make a copy of this
template and use it to log all input you get with your researching
engagement efforts. Your goal is to understand
the needs of your customers and if and how your product or service could
address those needs. If the input is negative, you need to know
what you can do to improve your product
in a manner that could turn the customer's
perception around to be positive about your
product or service. And also, if you're utilizing the persona customer
profile template provided to create a
realistic representation of your target market. Be sure to update
your customer profile with any additional
information found when engaging in getting
input directly from those individuals in your
primary target market. In addition to your
target market research, I recommend that you also take the time and make the
effort to compile an overview of the
market landscape that you intend to compete in, including any direct or related competition
that you find. Who is or will be
your competition. What are your competitors real or perceived
differentiators? And how are they messaging to the target market that you're targeting as a best practice, I would recommend conducting
your competitive research before you engage with individuals
in your target market. This would allow you to include specific questions to
help you determine how your competitors are perceived
by your target market and what you could do to be
seen as better and different. I've also provided a
Google Sheets template for capturing competitive
research data, the customer profiles
or persona's you've created along with the
detailed input that you've obtained through
direct engagement with individuals in your
target market will provide you with a
clear view of the potential or lack of potential
for your new business, remember, if your research
indicates failure, do not hesitate to stop and halt all of your
efforts immediately. Do not let your ego or false optimism cloud
that decision. Avoiding the pain and loss
of a business failure is invaluable if the input gathered in your
research is positive, you can now move forward with
confidence that you have a chance for success with
your new business concept. Market research that indicates your business will succeed can also be used to support any efforts for
funding or investments, or even partnership that you undertake as you move forward
with your new business, I strongly encourage you to
utilize your research of your customers to support and influence all of your
business decision. With this document and research, you will have a foundation for a customer-centric business. And if you build on
that foundation through ongoing customer
engagement and input, you have the opportunity
to build a successful, profitable, and
long-lasting company. Thanks for watching the
sixth and final lesson in my critical first step, we're starting a business series where I show you
how to determine if your new business
will succeed or fail before you risk your
time and resources, building a successful
business can be an exciting and
rewarding experience. You can build your own job
and career and you can even create a legacy
for your family. But on the flip side, a small business failure can and will wreak havoc in your life, both financially and personally. Trust me, failure is
not fun for anyone, but now you have a roadmap to help you develop an
understanding of your target market and
the potential or lack thereof for success
with your new business. With that understanding,
you'll be able to make an
informed decision about the next steps for you on your
entrepreneurial journey. If your concept is validated, you can move forward
with competence. And if not, you can either
make changes and try again, or make the wise
choice to step away. I wish you the best of luck, whatever your decision is. Now, if you have any questions
now or in the future, please don't hesitate to reach out and I'll do my best to help. The whole reason I'm creating these videos is so that
you can be successful with your small business and
hopefully avoid some of the mistakes and
problems that I ran into throughout my career. Feel free to drop me an email with any
questions, comments, or issues that you
need help with, and I will get back to you. My email is kin and laughed
lessons for business.com. That's can at laughed lessened the number for business.com. I really do want to
help you and your new business succeed
until the next time. I still love Lego
8. Let's Review: If you take the time
to execute the tactics and strategies I just
presented in this class, you will have identified
customers most likely to need and purchase
your product or service. You will have done the
market research to have a good understanding of that customer's wants,
needs and preferences. And documented that in a detailed persona
or customer profile. You will have engaged
with individuals that fit your customer profile for direct input on your
product or service. And validated that there is a market with a need
for your product. In a market that is willing
to purchase your product at a price that includes a
level of acceptable profit. With this knowledge and input, you are now equipped with a solid understanding of
what your customer wants. You have input on
how individuals in your target market perceive
your product or service. With this information,
you are now equipped to make an
informed decision to either go forward with
your plans to open this business or shut it down and go in a
different direction. This is the critical
decision that you must make. But armed with customer
knowledge and input, you can determine
the probability of success or failure of
your new business. If the indications are that your new business
will succeed, you can confidently move forward with launching
your new business idea. And you'll have that solid foundation
of customer knowledge and understanding that will
help drive customer focus, product development,
marketing, and messaging. Working from your
customer's viewpoint will always give you the best
chance for converting leads into customers creating the opportunity for survival
of your new business
9. Next Steps: If you're ready to find out if your new business idea
will succeed or fail, follow these seven
steps and execute them using the information that
I provided in the class, you'll develop a
complete picture of your target market and their likelihood of
buying your product. I'm providing you with access to a persona or customer
profile template, Google Sheets
template for use in capturing input from
multiple individuals. If you do this work and
gain this knowledge, it will be the
critical first step in your path to launching a
successful small business. The initial steps
for this project, our first identify
your target market, then research and creates
specific customer persona's or customer profiles for the
market or even sub markets. Then research the
market landscape overall for and look for
potential competitors. Develop your idea to
a point where it can be presented and
described others. Develop a price range for your product that you think
would be appropriate. Then review your products
and services with the individuals that fit those personas of
your target market. And with that, you're going
to get feedback and input that you use to either
change, adjust, or improve your
product or service and to make them more
important decisions of moving forward with your new business or starting
over with a new idea. Thanks for watching the
lessons in this class. Please don't forget
to provide your input on the class and then review
section here on Skillshare. And be sure to follow
me on Skillshare, to watch for additional classes, teaching laugh
lessons for Business. I'm converting and I'll
see you in the next class.
Ken Vernon, Life Lessons 4 Business
