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 1,2, 3 & 4 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 FIVE – GO TO MARKET
Price is only the issue in the absence of value. Anon
Day Five is the most challenging of all the days. It is very fun to sit behind a computer screen making a business, it’s a whole ‘nother kettle of fish when you take it out to the world and speak to people about it. It’s tough, but it has to be done sooner or later. This is sooner, and the faster you get can get used to talking to people about your idea, the better you will become at doing it.
Until now the idea has been in your head and in the pages of this book. It is now time to get feedback from ‘the market’ to see what people think.
Day Five is about finding the right people to talk to, and most importantly, asking the right questions. We asked the wrong questions to the wrong people when we started our business, and we suffered considerably because of it.
5.1 – WHAT ARE THE RIGHT QUESTIONS TO ASK?
We cannot stress the importance of this section enough.
We’ve found that many questions about a business are linked to a future state that may or may not happen. We were certainly guilty of this. What we should have done differently
Before you dive in to your own questions, we want to share some of the key questions that we failed to ask, and the answers that we would have received.
Q: “Is there a need in the market for this”
A: “Even though the Eastern European market for niche of luxury products is growing, unknown brands, that have no previous track record, no marketing, no proprietary features, might not be an immediate choice for somebody that wants to make a purchase”
Q: “How big is the market?”
A: “In Romania, there are 3 big retail chains that sell sunglasses and eyewear and they make up 95% of the market (e.g. if you don’t crack a big retailer in Romania you’re going to struggle.”
Q: “How likely are you to put this brand/product in your store”
A: “The optical market and retailers are 90% supplied by two of the biggest companies in the world: Luxottica and Safilo. Combined, the two own most of the sunglasses and eyewear brands in the world. The other 10%, retailers buy unbranded “white label” frames, that are significantly cheaper than any branded products. The idea that retailers would give up shelf space to a brand that is unknown, with no star power behind it, is not really competitive with the margins they get from the other customers, with no history in return rates and quality checks, with not a lot of money to offer as “incentives”, is incredibly unlikely.”
We could have easily asked the three questions above in the first week (even through desk based research) and it would have given us an accurate view of the market and would have saved us 11 months and £43,000.
Asking the right questions
If you ask a friend if they will come to your store when it opens the answer will probably be “of course”. This could be because they are a friend and want to be polite, or it might mean that they shop at this kind of store all the time and will move their loyalties to you. However from this type of questions you have no idea which is true and cannot take this answer at face value as intent to purchase.
It is crucial to anchor your questions to activities and behaviours that have already happened in the past—past behaviour is the best predictor of future behaviour. You want to talk about their life specifically instead of in generics and after you ask the question you want to listen, and not interrupt.
It is good to have a list of questions that you want to ask, but because you always be listening you will be able to hone in on answers that will provide further answer to prove or disprove your idea. If we take one of the examples below:
If you ask “when was the last time you went to a cupcake store” and the answer is “the day before my son’s birthday,” instead of moving on to the next question you will want to probe with some follow-up questions because it might be that they only go to a cupcake store to get cupcakes for birthdays and not as an everyday occurrence. If you take it at face value of ‘yes they go to cupcake stores’ you might be missing the point.
This can be the most difficult part of this process—asking the right questions. Make sure you have a list (that you can alter) and keep track of any follow-up questions you ask as they might become more valuable than the original list you have written out.
- When was the last time you went to a cupcake store?
- In the last month how many loaves of bread have you purchased?
- On the weekend would you seek out something sweet, like pastry or cake?
- (If they have family) What causes your children to stop and say they want one of those?
- Have you tried anything else?
- How are you dealing with it now?
- What else should I be asking you?
- Will you come to my cupcake store when it opens?
- Do you buy lots of cupcakes?
- What is your favourite type of cupcake?
- Do you use Amazon?
Watch out for the fluff
In Rob Fitz’s book The Mom Test he says that you need to watch out for positive fluff. Because we are the easiest people to fool when we hear ‘oh that’s a great idea,’ it plays straight to our ego and we then leave thinking we have some support for our business.
Sticking to quantifiable questions that are anchored to the past will allow you to cut through the fluff and get valuable information. Don’t be afraid to probe deeper about why someone has answered the way they have. It is much better to have an uncomfortable conversation now and get valuable information that will initially be disappointing but will save you time down the line.
When we started our business in Romania we asked lots of ego based questions. We asked the questions to people who really had no vested interest in the success or failure of our personal business. They wanted their own business to succeed (which would be helped by our success), but it wouldn’t be the end of the world if it didn’t. We represented a brand who we bought products from before attempting to resell them to high-street retailers across Romania. For our partner, Eastern Europe wasn’t a priority market, so any success we had selling the products was a bonus.
Without stepping back and thinking about their vested interest in our success, I studiously created a beautiful business plan that was based on no more than ideas I came up in my head. The furthest we went to validate the idea was asking our contact at the brand whether it was possible to sell this amount month-to-month (from my fake plan). They said “yes, of course”.
If I’d taken time to step back and ask myself if this person was a) a believable person (they have the experience and knowledge to be reliable on this subject in this geography) and b) if there is any reason this person would tell me it was a good idea even if it isn’t, then we would have had a strong reason to doubt what they were telling us.
5.2 – WHO SHOULD YOU ASK?
Finding the right people to talk to is crucial. The first people that buy your product are most likely to be people you know directly or through people you know. You want to find potential customers, or those that you believe will give useful, relevant and reliable feedback.
First we are going to look at the people who you already know that will be willing to give you feedback.
Make a list of your three biggest fans, people that support you in whatever you do:
Who always tell you exactly what they think, even if it isn’t always supportive? These people are essential to have in your life, and if you don’t have them, find some.
Who do you know in the industry that you are trying to enter? Even if the link is weak, it wouldn’t hurt to ask them for 10 minutes of their time.
These are the nine people you should speak to. They will give a range of answer could be positive, full of fluff, or even critical (you need critical!)
Regardless of who you talk to, if you really value their advice you should ask them to give frank, candid feedback, regardless of if it is negative. Negative feedback is just as valuable at this stage. If you come away with nine answers of “this is the best idea ever” then a) you have the best idea ever (unlikely) or b) people are not giving you their true opinions because they are worried about hurting your feelings (more likely).
Take every piece of feedback with a grain of salt
There are two ways to make sure you are being critical about the feedback you get:
- Make sure to get a wide range of opinions (split between critical and positive feedback) and make sure to determine whether they are a target customer or not. This will allow you to gauge the value of their feedback. A simple way to do this is rank their value as a consumer. If someone is wildly positive about your idea, but has bought one cupcake in 10 years, it may seem like good feedback but it probably isn’t worth much. On the flip side if you have a cupcake connoisseur saying that the recipe is wrong, it is more valuable but also it might not just be to their taste. Use your judgement.
- Not all feedback is created equal. Look through this list of nine people and give them a ranking from one-nine to indicate whose feedback you will take the most seriously. If you have picked a strong list of nine this exercise will be tough. If you find it is easy to put someone at the bottom of the list it might be worth replacing this person with someone else.
If you could talk to the ‘perfect’ person about your business, who would it be?
This person might not exist in your network right now, but let people know that you are looking to speak to them and you’d be amazed at what manifests itself. For us, as we are writing The Six Day Business, we would like to talk to someone who has worked in the publishing industry for 30 years, has written and published six books, knows publishers and is also an agent (if anyone knows this person let us know!)
WHERE TO FIND FEEDBACK
You already have a list of people to speak to—but what if you want to get more feedback?
Ask Family and Friends for Recommendations
Family and friends are a great starting point, because they want to see you succeed and will generally help wherever possible.
On the flip side, family and friends are most likely to give you biased advice, as they don’t want to hurt your feelings. You can frame the conversation well at the beginning using phrases like:“I know you love everything I do, but I really want your feedback as a consumer, not as my mother!”
This group will be the most subjective group to toughest to be objective with because you know them the best. Remember to rank their opinions as you would anyone else’s.
People in your wider network
When you start talking about your idea to family and friends, inevitably they will say:“Oh you should talk to X, they are in this industry.”
Ask for recommendations and give the ‘recommender’ an outline of what you want to ask:“I am testing out different business ideas and want to talk to someone in X field. I would love to set up a quick call (no more than 15 minutes) to hear your honest views on what I am planning on doing”.
Once you put your ideas out to the market you will be surprised that Uncle Steve’s third cousin’s brother runs the largest X business in the area. This happens all the time so make sure to tell people what you are planning on doing.
Speaking to potential customers at local events
If your prototype is at a stage where someone could buy it, then you need to put yourself in a position to sell it.
You have your logo, you have your marketing material, and for a few hundred pounds more you can apply to have a stand at a local market/fair/event.
Do some desk research to find somewhere to start. Search ‘local markets in X town’ to find places in your area. You could use more specific terms—‘local food markets’ (if you’re selling food) as it might be worth going further afield if it means talking to the right people.
You won’t be able to find and set up at a market in one day, but keep this in mind as an option as you continue to test your idea.
I remember the first time we went to a market—it was exhilarating and nerve wracking in equal measures. We were selling our accessories brand uju & co. (the name was taken from the Zulu word for honey—don’t ask). I still remember that moment when the first product was sold—it was exhilarating and validating at the same time. Those first customers could turn in to your biggest fans. Get their details and ask if you can stay in touch.
It was also very humbling as hundreds of people walked by and didn’t purchase what we’d made. It was tough for our ego. It’s a fact of business that there will be lots of rejection—don’t take it personally (easier said than done) and use it as a learning experience at every stage.
Any time you have an opportunity to ask someone for feedback, take it—the idea is always to to talk to as many potential customers as possible and get their feedback.
If they buy, great, ask them what appeals. If they’re interested but don’t end up buying anything, ask (kindly) what swayed them to not make this purchase. Write down your observations studiously and gather as much information as possible. Use this experience to ask a range of questions (building on the work you did in exercise 5.1) and try to get as many views as possible.
If one person says “nope, I would never pay £6 for a cupcake,” it might just be a one-off. However if no-one buys all day, and you hear that feedback seven times, than that is very useful.
If you do decide to continue with your idea, markets are a great way to start to build brand presence, community, and awareness. They are also normally run on the weekend, so you can test your ideas without quitting your day-job, meet other small business owners, and build up a network to support you. The experience that those around you have gathered will help you progress faster than if you sat behind a computer all day.
One last thing to mention about market stalls is to pay attention to the costs. For this initial test it is OK making a loss if you are getting key feedback. If you are planning to do this each weekend, and the stall costs £180, the car rental costs £40, and the cost of making the cupcakes (plus your time) comes to £74 than you know that you have to sell £294 worth of cupcakes just to break even.
Even though you might not breakeven the first time, if you’re asking the right questions then it is worth the money.
Social Media Contacts
If you’ve spent any amount of time on social media over the years you will have built up a network with like-minded people. Now is the time to leverage those contacts. LinkedIn can be particularly valuable, as it’s main purpose is professional networking. Your connections on LinkedIn can be a valuable source of feedback. It is worth looking at who you follow on Twitter and Instagram to see if there is anyone you can connect with and start to build up a relationship.
If you have connected with someone (whether you know them or not), they have given you permission to contact them, and that’s what you should do. If you don’t know them well you can send the following message, personalised based on what you know about them and their expertise:
We have been connected on Linkedin/Twitter/Instagram for a while and I have enjoyed your contributions.
I am thinking of doing X ,and because of your experience in Y, I would love to ask you a few questions to understand your views.
Would you be free for a ten minute phone call this week? Let me know what works for you.
It’s straightforward, to the point, and makes a clear ask. You probably won’t hear back from the majority of people, but again, make a list of ten people, send the message, and see what happens. You’d be absolutely amazed at what people are willing to share if you approach the conversation from a perspective of pure curiosity.
Online or Physical Resellers
Finding a direct path to your customers, through either a physical retailer or online store, is another route to go straight to market. There are benefits to working with people who already have foot traffic (either with brick and mortar, or an online shop) you can then leverage. The margins (how much gross profit you make on each item) will be lower when you do this (as you will have to account for the retailer needing to make money as well), but if you are providing a great product, and they have customers, it can be a match made in heaven.
‘Cold calling’ on a retailer made us nervous when we first did it (and still does) but it’s a quick route to honest and productive feedback. If you’re polite, friendly and straightforward you’ll be amazed at how willing people are to talk to you.
Keep in mind that these retailers (if they stock a number of brands) make money by finding cool, useful, or valuable products that their customers are going to buy. If your product fits this category than you have a chance at being stocked.
Try to approach stores when they are likely to be less busy. This will make it easier to build a rapport with staff.
Sometimes you might get answers that seem positive, but really are not helpful:
If a retailer says “this is nice, let me know when you launch”
You might think “YES! A retailer really wants to buy my products”.
In reality they didn’t say they want to buy your product. They said that they would like to know more information in the future. No commitment to buy, no feedback on the product, and no real valuable information.
At this point the temptation is to leave with a boosted ego. Instead, it is the time to dig in more specifically. Think back to section 5.1 – ‘what are the right questions to ask’ and use some of the below questions to dig in on what they say.
- How many of X product do you sell in a year?
- When was the last time you sold one?
- Do you have room for another X in your store?
- Who else would I need to talk to make a decision?
- Would you be willing to pre-order five units to get a good price? I know your customers will love them.
As with all of these questions, you will get better as you go along and gain more confidence to talk about what you do.
When we first approached retailers to buy our watches and sunglasses we made the mistake of taking answers at face value when there was no commitment to buy. We left a 90-minute meeting feeling like we’d made a big sale, when in reality the only thing that happened was at the end of the meeting they said: “I like the design of the glasses, send over the lookbook and then we will touch base”.
In reality after calling this person 15 times over the next few months we never made one sale to this retailer. This tiny bit of ego-boosting feedback made us continue down this path for a few more months. It’s amazing what you can miss when you hear what you want to hear.
If we’d asked better questions, and looked at what the motivations were for this retailer (they worked with one main brand and needed a huge amount of stock to move forward—something we couldn’t provide).
It’s uncomfortable for most people to do this (and if it isn’t, lucky you!) but it’s the fastest way to get to market, and get great information.
One last thing
Practice makes perfect. This section might take longer than a day, but it is also something that you should never stop doing as you move forward with your idea.
You’ll find many people want to help, give advice, and tell you what they would love to see with your idea. This is great, they’re engaged. However, even if you do make what they suggest, it probably doesn’t mean they will buy it, only that they think it would be cool. Keep an eye out for ‘feature creep,’ which you can normally tell is happening when someone says “if you do this, I might consider it.” In most cases they won’t. Your idea has a market—stick to it, be specific about what you offer, and you’ll find your people.
- Trust your gut. If what you are hearing is completely contradictory to what you are seeing in the market, then analyse where the discrepancies are, and come to your own conclusion. If it feels like bad advice/feedback then ask yourself “why don’t I think this is true?” and try to be as analytic as possible.
- Always tell people where they can find out more (the online presence you set up in Day Four).
- Ask for email addresses from everyone so that you can keep them in the loop, and potentially ask more questions as you develop your business.
AT THE END OF DAY FIVE
Another full day. You probably have conversations, questions, and suggestions swirling around your head—and that’s good. The day is meant to give you lots of information. In Day Six we will help separate the wheat from the chaff and see what advice is worth taking onboard, what needs to be discarded, and importantly, whether it is worth spending another Six Days, Six Months or Six Years on this idea.