1059

25

Business Idea Summary Worksheet (NEW)

Business Idea Summary Worksheet

I noticed quite a few student projects listed here are having a hard time explaining their idea and the impact they want it to have.

So I'm sharing a worksheet I created back in June after listening to a talk by Sean K. Murphy (skmurphy.com), advisor to tech startups.

The worksheet is in Microsoft Word format, so you can type in your answers and expand it to include as much detail as you like, but it is designed to get you to think through the problem and solution scenarios of your marketplace and customers, giving you a framework to succinctly describe your business, much like an elevator pitch might simplify the message while including the important parts.

You can download the worksheet here:

http://www.waztech.com/Business-Idea-Summary-Framework.doc

I hope you find it useful.

Previous Content:

Brain Dump of Seth Godin's Startup School 2012 Oct NYC

While you are waiting for this class to begin, you can read my brain dump of notes I took while listening to podcast recordings of Seth Godin's Startup School from Oct 2012 in NYC.

these notes can help trigger some idas for discussion and help you formulate specific questions to ask Seth during the class.

Seth Godin’s

Startup School

10/09/2012

 

creating value

they pay you $X, because they think it is worth more than $X, otherwise they would keep their $X for themselves.

 

all marketing is telling a story about the value you create, in a compelling way that energizes your prospect to take action to give you money.

 

figure out your story – how you create value,

how to tell your story,

who do you tell it to

 

you want to have a monopoly on the brand name (your brand means something that no one else can copy),

a monopoly on the story (no one else can tell that story – it’s your story),

a monopoly on people’s expectations of what they will get (Domino’s = fast pizza),

a monopoly on location ( you want to be able to keep competitors out of your market so you can charge a premium and make high profit)

 

getting someone to pay attention to you – one on one

start with a questions that puts doubt into their head, makes them realize they may have this problem, and therefore will listen o your ideas for a solution.

 

 

 

connection economy – connecting one person to another person

 

in 1918 there were 2,300 car companies

 

entrepreneur = makes a system that can operate and grow without you doing all the work.

a machine / process that can be operated by others.

 

business plan lets you see a path to being able to succeed, more than fail.

 

hard part is doing the scary thing to stick to the plan and path.

it’s frightening, difficult, not much support, hard to stick with it when not many other people are doing it that way.

 

biggest source of un-happiness is not knowing the difference between being a freelancer versus an entrepreneur, and not being able to commit to one of them.

a freelancer does not make money unless they are working.

an entrepreneur builds a machine that makes money without them being there doing the work.

 

if you think you are an entrepreneur, but you are really a freelancer, you will be unhappy that you have to constantly work to earn income. if you are an entrepreneur who tries to do the work of the business, you will be unhappy that your business is not growing (because you are doing the work, not hiring others to do the work while you working on the business machine)

 

consultant –

1. are you smart enough to give good advice?

2. do people trust you enough to pay you to give them good advice?

 

your big question is “how do I want to change my world?”

 

do you want to do something you love to do that earns you a decent living?

or do you want to do something that improves much more than just your life?

 

you need to know what you are trying to do, and why you are doing it

what do you think the opportunity is?

because when it’s hard, you’ll be tempted to give up

so you need those reasons to keep you motivated.

 

if your lizard brain keeps you away from opportunities you perceive as dangerous, you’ll have a hard time.

 

it depends:

what are you telling yourself

and what are you afraid of

 

questions:

 

1. who is your product for?

2. what do those people believe (their view of the world), what is the story they tell themselves, what do they believe about your market ? you can meet with one person who has a worldview that they see potential in what you are trying to do, and they will love it and buy it, then you can meet with another person who has a worldview that sees what you are trying to do as a threat to them, and they can make every excuse not to buy it. You have to figure out who is which, and avoid the bad ones.

3. have these people ever spent cash money before on what you are selling? trying to sell to virgins is a lot more difficult.

as aside: 3 revenue types:

- cash (their own money or their businesses / bosses money)

- attention & trust (i.e. they give you attention and you earn money by selling advertising which they look at in exchange for your product / service)

- referral – they pay you by telling other people about you, speading the word, advertising you to their circle.

4. if they are aware of you, do they TRUST you enough to buy from you? maybe on a website, you have 3 seconds to impress someone. if you get them to subscribe and then you can demonstrate that you are trustworthy over time, then you won’t be a stranger anymore and they will trust you.

if a business is buying from you, the buyer is wondering if this will make my boss happy?

the boss will need to be aware of you and have some basic trust in you

5.

are you connecting 1 person to another person? – a community of people with shared interests

are you connecting 1 customer to the product you make? – a manufacturer / owner relationship

are you connecting 1 kind of customer to another kind of customer? – a marketplace buyer / seller relationship

 

 

episode 3

 

doing business with you = hiring your product to solve a problem

 

if I trust you enough, I will listen to your story

I’ve heard your story, I trust it, do I want to buy it to solve my problem?

we always buy because we believe it will solve our problem

 

the placebo effect – you feel better, but not as a direct effect of something. you buy a $100 haircut vs a $30 haircut, you feel better because you perceive the more expensive haircut makes you look better, and then you have more confidence which give you other benefits like closing a sale.

 

difference between manipulation vs marketing

manipulation – I get you to buy something that you regret later

marketing – you are glad you bought it long after the sale

because it is more than just the product, it is the feeling of owning the product

 

the story telling is what gets the prospect to want the feeling that your product is giving them

 

think of the way the internet caught on with businesses. they heard some story of someone making a bunch of money from their website, and they perceived the benefit it could give them (making lots of money for little cost) and they wanted it.

the reality is usually the opposite, but we are talking about the prospects imagination – that is what converts your story into the feeling of desire.

 

your story, does the prospect trust you, is your story believable,

 

if they have just met you, they don’t know you yet, their trust is based on visual and / or audible cues. the way you look / dress, and sound. If you come across as successful and confident, and that matches their internal concept of success and trust, then they will trust you.

 

lock-in effect, prevents switching from one product to another. hi cost of switching

sometimes emotional – you have to admit that you were wrong and you have to switch. many people can’t do that because it will make them appear weak.

 

the app marketplace – if you make an app you are a needle in a haystack. how do you stick out, how do you get found? you need to build-in social sharing as part of the app. i.e. if you need to get other people involved with the app, to get them to buy into the app and download use the app, then the apps user count will increase organically. 

 

don’t build something that won’t work. you’ll waste your time.

 

the magic of the internet is the network effect – everyone is connected together. if you have email, but no one else does, then it’s worthless to you.

 

you have to know and understand the problems that your prospect / customer is having – what do they think of when they wake up in the morning – i.e. “how do I make money today?” or “If I had a list of prospects I could call on, it would increase my chances of making money today.” then when you call on them and you say “I have a way that will increase your chances of making a sale” then they will listen to you.

it all comes back to the basics:

do they trust you, will they listen to your story, does your story resonate enough with them that they are willing to give it a try?

 

in the future, you want to be providing more than a product or service. you want to be providing something more valuable that helps your customer: i.e. information, tips, data, things that help them grow their business more. because once you move out of the provider of a service trap, here you can easily be bumped out by someone undercutting your price, when you are seen by the customer as someone who provides something of value that cannot be replaced by someone else’s product. then you have established high switching cost, the lock-in effect.

 

what is the hard part of your business? if your business is not hard, then you don’t have a real business, because other people could simply copy what you are doing, and put you out of business. the easy part is probably building the product or delivery the service. the hard part is often being known, selling the product, being trusted, creating some feeling that people want and can’t live without.

 

scarcity is the only thing worth paying for, because if you create something but everyone already has it, then there is no reason to buy it. but if no one else has what you have created, then people have to buy it from you. without scarcity, it’s a race to the bottom of cutting costs until you go out of business.

 

ask “what am I doing here that is both hard and scarce?”

 

as I use this product or service, does it become more valuable, or less valuable?

as it scales, does that make it better or worse? in some cases it is more valuable to be the only one that has something, i.e. a big fish in a small pond, in other cases the more people who have something and use it, the better it is, i.e. the more people you have connected together the more valuable the group is.

 

competition:

you want to have competition, for two reasons. 1. competition shows that the marketplace is large enough to attract other competitors to want a piece of it. 2. competitors drive you to work harder at making a better product, which makes your customers happier.

 

tribes:

we are hardwired to do similar things other people are doing. if a large enough group of people are doing something, others will join and follow. tribes are a collection of those people.

 

 

episode 4

 

there is an amount of money you are willing to pay to get a customer

and you know the amount of money you can make off that person, per sale, one time, or lifetime

 

if the act of doing your business can attract new customers to your business, you can save money advertising.

 

what group of buyers are you targeting? early adopters, masses, last buyers (they only buy when they have to)

 

you need to make sure your business will survive depending on who you target, and if your business will only work if you have the masses buying your product / service.

 

the better product doesn’t always win

 

by being exclusive, restaurant has a monopoly on certain type of people wanting a certain type of eating experience. tribe. tribe leaders = influencers.

in restaurant dining you usually go out with other people too. word spreads.

 

it is not for everyone. if you don’t like it, don’t come back. that goes against what most entrepreneurs stand for.

 

you do need to have a good quality product that gets good reviews from people.

 

the small group using it raves about it, this attracts attention from others, someone who has influence. they write a review which attracts more people. the restaurant also has cornered the rating system, because they are the only restaurant in a category (marketing – create your own category), so they get high ratings by default, because they are the only ones in the category.

 

competitors try to duplicate it. but it lacks exclusivity. it needs something unique. it needs the big thrill. it needs the organic growth to make it popular.

 

on a personal level:

picking something, anything, is always better than picking nothing because you are afraid it may not be right.

 

you need to structure your business so it fits the way you work best. if you are the kind of person that needs something new to do every hour because it keeps you alert and excited, then do something where you are working with someone new every hour, like a consultant.

 

 

episode 5

10/29/2012

 

Entrepreneurs by nature are:

willful, strong willed

bullheaded

committed

 

but don’t get hung up on sticking with the wrong path if it’s not working

 

you can’t wait until you have the whole picture of where you are going. you have to start in the direction of your idea / vision, and make course corrections as you go.

 

by using a blog and building up your voice, and the story you want to tell, you attract followers to your cause and develop trust among your followers. once you have 1,000 followers you will never be at a lose for a job, etc. because you have people listening to you who care about you.

 

you need to have courage

 

start with people who value the thing you do, instead of pretending you are bigger than you really are

 

what are people paying for? can I dramatically increase their results with my product / service?

 

how do you find those people?

 

 

 

 

 

episode 6

 

using advertising as source of revenue

 

 

marketing curve: think of a dinosaur

short head = the big leaders, fighting for the attention of the masses

long tail = a large number of people divided into small groups, i.e. 4 million people, but 40,000 groups interested in 1 particular topic, i.e. 100 people interested in 1 topic, and you can easily reach them and have a better chance of making money off them.

 

as a small marketer, it is easier for you in the long tail section, because you don’t have to spend as much money to get the attention of people, you can get the attention of “enough” people to make “some money”, without needing to spend huge sums of money, which may fail to produce results.

 

when you have a captive audience like that, you have a monopoly on their attention, something no one else has. therefore you can control and dictate the terms of interacting with your audience, which is how you sell advertising the right way. you don’t want to be getting price pressure from advertisers, you want them to be obsessed with getting their ads on your show because you have a dedicated captive audience who is so interested in your content that they are willing to sit through advertisements in order to get the content. so they will listen to the ads, as they wait for the next set of content, and advertisers want people to hear their adverts. advertisers want to reach a narrow niche of people who they know will be interested in their product and what they have to say “the story they are telling”

 

the scarce part is attention and trust

 

the long tail rewards indispensible micro culture (good content for a small focused niche)

 

the challenge becomes “How do I get to a micro group that is eager to hear from me and pay me with their attention or pay me with their money?”

 

 

business foundation must be solid & stable

 

when you are asking people to get involved with you

you must start by telling them the foundation items:

this is my business – describe how it works

my goal

my timeline

the money I have

why it’s going to work

 

layout the foundational structure

nobody cares WHY you are doing it,

they care about “why would they want to be part of it?”

“why would they want to pay you for it?”

they are selfish

they might do it because they feel good when they are being part of what you are doing

 

 

investors

anyone who invests in you is doing it because they want their money back, and then some profit for risking their capital.

 

when they become a partial owner in your company, the only way they get their money back is when the company is sold, and they get a part of the sale. or you have to buy their portion from them, and provide them with enough profit for them to agree to sell it.- if you are failing, you won’t have any profit to pay them.

 

the other option is to get people to loan you money, and you give them the first X amount of dollars in profits. i.e. they invest $10,000, the get the first $15,000 in profits, then you keep the rest. if the business succeeds, you make money, if it fails they get whatever they can, you get nothing (but experience).

 

 

Tribes – collections of people gathered around a common idea that resonates with them.

 

Use filters when beginning the introduction (talking to people) to figure out if they understand these “secret handshakes” to determine if they are in the tribe. Once you know they are in the tribe, and you can trust them and they can trust you, then you can move forward with the next step, i.e. selling to someone inviting them into the group, etc.

 

this also works when using well know people and companies as influencers to show endorsements of your product, and once the tribe knows this endorsement, they will buy your product because you have eliminated the risk of doing something unknown / unproven. instant trust

 

 

what is the hard part of your business?

the hard part is getting people to buy your product, they need to trust you before they interact with you. so use influencers as trust builders. focus on finding and getting influencers to use your product and gain their endorsement.

 

 

your challenge is how to get past the things that are holding you back.

sometime it is the work you’ve already done that was wrong, and you need to get rid of it, but you hesitate to do that because you have invested so much in it already…

sometimes you’ve only worked on the easy things, but you were supposed to work on the hard things because those are the most important things to get done first, get those hard things out of the way.

 

 

tell them a story that matches their worldview, meaning something that will resonate with them, get them excited about it, makes them want to participate. worldview means what their world is like, what is important to them.

 

bob carver, the audiofile amplifier inventor, his story is I’ma smart guy and I made a really good amplifier & you should buy it. but that is not the important part. the important part is HOW IT MAKES THE OWNER FEEL ABOUT THEIR PURCHASE, and what activities the owner does with and around their purchase, ie. the showoff, the discussion, the “I’m better than you because I own this, and you don’t”

 

bob carver has a reputation, and trust, because of his previous successes. he tells his story in words and pictures, then his customers repeat that story the best they can to other people in their tribe, which spreads the word and gets Bob new customers. interacting with the product (changing tubes to get a slightly different sound) is fun and makes something interesting to talk about with other people in the tribe, which solves the “loneliness” problem.

 

thousands of tribes, eager to connect with others with the same interests, so give them something to talk about. give them a story they can share.

 

 

we could each stand up and tell someone else’s story, and there would not be as much risk, no criticism etc., because if we tell it wrong, it’s not us who is hurt, it’s the other person who started the story. but when it’s our story, we face much more of a risk if it’s not told the best way, we don’t want it to fail, etc.  so to avoid that hurt, we put up shields and softeners, but that ruins our story. so you have to remove yourself from that risk by being an actor, whose job is to tell the authors story in a way that persuades us that the story is right. or if it’s not right, then allow us to give you tips on how to improve the story so it persuades better.

 

 

 

 

 

 

impresario business:

we put on a show, that is how we interact with people, get people to buy our “stuff” we tell them a story that gets them interested in our “stuff” and makes them want to buy it.

you make something happen that wasn’t happening before you got there.

 

 

EPISODE 7

 

who is the customer, and why are they going to give you money?

 

you don’t need the mass market, you only need the passionate people, because they are more interested and willing to pay for the thing they want, that no one else is giving them.

 

advertising:

most buyers of ads don’t care if it works in terms of views, clicks, etc because then they would need to admit if an ad failed to live up to it’s potential. that is why they buy tv ads, because they can’t be accurately measured. they only care about the result of the ad. did sales go up after the ad campaign was run?

 

the people buying metered ads and paying attention to the views and click through know how to measure and know the value of a customer and how it can be tracked from the view to the click to the purchase.

 

don’t try to sell ad service based on the number of views or click throughs. focus on the results the ad brings, how much sales did it generate?

 

false objections:

reason someone gives to get you to go away because they are afraid to say yes (unsure if it is safe), and afraid to say no (afraid to say they are unsure), so they lie to get you to go away.

 

they only buy advertising that their boss wants (an ad equivalent to superbowl)

 

if they are asking “what is the click through rate?”, they are only looking for a reason to make an objection and say no. they don’t trust it enough to take a chance and try it and see what the result is.

 

many times they will buy an ad so they can brag and say “I bought an ad on twitter (or facebook). they are not doing it because of the results, because they get no results. they don’t even know how to make an advertisement that gets results.

 

the whole advertising industry is fueled by this irrational ego buying, ie they are buying ads because it makes them feel important, not because the ads work.

when that changes the ad industry will collapse because so much of it doesn’t work.

 

this is done by companies in the Branding Phase, getting their brand name in front of as many people as possible.

if ads are bought by companies that earn money from the ad, i.e. they run the ad and get 100 sales, and the ad costs less than the profit they made, then they continue to run the ad. as long as there is a return on investment, they run it.

 

think about Hubspot. they run an ad that gets you to sign up for a free report. they get your email address, then send you through their funnel. they know for every 100 people thru their funnel they get 5 people to buy their product. 5 people at $500 = $2500. as long as the ad cost less than the profit they make from those 5 people, the ad was a success.

 

branding is about burning that image and that meaning into your memory, so when the time comes to make a buying decision, all those years of seeing that ad image (logo) and understanding what it means pops into your memory, and that influences your decision.

 

competitors:

learn about your competitors to find out what is going on in the marketplace. use Google to find out how many people talk about them, how many love them, how many hate having to buy from them. this tells you how big the market is, and if you have an opportunity to grab some of those customers.

 

next you need to find out why those customers would move to you, how do you need to be in order to interest those customers, what do they want, what do you have or can create so they will buy from you?

 

you can do some test buying to find out what it is like to be their customer. you can plan how you might make it better.

 

how can you be different so you serve some part of their market that they are not satisfying?

 

if the market is big enough you can afford to lose some prospects by running experiments during sales calls to test your positioning and sales tactics. if they don’t work then you’ve learned something about your approach and you need to change it.

 

if the market is smaller and you can’t afford to lose any prospects, then you need to use a customer discovery approach to figure out how you might penetrate their market and gain their business.

 

customer discovery:

you go to people and say “hey I love this industry, and I want to understand where your pain is, so I can help solve those problems and make this a better industry”. then you get people talking and you start the customer discovery process. they probably won’t tell you directly what their problem is, but you can listen to what they say and figure out the pains from the symptoms they are talking about.

 

 

 

Comments

Please sign in or sign up to comment.