As part of a special series we have partnered with The Six Day Business to help you start your brand. Read the Introduction and Part 1 first. You’ll need a pen and paper to fill out this section. Each question has two parts – the description and the question that you need to answer.
DAY TWO – PROTOTYPE AND SAMPLING
As you make a prototype, assume you are right andeveryone else is wrong. When you share your prototype,assume you are wrong and everyone else is right.”– Diego Rodriguez Telechea
Day Two is where you bring your idea to life. You will need pen and paper, a computer, your full range of creativity, examples of past work and lots of stamina (it’s a long day!).
Day Two is when your idea will move from concept to reality. This step is where most entrepreneurs spend most of their time when starting a business. ‘If I build it, they will come’is what we call this mentality—and it’s wrong. What you need to do is quickly create and explain an example (prototype) of what you are planning to do, and then effectively communicate this vision to potential customers.
Baxter House offers a full sampling service that can help bring your sketches and prototypes to life. Get in touch to find out more.
Obviously there are situations where you won’t be able to create a full concept in a day—a restaurant comes to mind. However in a day you can create a dummy menu, cook three items from it, write out your story, and then invite a group of friends around to sample the food and hear your positioning. You will need to think laterally and pick key elements of your business—we call these the key features.
We provide many examples below to get you thinking, but we have deliberately left this as one day—a tiny amount of time in the grand scheme of things. This short time span will force you to focus, create a basic example of your idea to then explain to your target market.
The goal of this process is have your potential customers buy-in on the overall concept, and not a finished product. It is true that first impressions are important, however it is just as important to test ‘first impressions’ with a small group of people to get their feedback and iterate from there.
If you are on Baxter House it is safe to assume that your business is a product based business. Before we move on it is good to recap the difference between a product and service.
- Fills a need or want for the customer
- Takes many forms
- Easy to compare quality
- Easy to return
- Can be kept in stock for a period of time
- Heavily based on building trust and a relationship over time.
- Takes a single form
- Hard to compare quality
- Hard to return
- It is gone if not sold today
COST, VALUE, AND PRICE
Understanding the difference between value and cost will help increase profitability in the long run. The cost of your service or product is the amount of money you need to spend to produce it. The price is the reward that you receive for providing this service or product. The value is the perceived benefit that your customer believes the product or service is worth.
You always want to focus on the value that you can provide, and not on the price that you are charging. Unless you know that you can undercut your competitors significantly, and that your customers are purchasing purely on price, it is a risky strategy to compete on price.
In the next step we will look at discovering what your value is, and then in Day Three we will figure out how to communicate that value. We will come back to pricing at the end of the day.
2.2 – DETERMINING YOUR VALUE
What is the one key feature that you will offer first?
It has been proven that consumers hate choice. Logically we believe that if there is more on offer, more will be sold.
This is incorrect and is called the paradox of choice.
The paradox of choice indicates that when there are too many options, people are paralysed by choice, and therefore less likely to purchase anything. As you are testing your idea, choose one key feature or product and focus on providing as much value for your customers through this. As you grow, you will find that more features and products are being asked for—it will be up to you to decide whether there is actually a demand for this, or if would just be a ‘nice to have’for your clients.
Your key feature could be based around:
2.3 – PRESENTING THE KEY FEATURE OF YOUR IDEA
Now that you’ve decided on what your key feature is, next you’ll focus on how to present it. Remember that you need your clients to understand your key feature, and how you present it will influence how they perceive your product or service.
- Breadmaker who loves sourdough. Instead of opening up a shop he focussed on baking the best sourdough loaves and delivering them straight to the consumer. Baked 20 loaves and took them in to the office to share with colleagues.
- Accountant who only works with customers in the retail market. Creates a simple one-page website explaining why he is an expert in the retail market.
- Shoemaker who uses one material and makes two styles of shoes. Their value proposition is clear—made from a sustainable material and made in a number of colours, it polarises customers (in a good way) who will either identify with the brand, or decide it’s not for them.
- T-Shirt designer who creates their designs online and then prints out samples using a fulfillment company.
- Wallpaper Company that finds niche designs from the 1940s and prints them out on high quality paper. Shows renders of how a room would look with the wallpaper.
- Designer can collect examples of current work in one place. Expand previous design work—if they made a logo for a client, they can spend a few hours expanding that to a full brand identity and show what it would look like on a website.
- Blogger that writes one chapter from an article themselves and ask a writer friend to also contribute. Create presentation that explains target market, why they are different, and what will be covered on the blog. Come up with a tagline “Like the New Yorker for the German speaking markets.”
- Stationery Brand that finds high quality paper stock and prints their designs on them. Find envelopes and plastic sleeves and package them in groups of 5 or sold individually.
- Furniture Refurbisher who visits eBay and local charity shops to find pieces in need of some restoration. Restore in their own style. Take photos on location in your apartment or house and list online.
Below are more ideas of how to present your idea:
- Images from previous jobs
- Examples of work
- Information you’ve already sent to family and friends.
- Case studies
What if I don’t have enough to show yet?
In some cases you won’t be able to produce enough on this day to comprehensively show what you have to offer.
To add more information to your brand idea you can look back at the list of brands (exercise 1.3) that you admire in day one and look at what appeals from their imagery, products or pricing. From this you can find images on the web that accurately support the brand image you are going for. This could be a stock image, or use complimentary images from other brands that show what you are going for.
You can also use a simple association exercise to help your clients visualise what your idea will be like. Now that you are thinking of starting a business you will hear this everywhere: “I am the uber for dog grooming’or ‘I am like the airbnb for hosting events.’These two examples sound ridiculous (they’re not far off some of the ideas I’ve heard though) but use them as a basis to explain your concept. You can also use some of the following terms to quickly communicate look and feel.
- I will use the tone of voice that X uses.
- My brand imagery will be like Y
- My pricing will be less than Z
- I will be in the same bracket of the market as W.
- I’m going to compete against L but be better/faster/better value than them.
2.4 – HOW TO SET YOUR RETAIL PRICE
Knowing how much money you are making for each unit (either item or time) is key to running a successful business. As with the whole book we are going to boil this day down to its key elements, one of which is knowing how much profit you are making on each item you sell.
It’s a simple calculation:
You will not need to know exactly what your retail price, profit and cost of goods are right now, but having a rough idea when you talk to your potential clients is key. Baxter House can help you
The important thing to remember is that your COGS needs to be lower than your retail price. The larger the gap between COGS and retail price, the more money you’ll be making before other operating expenses (salaries, marketing, interest, tax, depreciation, amortisation—which are not covered in this book but are good to be aware of).
Having a retail price in mind when you go to market is important because it will allow you to gauge how you are positioned in relation to your competitors.
When speaking to prospective clients in Day Five you will want to focus on the value that you provide. A commonly used phrase is that ‘cost is only an issue in the absence of value.’However we also know that when you first start talking about your idea it will be tough to completely describe your value to a point where someone doesn’t care about the price. We want you to focus on the value, but if (and it’s a good sign) that someone asks about the cost, we want you to be ready.
2.6 – FURTHER QUESTIONS
It would also help if you can answer the following questions (not essential but helpful!)
AT THE END OF DAY TWO
This day is exhausting for most people—you’re not alone. It has (hopefully) forced you to think about tangible ways to present and show your idea to potential customers. It might not seem like you have enough for ‘a business,’ but being a) very clear about what your initial offering is and b) being able to display it in a way that makes sense to your customer, is an incredibly powerful way to start.
In Day Three we will look at brand identity—creating a name and logo for your business.