Coming up with ideas for creating a unique product category and avoiding competition can be hard.

But it’s not impossible and there are timeless ideas that you can use to create inspiration.

Here are 32 prompts you can use to get new ideas for a product that won’t have any competition.

It’s important to understand the product category that exists now so you know when one idea sparks a good counter-positioning scenario.

These ideas came from the author of The 80/20 Principle, Richard Koch.

1. Your Ideal Product Doesn’t exist

Create a product that does not yet exist in the market, but is desired by your target audience.

2. Upmarket/Downmarket

Create a premium version of an existing product, or create a more affordable version of a premium product.

3. Affordable luxuries

Create a product that offers a luxury experience at an affordable price point (Samsung).

4. Mass Market Vs. Niche

Choose a market segment that is currently underserved, and create a product specifically for that segment. Or take a product that is currently Niche, but could be produced for a mass market.

5. Bigger Product Vs. Smaller Market

Create a product that is of a higher quality or with more features than existing products in a smaller market.

6. Emotional Vs. Functional

Create a product that appeals to the emotions of the customer, rather than just its functional benefits (Apple). Or take a product that is sold on emotional appeal and design it to be more functional (Microsoft).

7. Healthier Versus Tempting

Create a product that is healthier than existing options (Organic Foods), or make a healthy product more tempting.

8. Safe Versus Racy

Create a product that is safer and more reliable, or a safe product and make it more racy (Liquid Death).

9. Convenience Vs Purity

Create a product that is convenient for the customer, even if it sacrifices purity or authenticity. Or Vice Versa.

10. Saving Time Vs. Extending Time

Create a product that saves time for the customer, or a product that extends the customer's experience.

11. Fixed Vs. Mobile

Create a product that is fixed in place or a product that can be taken on the go.

12. Unisex Vs. Single Sex

Create a product that can be used by both men and women or a product that is specific to one gender.

13. Masculine Vs. Feminine

Create a product that appeals to a masculine audience, or a product that appeals to a feminine audience.

14. Go Gay

Create a product that appeals specifically to the LGBTQ+ community.

15. Go Grey

Create a product that appeals specifically to an aging population.

16. Low vs. High Service, and Different Service

Create a product that requires little service or maintenance, or a product that requires a high level of service.

17. DIY Vs. Professional Service

Create a product that can be used or assembled by the customer themselves, or a product that requires professional installation or service.

18. Personalized Vs Untailored

Create a product that can be personalized or customized by the customer or a product that is not customizable.

19. Bundled Vs. Focus and Subtraction

Create a product that bundles multiple features or services together or a product that focuses on a single feature or service.

20. Expert Vs. Inexpert Users

Create a product that requires expertise to use or a product that is user-friendly and accessible to all.

21. Centralized Vs. Decentralized Use

Create a product that is intended for centralized use or a product that can be used in a decentralized manner.

22. Total Cost Vs. Initial Price

Create a product that has a lower total cost of ownership and a higher initial price, or a product with a higher total cost and a lower initial price.

23. First Place Vs. Third Place

Create a product that is intended for use in the first place, or a product that is intended for use in the third place (outside of home and work).

24. Second Place Vs. Third Place

Create a product that is intended for use in the second place (work), or a product that is intended for use in the third place.

25. Owned Vs. Rented Vs. Fractionally Owned

Create a product that can be owned outright, rented, or owned as a fractional share.

26. Narrowed Expertise Vs. Added Expertise

Create a product that narrows the expertise required to use it, or a product that adds to the expertise required.

27. Orchestrating a Supplier Alliance

Create a product that is developed in collaboration with multiple suppliers.

28. Online Vs. Offline, or a Different Distribution Channel

Create a product that is sold online, offline, or through a different distribution channel than existing products.

29. Entrepreneurial Judo

Create a product that leverages the strengths of your competition to your advantage.

30. Go Green

Create a product that is environmentally friendly and sustainable.

31. Ideas from Other Industries

Take inspiration from products or services in other industries.

32. Ideas from Other Places

Take inspiration from products or services from other regions or cultures.

People often talk about building systems in your life and business. From business books like “The E-Myth Revisited” to personal development books like “Atomic Habits,” systems are laid out as the weapon the hero uses to defeat failure once and for all.

In startups though, there is a different theme. Move fast and break things. Test and test until you find product market fit. Where systems are for creating order, this startup ethos is about embracing chaos.

Opportunities are found in chaos, but businesses are built by creating order. This is as true for a one-person organization as it is for a thousand-person one.

What is a system? A system is a collection of processes that work in unison. A process is a series of steps that take an input, whatever that may be, and make an output out of it.

A ticketing process, for example, takes customer requests and turns them into bug fixes or new features. A sales process takes people who have never heard of you and turns them into paying customers (read: revenue).

A business, or a system, is just all these different processes put together. An output of one process becomes an input of another and on and on it goes until all the outputs are accounted for.

Why build systems in your business?

Well because without systems, you don’t actually have a business. You may have a product or a couple of processes, but the value of a business is based on the predictability of its outcome.

You, an investor, an acquirer, will all value a business based on the question “If I put $xxx in this business, how much will I get back and when?”

That question can’t be answered without understanding the system of the business and how one process affects another.

Also, it makes your business way easier to build and grow. When you can finally answer the question, “If I spend X time on this marketing campaign, how much money will I earn?” You’ll have a completely different relationship with your business based on predictability instead of risk.

Foundations of a business systems

The most common missed concept when it comes to building a business is that systems are built in layers.

Like a tall building, if the foundational pieces of your system are weak, your business becomes more risky as it grows, not less.

Fortunately, the foundational pieces of a business system are fairly well known.

Things that give you direction

Mission

Your mission is your highest-order goal. It is the north star that guides every action of the business.

Values

Values are not things like transparency and honesty, those are principles. Values are things you find valuable. In other words, they are things worth striving and sacrificing for. Transparency is something you can achieve right now with basically no additional effort. It is not a value for that reason.

Principles

These are your modes of operation. Principles are behaviors that are core to your identity. This is where things like Grit, transparency, work ethic, etc.

Things that move you toward your goal

Tasks

A task is the smallest unit of work. They are the building blocks of projects and workflows. If you want to build and do great things, pay close attention to how you structure tasks.

Communication

Communication is the means by which micro and macro decisions are made. The decision-making process is incredibly important in any system. You will need to determine how communication is done at every level of work (Task, Project, Portfolio).

Resource

A resource is a unit of information. Without dedicated resource systems, you end up with a system where some people are gatekeepers of the necessary information to operate components of a system.

Once you create a system that accounts for how all these pieces will work together and be managed, you can then begin to build your processes.

Defining Your Processes

When Tim Ferriss launched his book “The 4-Hour Workweek” he changed the landscape of entrepreneurship in the information age. Or at least he redefined the principles of entrepreneurship to reflect and knowledge-based economy and not a manufacturing or service-based economy like we were before.

In that book, the first part of his infamous D.E.A.L. framework was the Definition.

Processes are either natural: they occur without the intention being placed on their creation, or manufactured: they are designed with a specific outcome in mind.

Either way, a process cannot be created or changed until it is well-defined.

The best way to define your process is to begin by defining the outcome you want the process to produce.

When doing this for your own business, start with very very small outcomes. Here are some examples:

• Leave customers happy and thankful after they submit a request or have a complaint.

• Acquire 3 new customers per day

• Weekly account balancing

• Weekly content planning

The process documentation is complete when you can pass it off to someone else and reasonably expect them to be able to produce the result. You see during the creation of the process how the process is built out of the pieces outlined before:

1. What are the tasks that collectively make up this process?

2. How will the results or roadblocks of the process be communicated to you?

3. What additional resources are required to execute this process?

It’s important to do this even if you never expect to hand this process out to someone else. Why? Because without defining the process you have no way of measuring how a change in one part of the process will affect the process as a whole.

Improve and delete

Until you define a process, you can’t edit it. And the editing is where the magic really happens. Once you know that a process has x input and 1.3x output, you can change the process and see how that changes the output.

Each process will produce an output whether it was created by you or a natural phenomenon. For example, success in a business creates cash. It’s for that reason that there are accountants. They answer the question of what to do with that cash or where is it needed next.

A system design is complete when every output becomes an input in another process, closing the loop. An output that doesn’t have a place to go should be considered waste. Even excess cash is wasted if you have no idea what to do with it. It might be a valuable waste, but still a waste.

Your goal for creating your system should be to get the absolute most output for your inputs with as few processes as possible.

How do you do that? Well, it’s a process of creating processes that deal with each output, and then improving the performance of each one.

This all takes a lot of time and a lot of thinking. It can be easy to end up with a monster of a system that no one in their right mind can actually navigate. That happens when a system becomes bloated from adding and adding without closing the loop.

To avoid that, and keep your business small but powerful, you have to pay special attention to what can be deleted to a benefit. What I mean by that is what can you delete and actually improve the performance of the system?

Conclusion

You are either creating a system intentionally or without realizing it. But regardless that’s always what’s being created. It’s better to take those efforts into your own hands and be mindful of each process involved.

What makes people and businesses successful?

When you look for an answer, it doesn’t take long to stumble on these cliches

• Hard Work

• Consistency

• Culture

From resentful people, you get darker answers

• Taking advantage of others

• Paying employees unfairly

• Ruthlessly taking down the competition

• Luck

• Inheriting from Daddy

They’re all wrong. But you only figure that out once you dig deeper and deeper until finally you’re at the bedrock.

John D. Rockefeller for example, did work hard, but he retired at 35. So over the course of his life, he didn’t work nearly as hard as others and wasn’t consistent considering he stopped working very early.

The same is true for Andrew Carnegie of Carnegie Steel.

Although Warren Buffett never retired, when asked what’s in his work day he transparently says it’s very relaxed and mostly comprised of reading.

The truth is being successful comes down to making incredible decisions.

If you made the one decision to put everything you had and everything everyone you knew had into Apple or Berkshire Hathaway stock in the 1980s, and never took it out, you would be wealthy absolutely regardless of how hard you worked.

Of course, that decision is easy to see now, but it is obviously true.

Making these million-dollar decisions is absolutely crucial to succeeding in business. No amount of hard work will overcome terrible decision-making.

How do you make million-dollar decisions?

Here’s a basic framework.

Extremely Clear Values

When a business puts out its ‘company values’ they are misusing the word. They talk about transparency and work ethic etc…

Those are principles. Modes of operation.

Values on the other hand are things worth striving for. They are things you find valuable. They are goals that are independent of circumstance because you would value them regardless of where you currently are.

You’re goals fit inside of your value structure. Without being clear on your values, your goals are completely arbitrary.

Do you value money? (The answer is yes)

Do you value respect from your peers?

How about the freedom to be spontaneous?

Providing security to the people you love?

Status?

Peace?

Sexual Access?

Having short answers like that is a good start, but then you have to define them clearly and personally.

Peace for you might mean you spend every morning on a golf course playing 18 before you do any work.

For another, it might mean moving your family out of a war zone.

Assessing your values might be fluffy at first. But if it stays fluffy that means you haven’t made it specific and personal enough. It should be tangible.

Only then, can you actually make goals that matter.

Making great predictions

When I work with clients or talk with peers, one of the most common errors I see is people making decisions without even trying to think about what will happen once they do.

You may not be able to predict what the ultimate result of something might be, but you can certainly make predictions to get you halfway there.

For example, if you want to grow your business through content marketing, I predict you are going to spend a lot of time creating content for a return that’s at the very least months away and really more like a year or so away.

If you want to go the ads route I predict you’re going to spend a decent budget for low returns until you’ve spent a lot of time and money learning, optimizing, and improving.

If you are going to cold call I predict you’ll make a lot of phone calls.

If those seem like obvious predictions, that’s the point. Yet, this is what it means to think through something.

When you have an idea about a potential solution to a problem, ask yourself: “What are all the things that might happen if I approach something this way.”

The answers will be longer, more specific, and more detailed when you practice this for yourself. This is by far the easiest way to stop yourself from making a lot of bad decisions.

Once you have the first answer to that question, ask yourself, “And then what will happen?”

You can do that over and over again until you either realize this will or won’t get you to the things that you value.

This is also a great way to create a plan.

Conscious Experimenting

Predictions are great, but they need to be tested.

After you’ve assessed or created your values, and predicted the outcome of your options, what you are actually left with is your constraints.

In other words, you should have a very good idea of what is off the table for you. And that’s important. The truth about business is that there are too many options to pursue, not too few. For that reason, it is more important to take things out of the equation than to bring more things in.

With what’s left, you need to run experiments. They should be practiced meticulously just like a scientist would. With a hypothesis, a clear measurement method, a repeatable experiment, and then a conclusion.

The most difficult part of this process is actually the measurement method. It’s also the most important.

You’re goal, is to return the largest amounts of the things that you value. When it comes to money, the measurement is in dollars. With your other values measuring can be more difficult, but no less important.

The purpose of experimenting is to find your best option, not all your options. If you were to think of all the different marketing tactics to invest in, it won’t take you long to come up with a list of many.

But if you then take your marketing budget (whether time or money) and then spread it across all your options, you are deliberately damaging your returns. One marketing option is going to outperform all the others.

If you diversify instead of focus, you’re taking a budget (this could be read as a constraint) that could produce a high return and push it to a low-return activity.

You want to avoid this at all costs, it will only make life harder.

Every experiment should be valued on how much closer it gets you to the things that you value.

Conclusion

Decisions, not work ethic, are what create real results.

But that doesn’t mean it’s easy.

Market leadership is the number one predictor of a business becoming unusually profitable for a long period of time.

You know Richard Koch? The guy who wrote the 80/20 principle? Did you know that he is also one of the most consistently successful VC investors in the world?

By his own reporting, his average return is 16x on investment.

How does he do this? Well, he says it’s simple. Simple enough that you too can make your business what he calls a “Star Business.”

In essence, a star business meets 2 criteria:

1. They are the leader in their market

2. Their market is growing by 10% per year or more

What are the advantages of being a star business?

• You will almost always have a higher profit margin than your competitors

• You will have higher absolute profit than your competitors

• The cost of difficulty of acquiring new customers is far less than your competitors

• These businesses are generally much easier to run and have much larger margins of safety

• All of the items above create a positive feedback loop that allows you to gather even more market share and widen your moat against competitors.

In this article, we are going to cover how to become a star business using one of the two strategies for getting market leadership.

One strategy is to beat your competitors for leadership.

The other, the one we are going to cover, is creating a new market altogether. This is often referred to as “becoming a category of one.”

What makes a market different?

Before we know how we can create a new market for the purpose of becoming a leader in that market, we need to know what makes a market different from another.

In short, it needs to be a sufficiently different customer segment and a sufficiently different product.

As you can probably already tell, this is more art than science.

Take Apple for example. Many people often push the wrong idea that Steve Jobs didn’t pay attention to competitors. Instead, he just focused on creating the most beautiful products he could.

They couldn’t be farther from the truth. Jobs was an expert at what’s called positioning. Essentially the practice of looking for and filling gaps in the market. He understood that if he focused on great positioning everything else would fall in his favor.

When he came back to Apple in 1997 his first resolution was to get rid of every product he thought Apple would not be able to be a market leader in.

In every product launch after that, he didn’t create products that competed with others, he created entirely new categories.

The iPod, then the iPhone, then the iPad. Apple is the leader of all those markets because it created the market.

What’s important for you to understand is that Jobs saw the market in segments. He was not trying to sell everyone his products. Instead, he focused exclusively on a customer segment that was willing to pay more for a more elegant and simple product.

Meanwhile, in 1996, Alienware was founded. You would expect in the reign of Intel, Microsoft, Dell, and Apple there was no way an upstart computer hardware company would succeed.

However, the founders of Alienware discovered a market segment that none of their competitors prioritized: computer gamers.

This market had different needs than the general market. So Alienware created high-performance products with computer gamers in mind. Even designing their products with vibrant lights and colors that attracted specifically gamers.

The lesson? Look for a niche (small portion of the larger market), that has different needs than the broader market, and is not being served effectively.

That is the key to creating a category of one.

Conclusion

To create a new category and have no competitors you need to:

1. Identify a segment of a bigger market

2. Understand their unique needs

3. Redesign your product for their use case

PS. I’m trying a new newsletter format that’s shorter. How do you like it? Feel free to respond to this email and let me know.

Ditch everything you learned about marketing online. It’s useless.

Most people teach and talk about tactics. If a tactic works, then they have a hammer and everything looks like a nail.

Good marketing strategies start with your constraints, not your options.

Most of the tactics are half steps. What you need is customers. It rarely makes sense to take a left turn from that and tell yourself that what you need is a brand or audience or SEO traffic. These aren’t customers, they are precursors to customers.

You might just end up doing one of these with no success:

• Spend 6 months struggling to build an audience on social media

• Spend 6 months struggling to rank your content on Google

• Build in public so other Indie Hackers see your product, even if Indie Hackers aren’t your customers (seriously?)

• Partner with creators and influencers who already have an audience to get fast-tracked marketing

• Build a waitlist for your product

• Launch on Product Hunt

• Build a YouTube channel

It may not result in any customers because frankly you’re not focused on getting customers, you’re focused on building a distribution channel.

Instead, you need a marketing strategy (not a channel) that’s designed specifically for you and your business.

Let’s demystify marketing right here, right now.

The Foundation Comes First

“60% of the time, it works every time.” - Brian Fantana

If you don’t start with the steps in this section, you are relying on chance.

Start with the audience

You’ve probably heard the line, “If everyone is your customer, no one is.”

Know your customer, and marketing becomes easy.

They tell you how to market to them. Not the marketing gurus online.

Founders often start with the product and then figure out the ideal customer later. This is backward. Start with the customer you want to serve and build your product around them.

If you already have the product, then you need to come back to this step and get specific about who the customer is (and potentially make changes to the product to fit their pain points).

There are 4 criteria you should use to pick a target audience:

1. Massive Pain

They must have pain or be frustrated with the problem that your product solves.

2. Purchasing Power

They have to have the funds to pay for your product.

3. Easy to target

If they are hard to find, they are hard to market to.

4. Growing in numbers

There should be more of them every day.

Take time to drum up some examples, then evaluate all your options by these 4 criteria. They need to fit in each one. If they don’t meet one, they are not going to make a good target audience.

Understand their obstacles

Once you determined who you’re targeting, next figure out what their dream outcome is.

What are they working toward?

The steps between where they are now and their dream outcome is their journey, and their journey is made up of obstacles.

Your product should be a solution to one or many of those obstacles.

List all the obstacles between them and their dream outcome. Be specific.

Not: They don’t have enough customers

But: Their bootstrapping so they don’t have the resources for traditional marketing or the resourcefulness (know-how) to accomplish non-traditional growth

This specificity:

1. Proves to your audience that you understand their circumstance.

2. Implies that your solution is designed specifically for the obstacle they have.

3. Increases their perceived likelihood of success from using your product (which increases conversion rate).

How does your solution remove those obstacles

Your job is to remove an obstacle in the way of their dream outcome.

Attach a solution to each of your customers’ obstacles.

The solution that you should build is likely the one you have the most detail for.

The greater the pain the obstacle creates, and the greater the likelihood that your offering will lead to success, the more a customer is willing to pay.

In fact, most marketing is meant to increase the perceived likelihood of success.

Marketing is Easy

Once you understand your customer and have a solution that is right for them, marketing is as easy as you make it.

Effective, Not Efficient

Most founders I talk to believe that successful marketing is an efficiency issue. They want cheap attention. If you’re urging to go viral, you’re in this camp.

Getting cheap attention, and getting customers are different goals.

You want cheap conversions, not cheap attention.

This is good. Getting conversions is much simpler than getting cheap attention.

How many conversions you get is entirely dependent on how many of your target audience you ask to buy your product.

If your audience is easy to find, then all you do is go where they are and ask a lot of them to take action (buy, start a trial, join the waiting list, etc…).

No, it doesn’t ‘scale.’ No, it’s not efficient. It doesn’t go viral. But it works. And what works compounds.

Customers are marketing assets.

Doing what works, even if that means reaching out to potential customers one by one, builds momentum that you can leverage to create more momentum.

Having customers makes it easier to get more. It’s partly psychological. Once you have happy customers, you feel better about selling more. Then it becomes addictive.

Also, because you spent the time building relationships with your first however many customers, they are invested in you.

They:

• Give you testimonials

• Recommend your product to friends

• Like your social media posts (getting you more reach)

• Read your newsletter

• Make requests that make your product better

• Even complain, which points out your weak points.

This is the essence of how growth momentum is created. It’s organic, but it’s not effortless.

Don’t diversify, Concentrate

There is this weird pervasive thought process most business owners have. Once they have a campaign that gets them more customers, they want to build another.

What they don’t understand is marketing is an investment. And you need to think like an investor when you approach your marketing strategy.

Experiment First Mindset

If you had $100 to invest in growth, and one campaign delivered a 20% return while another delivered a 10% return, don’t spread yourself across both and average out to 15%.

Settle for the 20% returns.

This means you need to spend time experimenting to find the highest return marketing activity.

You do this by running small marketing experiments to test out your ideas and keep track of your inputs and outputs.

Triple Down

"You know, we think diversification is—as practiced generally—makes very little sense for anyone that knows what they’re doing...it is a protection against ignorance." - Warren Buffett

Once you’ve found the campaign that delivers the best results, build a system for increasing the inputs.

1. Define the campaign process

2. Optimize each step

3. Eliminate the unnecessary

4. Automate or Delegate

5. Then, finally, scale

It’s simple.

Don’t add work

In only four cases should you change from the activity that produces the highest results.

1. You’ve found a new marketing activity that produces even higher results

2. You’ve sucked all the blood out of this marketing activity, and it’s not producing results like it use to.

3. There is a supplemental marketing activity, that when combined with the first one, increases your absolute return on marketing effort.

4. You are now a big company and need to diversify your customer acquisition as part of a risk management strategy.

Most people who get big and then begin “omnichannel” marketing, do it to keep up with the Joneses, not because it’s actually a good strategy.

If you feel the desire to grow at a faster rate, invest more in the campaign that’s producing the best results. Don’t spread your resources out and diminish your returns.

Conclusion

Although this article was not tactical at all, it should help you avoid all the poor advice on marketing you’ll find on the internet.

It’s not tactical for a reason. No tactic is favorable over another without consideration of who your customer is, where to find them, and how they want to be engaged with.

When you start with tactics, you end up jumping from tactic to tactic looking for something that actually works, when instead if you kept things simple you could already be bringing customers in the door.

Small companies in a large competitive landscape need to learn first and foremost how to utilize what little resources they have available to them.

The results from building off of what you have instead of bringing in outside resources will generally create a stronger and more durable business anyway.

Founders who live off the land tend to prioritize resourcefulness, originality, and attention to detail. Conversely, people who don’t live off the land tend to prioritize size or growth, status markers, and best practices.

I’m not saying if you raised funding or have some other form of external leverage that you can’t have an ethos of living off the land. I’m saying that when you learn to live off the land you don’t require external leverage to succeed.

It will force you to prioritize sustainability from day one.

Build small then build on top of it

The key to living off the land is seeking to be effective over being efficient. In other words, focus on finding what works instead of what you can do a lot of.

An example would be the method from earlier of finding 10,000 potential customers and reaching out to them one by one. Does it scale like ads or content? No. But it does work assuming you actually have a product that is fit for them.

But marketing and growth isn’t the only place starting small and effectively pays dividends. When you force yourself to think and build small, you get rid of the good ideas in favor of the great ones.

If you could only sell one product, which one would it be? If you could only use one marketing campaign or process, what would that look like?

If you could only pick one, you’d think harder about which one was the best.

Then, after you’ve successfully built something small, you build on top of it using the same line of thinking. What’s one thing you can add that will have the largest results?

If the focus is on effectiveness, you will usually innovate your way through problems instead of searching for best practices.

Sure, some people spout the phrase “don’t reinvent the wheel” in an effort to encourage you to stick with what already works. But, especially in today’s environment, best practices become dated tactics very quickly.

Take as an example, Tesla. If they were building their company based on industry best practices they would have sold dealership franchises to get people to buy their cars. Instead, thinking through the issue from first principles, they decided to instead go direct-to-consumer with showrooms and e-commerce points of sale.

That not only got the job done of selling cars but saved them 30% of their profit margin which is usually the margin of dealerships.

Raise money from your customers

If you are truly living off the land and didn’t take any outside money, then it’s your customers that provide all the funding for your business.

This is great because it keeps you focused on your asset’s market, not the asset market. That’s just a snarky way to say the business becomes about selling something customers want instead of selling itself as a product to investors.

When you want more money, you have to do it by negotiating acceptable terms with your customers. That might mean you find more customers, launch a new product, or change your pricing model, but at the end of the day, your customers will have to agree to give you more money, likely in exchange for more value from you.

This keeps you incredibly aligned with the marketplace. And that alignment will create a wider moat for your competitors to tend with.

It also turns your customer base into your most important asset. They won’t only be the ones paying you, they’ll also take part in promoting you and making the product better through feedback.

Focus on the effective few

In entrepreneurship, especially in the startup days, there is immense pressure to attempt to do all the things you could be doing.

So often a struggling entrepreneur asks an open question to an open audience on Reddit or Twitter or Indie Hackers how to go about marketing their product.

Each time the answer points them toward a side project like building an audience, doing SEO, or starting a podcast or youtube channel.

What it assumes is that you can’t market a project without having some type of distribution asset at hand.

Putting it mildly, that’s an amateur move.

It’s true it’s easier if you already have 40,000 followers who are likely to be qualified prospects for your product, but building a distribution channel and marketing your product is not the same thing. And you need present customers, more than you need future customers.

Focusing on the effective is focusing on what works now, not what might work later or what might work if only you had some nebulous additional resources like funding or an engaged audience.

The trick is after you find the thing that is the most effective at your disposal, keep doing it and then look for ways to make that more efficient.

The thing is effectiveness, which is about getting results, and efficiency, doing a lot of things faster, always seem like opposites.

Finding real potential customers, reaching out to them manually, having a conversation about the problem you solve, and then asking them to buy your product, is an incredibly effective way to get more customers. It just works.

But it’s horribly inefficient compared to the sound of things like content marketing, social media ads, and going viral on TikTok.

Yet, if you do a lot of the former, you could easily get to a point where you are getting 2 or 3 customers a day. And you’d be surprised how quickly that momentum builds.

Conclusion

If I could sum up an ethos for how to compete with giants, it would be: Don’t Diversify. Instead, be extremely targeted with how you spend your resources whether that be in time, money, or energy.

Like in investing, diversifying spreads you out and averages your results where you should be focusing on only the highest return activity. You don’t abandon what’s working unless you’ve found something better.

Choose a Target You Can Conquer

One obvious, but hardly practiced, business principle is to fight wars that you can win. Conceptually, this sounds easy. Yet, so many people think their enthusiasm or some other intangible measure is the resource needed to succeed in their business.

Enthusiasm or energy or work ethic are not sufficient equalizers. They won’t help you win a battle otherwise un-winnable.

Become the ONLY in a sea of many

Winning in a business context means becoming a category leader. Category leaders are essentially kings of the hill with a fortress. They are highly profitable because of the leverage they have as leaders, and wildly stable because it’s hard to dethrone them.

Many people used to believe that the net result of category leaders being so hard to beat would cause marketplaces to become stagnant. Essentially leaving monopolies and oligopolies to rule the market and thus our lives.

What came to be true was what Al Reis in his book The 22 Immutable Laws of Marketing called the Law of Division. The law of division is essentially the ability for an entrepreneur to come into a market and divide it into segments and become the leader of a particular segment.

For us, this means the answer is a divide-and-conquer strategy.

Create a new category, in which you can be the leader if you aren’t already. How this plays out practically is essentially making your target smaller and smaller until you are either the leader of the category or the only person in it.

For example, if you’re a digital marketing agency, you’re competing in a huge battlefield. If you decide to narrow down to an email marketing agency, the competitive forces get smaller. If you then narrow down to E-commerce automated sales emails, you’re probably getting to a place where you can actually create a list of your direct competitors.

But, you’re not getting onto something until you’re doing Abandon Cart E-commerce email marketing for female founders who use Shopify and are in the BossBabe online community.

That is a category small enough that you can dominate it with very little resources. And it sets you up for the next part.

Find the smallest viable audience

Many have heard of or read Kevin Kelly’s famous “1,000 True Fans” essay. If you haven’t, I highly recommend it. In it, he essentially breaks down the concept I’ve heard called in other places around your smallest viable audience.

Identifying your smallest viable audience is the key to simple and effective marketing. It forces you to stop trying to market to everyone and instead be specific.

If you were selling software that costs $39 a month, you only need 2,000 customers to make $936,000 per year.

That’s not necessarily easy, but to accomplish that you would likely only need a total addressable market (the total amount of potential customers in existence) of around 10,000 to pull that off.

Meaning you only need to promote your company to the same 10,000 over and over again to turn 2,000 of them into customers.

Another trick is to land on a target audience that is easy to find and identify online. Maybe they are all on a particular subreddit, Facebook group, niche website, Slack group, discord, location, etc… If they are easy to identify as part of your audience then they are generally very easy to market to.

If you cannot create a spreadsheet and fill it with the exact 10,000 people you would like to have as customers you are probably not being specific enough with your category and/or your smallest viable audience.

Think Like a Campaigner

Once you’ve widdled down your category until you are either the leader or the only one in it, and identified and documented your smallest viable audience all you have to do is tell each of those people what you’re unique value proposition and you’ll have created plenty of marketing momentum.

Will one run-through of DMing or texting that list going to get you the 2,000 customers? No, but it will get you many. Enough to create significant momentum.

The best is to do what Real Estate agents call farming. That’s when they pick 1 or 2 neighborhoods to target (smallest viable audience), then bit by bit they earn the branding as the go-to realtor in that neighborhood.

They don’t do that by sending a mailer and hoping someone uses them. They instead start by knocking on doors and introducing themselves. Maybe they just saw hi, maybe they have a short conversation.

As they get through more and more of the list, building relationships and learning about each prospect they can pinpoint where their next deal is going to come from.

Maybe you figured out Sally’s husband is looking for a better job in a different city. The realtor that knows that information has a much easier time getting a deal.

You should treat your efforts the same. No, this isn’t a ‘scalable’ marketing tactic. But scalable isn’t everything in marketing. This is grassroots, and it is a much more effective approach than most growth hacks or building a social media following or doing SEO.

By effective I mean it actually works even though it’s annoyingly simple and requires zero marketing knowledge.

Conclusion

At the end of the day, if your marketing is not easy, you’re not thinking small enough.

We are constantly sieged by advice to grow our social media channels, email lists, blogs, and youtube channels. But that is just a small segment of all the viable marketing tactics out there.

Don’t get caught up in thinking you don’t have the budget or following to market your product. That’s not what’s required. All that’s required is that you think for yourself and position yourself well.

Once you do that, by simply reaching out to perfect customers will be enough to create real momentum.

Counter-Positioning: Hit them where they can’t hit back

What is counter positioning

Every company takes a position to become successful. They have a certain price point, features, ethos, customer service policy, marketing channels, customer profile, etc…

As a company becomes a leader in a market, its position on everything inevitably becomes average. They take positions to appeal to the broadest audience or use case because they have undergone the most expansion.

An enterprise software company might automate its customer support through bots and help docs because that’s what’s most helpful for most people.

Yet, you have to imagine that there is a minority of customers that sees that position as not ideal for them. Maybe high-touch customer service is a bigger priority for them.

Counter positioning is about identifying your competitors’ positioning, and then finding an area where they are leaving big buckets of customers behind for you to lean into.

By dividing their audience you can pick weak spots they aren’t able to compete with you on because it would mean making things worse for the majority.

Identify the giant’s soft spot

all big companies and markets have these soft spots. As companies’ market share grows they will diversify their position to cover the most territory.

We can take advantage of their diversification by being decidedly better in fewer areas for fewer customers.

But we can’t do that without first figuring out what those soft spots are, and that takes research. Within that research, you want to study all of the companies in your category.

You should look at:

• Their pricing and offering.

• Who their target audience is.

• Where they fit on the quality scale.

• What their customer hate about them.

• Their customer service policies and processes.

• The product benefits they promote the most.

• What distribution channels they sell through.

• What their customers love about them.

Even with all that research, it’s not obvious where that soft spot was going to be. The trick is in understanding that it’s not what you see that matters but what you don’t see.

The opportunity is in what’s missing from the picture.

Microsoft created the product category that’s now called the Office Suite. They did this by bundling what became the essential software for computer work: Word, Excel, PowerPoint, and Outlook.

Microsoft Office, as the bundle was named, came out in 1990 and they were the leader in the category for over 20 years.

Then Google decided they wanted to get into the market. But they didn’t just make Google-branded versions of the products and try to sell them. They looked for holes. The first opportunity they saw was in Gmail.

They made a free email service that was easy to use and accessible from anywhere on the internet. Then they offered it to everyone that landed on Google.com, the most viewed page on the web.

Two years later they added Google Docs, Sheets, and Presentation. All were included for free, stored on free cloud space, and made it so you can collaborate with people live. Google’s products were not better than Microsoft’s. They actually only had 20% of the functions that Microsoft had.

But by segmenting Microsoft’s audience and servicing them with a product that was different in a way that mattered to them, they blew up. Microsoft in turn, did nothing for a long time. They were still selling software by CDs. To adapt they would have to change their entire distribution method. By the time they figured out how to do it, Google had gained too much momentum to stop.

Design a weapon to attack that spot

Once you’ve found the soft spot in the market, design your entire venture around exploiting it. The interesting thing about a good soft spot in the market is nobody will follow you there.

They will let you beat them up in that area and do nothing about it until it’s too late and you’ve already become the leader on those issues.

Take Duck Duck Go for example. Google gained the reputation of a company that’s using your data to profit off of you, and when things got political, a platform that censored stories based on a political bias.

Duck Duck Go built its whole mission around the idea that enough people wanted their searches to remain private, and for algorithms to be untampered with by bureaucratic incentives to build a business around.

They also knew that this could not have been more than a large minority of all potential users. Meaning, Google has no incentive to ditch a majority of users to win the preference of a minority.

In simpler terms, Google would do nothing to stop the growth of Duck Duck Go.

Rumble is doing this with Youtube, by betting on non-censorship and bringing everybody who got kicked off of youtube onto the platform.

Tesla did this with the car industry by focusing only on the production of electric cars when most companies didn’t have plans to produce a single one.

Bumble did this to Tinder by making it a forcing function that women have to be the first ones to start a conversation.

Netflix did this to Blockbuster by removing late fees altogether (late fees made up a majority of Blockbuster’s revenue).

Conclusion

If you can position yourself in a differentiated way that a portion of the total audience finds valuable, and your competitors aren’t willing to change their business model to follow you, you’re going to have a pretty easy road to growing your company.

The other day it was announced that Jasper AI, one of the first popular AI copy-writing assistants, is firing 30% of its staff to recalibrate its burn rate.

This was unexpected news in an Industry that for the last year was predicted to be the gold rush of the next few decades.

Jasper AI was early in the game. They are an OpenAI API wrapper that was around well before the release of ChatGPT, which marked the arrival of AI in a practical sense.

Yet, even with a head start, they weren’t able to maintain a lead to everybody’s surprise.

In the conversation that many tech entrepreneurs are having around this, I would personally describe it as relatively delusional.

Twitter tweet

Everybody wants to build an AI product right now. So much so, they are willing to completely ignore the impossibility of the task of navigating the competitive landscape.

If you read the comments on this post you’ll see people realizing the message Jasper’s failure is sending.

Jasper, one of the first companies to sell an AI copywriting tool, has zero competitive advantage in the marketplace.

How then, can one expect to create real competitive advantage, especially if you’re not planning on raising VC funds (though VC funding in itself is not protection)?

In this article, I’ll summarize 7 ways a tech company can build a real moat and protect itself from the forces of competition.

These are from the book 7 Powers by Hamilton Helmer, but I have revised them for bootstrapped tech founders in particular.

Lean Economics

This is as opposed to scale economies, which means the larger the business is the more it could spread its fixed costs around how many products are sold. Effectively equaling higher profit per unit sold.

The issue with that in a tech context is that there is already a marginal cost of reproduction whether you are big or small. This actually creates an advantage for smaller players.

Last weekend I had a quick conversation with the founder of Better Legal, an Indie competitor to Legal Zoom and Inc File. When I asked him how he thought about differentiating himself from his larger competitors he said plainly that his economics were much better than theirs due to his principle of staying lean.

This affords him the ability to come in at a much lower price compared to his competitors and remain healthily profitable. He’s about to cross $1M ARR without having raised any capital to speak of.

Network Economies

This refers to a platform where the value of the platform is partly determined by the number of nodes in a network.

The simplest example is social media. People join social media because there are other people there. It’s the other people that make it valuable.

Slack is another example of Network Economies in action. You join Slack because that’s where the rest of your team is.

Marketplaces live and die by their Network Economy. The upside is once the network is developed, the platform has an easier time retaining a strong position in the market. The downside is the difficulty of creating the network in the first place.

The chicken or the egg problem that’s inherent in creating a strong network economy seems to be why these types of companies rely on a different kind of leverage in their startup phase.

Generally, that leverage is large amounts of VC funding but it can also be other forms of leverage like owned distribution channels (Microsoft Teams is an example of a product that leveraged its vast distribution channel to take leadership from Slack.)

Counter-Positioning

As it sounds, this is about positioning yourself as the opposite of the leader in your space. This can take a lot of different forms.

Indiehackers.com is a good example of a counter-positioned business. Their functionality is a lot like Reddit, and you could also say they compete with other social media platforms like Twitter.

But the major social media platforms have positioned themselves (mostly) as topic-agnostic. They are for people to have conversations about anything. Indie Hackers on the other hand niched down and is only about Indie Hacking.

When AirBnB launched they counter positioned themselves against both hotels, which they are obviously very different from, but also VRBO. They did this by focusing their product on renting rooms in homes instead of entire homes.

Counter-positioning is often affiliated with targeting a smaller portion of the market and making your company exclusively for them.

Rumble positioned itself as the Free-Speech version of YouTube. Essentially taking the biggest complaint about YouTube and betting their company on it. It’s not expected that they will become bigger than YouTube, but they could still use the strategy to become a great and profitable company.

Switching Costs

This is the cost in money or effort it will take a customer to switch from your product to a competitor’s.

Enterprise softwares often rely on this for keeping customers around because companies often based much of their process around the operational software they use.

To use an example, let’s say you use ClickUp for work management across your whole company. You’ve spent many hours putting templates on the project and task level together, you track your time through there making it integral to charging clients and paying employees, etc… You’re gonna have a hard time considering ditching it for another software.

Even if that other software has all the same features of the same quality at a lower price, you’ll likely consider the cost of switching too high to see that as a necessary project right now.

IMO this is what a lot of email newsletter tools are doing wrong. They make it too easy to take all the resources you have and switch them over to a different tool.

Branding

This is what it classically means. How recognizable is your brand? When people think of the problem you solve, is your brand the first solution to come to mind?

The writers of the book The 22 Immutable Laws of Marketing call this “mind share” and whoever leads in mind share has access to a lower cost per customer acquisition than its competitor by default. In fact, they make the case that whatever your customers spend on marketing, a portion of that is effectively spent to your benefit as opposed to theirs.

Branding and Positioning (or Counter-Positioning) are closely related. Positioning is about how you identify yourself and who you are speaking to while branding refers to how aware your target audience is of you and the problem you solve.

Cornered Resources

This is one of the more traditional advantages. A cornered resource is something that the market finds valuable and you have exclusive access to.

In a generic context, it could be you own the land your coffee shop sits on, AND it’s in a high-traffic area.

In tech, it’s a little more elusive. Generally, tech startups are encouraged to ship products fast and begin promoting them. The flaw in the tactic is that if you build a tech product in a day, that’s about how fast someone else can build it too. If they can’t build it faster.

A cornered resource for software is more likely un-gated access to exclusive distribution channels. Like owned distribution for example. Though it doesn’t have to be owned, it does need to be exclusive or else it isn’t cornered.

In some senses, brand recognition could be thought of as a cornered resource as well. AT&T has gone bankrupt a couple of times and has sold off the brand for another company to take advantage of.

Process Power

Similar to scale economies this is about having the unique ability to create a product for much cheaper than your competitor.

Tesla as an example has accomplished this by rethinking the automobile business model altogether. They did that by:

1. Going back to being vertically integrated with their design, R&D, manufacturing, and distribution.

2. Selling directly to consumers mainly online. This has saved them 30% profit margins that traditional automobile companies have had to pay out to dealerships.

Vanguard is another example of a company that changed the cost structure of retail investing by moving from mutual funds with active managers to index funds that have much cheaper management fees.

That method has since been adopted by its competitors but only after Vanguard established itself as the leader in their space.

Conclusion

One of the reasons I wrote this newsletter is because, in the last week, I reached out to about 100 indie hackers building new products.

I’ve seen something kind of disturbing. There are many people building the exact same products as each other. Although the general (bad) advice is “there’s enough space for everybody, don’t worry about your competition” all but one are going to struggle.

Mainly these people are building in AI. Their either building customer service chatbots, sales tools, artistic QR code generators, or PDF summarizers.

If this is you, what’s going to be imperative is finding a way to differentiate yourself from everyone else building one of these products. Don’t get wrapped up in the silliness of disregarding market dynamics altogether and instead strive to adopt some of these competitive advantages so you don’t end up like Jasper being cannibalized by AI hype.

If you think back to the rise of TikTok in 2019-2020, the time felt like a land rush.

The results for many were extraordinary. Mainly, because the strategic landscape changed. There was an actual, virtual, land-grab. Many businesses were born or found new life within the chaos, before their bigger and slower competitors worked up the nerve to take resources from their old positions and place them on the new medium.

Now, Meta has just launched their Twitter competitor Threads. According to Zuck, they’ve already signed up north of 50M users in the first week.

The question I want to attempt to answer in this newsletter is:

Is Threads another land-grab opportunity for marketing and distribution? And If so, how should we take part in the land grab?

The Inherent Risk

To understand whether or not there is an opportunity on Threads, first, you have to understand the bigger game at play.

When Elon had the Twitter deal in escrow, he was asked if he would make a Twitter competitor should the deal fall apart.

His answer was yes, but he admitted that the undertaking would be much more difficult that way.

Looking back I don’t think he knew what shape Twitter was in, and I bet it has already turned out much more difficult than he expected. However, even though he likely over-paid in the tens of billions, acquiring Twitter was still much cheaper than competing with them.

That’s mainly for one reason, and the launch of Threads proves this even more.

Twitter is the undisputed leader in its category. And as we often mention in this newsletter, trying to fight a war of attrition (where both sides have basically the same attributes), against a dug-in defender, is incredibly expensive.

Take for example the LIV golf group that de-throned the PGA in more recent times. In LIV’s first year in operation, it spent about 8 times ($800M) the PGA’s yearly revenue ($110M). And LIV is already committed to spending more next year.

So to see Zuck launch Threads shows me 2 things:

1. Twitter is undeniably the category leader (the one being copied is almost always the leader).

2. Meta believes Twitter’s current weaknesses and their current strengths are enough to turn the tide and conquer the territory.

Frankly, I’m not very bullish on Threads taking over leadership. But they’ve already done well enough that the opportunity is obviously worth analyzing.

Is this good for you?

Then there is the question of whether or not this competition is good for us who use the platforms to promote our businesses and reach new consumers.

First, let’s go over some basic scenarios.

If you assume nothing will become of Threads, and pay zero attention to it, your assumption could be wrong. That doesn’t automatically mean you lose. But it could create these conditions:

1. Your customers and potential customers could decide that they prefer Threads to the other channels you’re marketing on and you could lose touch with them.

2. Your competitors can then jump into that space free and clear and take hold of strong positions.

Both of those are problematic. But, your customers could not care about threads in which case those wouldn’t matter.

It could also go the other way around. You could assume Threads will be the new place to be, but your customers don’t care at all. In which case you will have wasted a lot of time and resources taking a position that doesn’t have any strategic relevance.

In all, I’m going to say that overall, this competition is good for us.

Competition - and I mean real competition, not competition in the way that car companies call themselves competitors but really form oligopolies and cartels - creates chaotic environments. And in chaotic environments, there is an opportunity for smaller players to get valuable positions.

If Twitter and Threads have to split up and divide the category I suspect these few things to happen:

1. They will compete to incentivize great content creators to jump on the platform.

Twitter is already adopting the strategy of doing revenue shares with their creators.

Thread’s strategy, I’ll assume, is to make the change extremely easy for new users (you can use your Instagram account to log in, and you can just copy and paste your Twitter content) and encourage them with cheap impressions.

I have a hard time believing Meta will suddenly decide to start sharing revenue with creators on the platform.

2. Threads will bring a lot of new consumers back into a tweet-style written format.

Instagram has 1.2B monthly active users compared to Twitter’s 450M monthly active users (keep in mind this number has been growing since Elon’s takeover). Meta’s launch and product strategy has been to make Thread’s a subset of Instagram specifically.

What that has meant, and the reason for the skyrocketing growth, is they are dragging their Instagram users over to Threads. From Instagram, there’s a 2 click process to create a Threads account. In that basket, there are potentially a lot of users who will join threads, who were never very active on Twitter in the first place.

If your marketing strategy has been mainly on Twitter, this should excite you because it’s the same format of content for completely new users. That means operationally, it’s a few extra pennies to get content distributed to a whole new audience.

In other words, if you are already pursuing a Twitter content strategy, it’s a cheap and worthwhile hedge to be pushing yourself on Threads as well.

How to approach the land grab

The next question is how can you take advantage of the opportunity?

In general, one of the rules of chaotic environments is that there are no standard operating procedures. By the time there are guides on how to act in the environment it is no longer chaotic and most of the opportunity is off of the table.

The lack of best practices stops most people from participating. For example, right now on Threads, there is no desktop version and no API.

That is going to stop most creators and companies who rely on 3rd party software to engage on social media platforms efficiently.

If I, for example, wanted to write content on my computer (which I normally do) and then post regularly to Threads, I’ll have to copy the content from my computer to my phone, and then paste it to the Threads app (which is exactly what I’ll do).

That little piece of friction will likely stop most people. And especially companies that have SOPs for their whole content creation process.

That leaves a ton of room for the scrappy players who understand that there is friction because no one else is doing it yet.

As soon as Threads launches its API (which they will do soon), and all the 3rd party social media tools adopt it as a network, then it becomes easy for everybody. And easy for everybody turns into a lot more competition on the battlefield.

In other words, it will be difficult because there are no tools that create efficiency but easy because that will deter most of the competition for attention on the platform.

The thing is, Threads is identical to Twitter. So everybody who is familiar with Twitter already knows how Threads is supposed to function. For that reason adoption will be quicker than say TikTok which had a new format people had to get used to creating for.

If we had to break down a Threads strategy based on first principles it would look something like this:

1. Act fast before everyone else starts competing with you.

2. Prioritize quality product (content) and let the larger factors at play be responsible for growth.

3. Build relationships and alliances early with the people participating in the land grab with you. A lot of people will build big distribution networks on the platform, and right now they are not getting a lot of requests.

Conclusion

At the end of the day, we can have an educated guess on whether or not Threads is here to stay or a flash in the pan. But they are still guesses.

Instead of assuming and going all in or rejecting the idea altogether, it’s better to do an analysis for yourself and see if given the possible pros and cons, is it a responsible choice for you to spend resources on a chance like this.

Take the time to figure out how much it would cost in effort and resources to implement a process for this new channel. If the cost is greater than the potential reward divided by the probability it happens, then don’t commit and keep going your course.

One of the first projects when starting a new venture is validating your idea in the marketplace.

This means you make sure there is a customer who wants what you have BEFORE doing all the work and investment to build it out.

It’s a well-known step in the process. Still, most people (even those with multiple successful launches), have a hard time articulating a process for it.

The reason is simple. A product’s validity is not absolute. It is dependent on relative factors, both internal and external.

Some of those factors might be:

1. Is there a similar solution that’s preferable to the potential customers?

2. Are there direct competitors in a better position than I to sell this solution?

3. Is the problem big enough that I can make a profit selling a solution?

4. Do I have other opportunities that are more “valid” than this one?

Only after understanding that validation is relative both to what is available to the market, and what is available to us, can we begin to validate ideas wholly.

Here is a 4 step process that you can use to validate either a product you already have or one you are thinking about building.

Step 1: Identify the use case and customer

The first step to validating a product is thinking through who will use this product and what will they use it for.

This step should never be skipped because without it we are aimless in our approach.

Imagine you were building a software product for accountants, and to test whether or not they wanted it, you put flyers out at a local gas station.

Although there may be accountants that go to that gas station, it’s not likely that the approach will be effective.

In other words, the data that comes back from your campaign will tell you there is no room for your idea in the market.

The reality is there might be, but the experiment was ineffectual.

That is why the first step must be brainstorming use cases and target audiences. And preferably you identify more than one to test with.

If you want to know how I approach finding my target audience, I recommend this post.

Gigantic Lies You’re Told About Getting Your First 100 Customers

And a real strategy that's easy and effective.

adamkstinson.beehiiv.com/p/your-first-100-customers

Step 2: Turn the problem into the pitch

Once you identified your potential customers. The next question is what are you going to say to them?

This might seem easy, but that’s not exactly the case. “Hey, do you want to try this software?” isn’t really a compelling approach to people who are generally always getting pitches.

For any marketing campaign, we first need to understand what is going to resonate with our audience and compel them to solve their problem with our solution.

And to do that, we need to understand what their problem is. Fortunately, there is a simple process we can use.

It all starts with our target’s dream outcome. For our accountants, it may be that they want to increase their number of clients while decreasing their work. The dream outcome is usually something in that genre.

Then we want to think through all of the obstacles that stand in the way of our accountants achieving their dream outcome. Here are some examples:

• As their client book grows, they will become disorganized and be able to handle less

• They don’t have a method of putting processes in place so they can begin to automate and delegate their workload

• To serve more clients their operational expenses might grow, reducing profits when the goal is to increase them.

For your own project, don’t stop at three bullets. Get as many of their problems down as you possibly can.

Then look for the problems/obstacles that your new product idea has a direct hand in solving.

Next to those problems, write out how your product solves those problems.

Once you have the solution side of your problem/solution matrix you want to write it out in the present tense. In other words, you want to write them out as benefits.

“Be organized enough to handle twice the client load with zero less time.”

“Move your business from a one-man show to a well-oiled money-making machine.”

“Increase your business’s revenue without increasing your expenses.”

Keep these notes handy, because they basically make up a messaging guideline that you can use when having conversations with potential customers.

Step 3: Start with the simplest form of marketing

Now that we know who we are targeting and what our messaging would be, it’s time to actually put our idea to the test.

There are a lot of different methods to validate ideas. There are literally limitless creative ways to get the job done. Yet I find the obvious solutions to be the best ones.

I recommend creating a list of prospects and doing cold outreach. This way you don’t need to build an audience, pay for ads, do SEO, or another grueling long-tail form of marketing. Just get straight to the point.

Find where your audience “hangs out” and hit them there. That might be LinkedIn, Twitter, Instagram, Email, or some other channel.

Remember, whether or not a business idea is “valid” is relative to other options and opportunities. So we want to be methodical in how we do our outreach, so we can compare our results.

You will run tests against other ideas. So the tests need to be uniform. For example, you’ll want to pick 100 people within your target audience and hit them with the same messaging.

It’s better to use a simple outreach message like:

“Hey (Name). I’m building software that helps with (Problem). I’m just reaching out to see if this is an actual problem that you have, or if I should drop this and move on to something else. What do you think? Would this be helpful to you and your business?”

Notice that I’m just asking them straight up to validate this idea for me.

From the responses, you’ll get a pretty clear idea of whether or not your target audience actually cares about solving this problem.

But a bunch of yeses is not necessarily validation. From there I would ask all the people who say yes to take another step down your funnel. If you have a waitlist ask them to join, if you already have an MVP ask them to try.

You can at this point just ask them to purchase your product to get real conversion data, but if you don’t have that option available yet because you are testing multiple ideas before choosing one, joining a waitlist is decent enough primary data.

Step 4: Rinse and repeat a few times

Next, you want to do this over again with:

1. Different product ideas

2. Different use cases and audiences for the same idea

Because you are testing multiple ideas and multiple audiences, it’s important to keep the experiments small and simple.

I highly recommend using a similar message structure the whole time. Otherwise, you may poison your data.

What we are trying to accomplish is determining what is the best product idea for you to pursue. If you are changing the messaging around then you might merely find that your marketing was better for one idea compared to another. The idea with the worse marketing might have actually been the product with the better product market fit.

All we want to test for is product validation. So make sure the experiments are controlled to only test for that particular metric.

The metric that you analyze should be the same across each test.

If you are testing for how many people join your waitlist, make sure you are using a waitlist for each experiment.

If you are testing based on positive responses, then continue to test based on that.

Assuming you are tracking your inputs and outputs correctly, I recommend a simple spreadsheet, you’ll see out of 100 outreaches which idea resulted in the most positive results.

For Idea 1 maybe 8 out of 100 joined your waitlist. That in itself is not a bad performance.

But if you found that for idea 2, 12 out of 100 people joined your waitlist, then the second idea is 50% better than the first.

The same goes for the different use cases and target audiences.

Conclusion

One of the main reasons it is hard for people to articulate a method for testing validating products is that they see validation as a binary and not a relative score.

But ideas or products are not good or bad. They are good or bad in relation to the ideas or products they are competing with.

Once you understand that you can move from thinking, “This idea is valid” to “This idea is better than all the other ones I have.”

For 20 years Silicon Valley VCs have been preaching a toxic startup gospel.

In this newsletter edition, I’m going to break down a core pillar of that gospel and why you should ignore it and pursue a different set of business principles.

First, let’s go over their incentive structure and why you should suspect their motives, then we will go over what VCs are teaching poorly and how Indie Hackers and solopreneurs - or anyone who doesn’t plan to raise venture funds - should be thinking differently.

What VCs want you to build

Even though VCs have become the arbiters of what makes a great startup, they are not incentivized to help us build great companies.

In some sense, that depends on how you define a “great” company. But for most VCs profit is not something that would be heavily weighted in their analysis of what makes a company great. And if the goal of a company is not turning a profit, it’s as much a Ponzi scheme as a company.

That’s why the startup community has been so vulnerable to people like SBF, Elizabeth Holmes, Adam Neumann, and Billy McFarland, along with the hundreds of web3 rug pulls and no-name entrepreneurs who had just as shitty ideas but never made big enough news to be mentioned.

VCs don’t make money when a company makes a profit. All their money comes from valuation and liquidation events.

Their term sheets with their limited partners are usually something like 2/20. This means they take 2% fees on what’s under management annually, and 20% of the profits made via their investments.

In this situation, they make the most money by increasing the on-paper market value of the business. Very different attitudes than Warren Buffett and Charlie Munger, who insist on investing based on a company’s intrinsic economic value.

In a second we will get into how the VC incentive structure has infected the minds of entrepreneurs, but first, are VCs wrong?

Well if there is an intellectual debate between Berkshire Hathaway and Andreeson Horowitz on what makes a business great, you’d be silly to side with anyone other than Warren and Charlie.

Warren and Charlie built one of the top 10 largest companies in the world by market cap from Omaha Nebraska.

They did this with less than 15 people at their headquarters. And at the end of the day, you’d think that the largest shareholders in a company like Apple would be VCs.

But no. At the height of Apple’s dominion, Berkshire is the biggest shareholder, not a VC even though all they had to do to keep the title was hold.

So if you are trying to build a company for yourself, and you are not going the VC route, you should stop reading Paul Graham, Andreeson, Naval, Reed Hoffman, and Peter Thiel.

Instead, you need to accept the gospel of Warren Buffett and Charlie Munger.

So what is the common advice given by VCs that you should avoid?

Don’t Worry About Profit.

There is a fundamental attitude among silicon valley startups to save profit for last. They claim to have a good reason for this.

VCs don’t like profitable companies because then accountants will set the value of the business.

Instead, they want sales and marketing people (fundraisers) to set the value of the business. This way they can claim the business’s potential as the business’s value. The net result is delusion. The business is valued based on intangibles because the tangibles are lackluster and not very compelling.

They also don’t want you to make a profit because that might deter you from fundraising. Every seed investor’s goal is to get you to your series A. Your series A investor wants you to get to your series B, and so on it goes.

A good example is Facebook. Zuckerberg was raised by VCs. You can see it in his decision to spend $250B on a metaverse that never took off and he ultimately abandoned. He thought we was still playing in a delusional land.

But with rising interest rates the veil of delusion dropped and investors could finally see again that profits are what really matter.

Facebook, a company perfectly capable of turning out incredible dividends to its investors, lost 60% of its value in a matter of months.

Though, after Zuck begged and promised that he would focus on prioritizing the shareholders with buybacks and spending cuts, the stock went up 98% in an equally incredible amount of time.

If you want to build a product for short-term investors to make money off of, don’t worry about profits. If you want to build a company, on the other hand, profit is exactly the metric to focus on.

Conclusion

One of the hallmarks of a good strategist is understanding what rules, practices, customs, principles, and laws apply to you and which ones don’t - we will call those things ‘gibberish’.

If you are mindlessly taking in the gibberish of the day, thinking they apply to you as well, you’ll never get where you want to go.

The key is zooming out so you can see the entire chessboard. To a VC, a startup is a pawn. Sometimes one of those pawns makes it to the back of the board and becomes a queen, but the game is not played in the best interest of the pawns.

In the book, Rich Dad Poor Dad, Robert Kiyosaki makes the claim that the rich don’t work for money. The rest of the book is spent shedding evidence on that claim and shows you how it is they do make money.

The essential “how” is the rich acquire assets that produce cash flow for them.

24 years later that still holds true. But since then we experienced a tectonic shift in what kind of assets are available to the common person.

The rich buy assets that make money for them, but now there’s a whole new class of rich. The new class of rich are people who use robots to make money for them.

In another 1999 book, The Sovereign Individual, the authors predicted that by this time every individual would have an army of robots at their disposal. They also predicted a digital currency that looks eerily similar to Bitcoin, and that information work would be easily bid out at a task level to everyone in the world.

Most of their predictions were spot on.

In this newsletter, we are going to explore the different ways we can use robots to make money for us.

Because basically all work on the internet could fall in the bucket of “using robots to make you money.” I want to be more specific.

1. Because this is using robots to make money, this is going to be about identifying actual revenue-generating tasks and automating those.

2. I’m a non-technical person, so everything I mention won’t require coding. Though if you can code, you might see ways to take this method above and beyond.

Find what actually generates revenue

If you haven’t already figured this out, in the process of building your company, although a lot of different types of work are important, it is in reality only a few that actually contribute to generating revenue.

You could call this Sales and Marketing, but even then only a portion of sales and marketing tasks actually make money. And if you want to build robots that make money for you, you first have to identify what tasks actually result in revenue.

This is more or less the 80/20 principle. And it’s extremely important that this work is done first and correctly if you want to automate your income.

That might sound obvious when you read it, yet when most people begin automating they tend to focus on automating operations hoping that will result in more money. It’s akin to the “build it and they will come” mindset.

Automating operations is for stopping money from leaving the door. It’s saving.

Automating sales and marketing is for bringing new money in the door. It’s growing.

At the end of the day, the only way you actually make money is if someone takes out their credit card and puts it through your payment processor. And that’s important to pinpoint because that’s what we need to work backward from.

The trick to building a system that produces revenue (without taking forever to build an audience on social media, or writing for 6 months to get SEO traffic) is to write a process in which the potential customer goes from being identified by you to closing in as few steps as possible.

You can call this a funnel if you’d like.

The key phrase here is “as few steps as possible.” It’s really easy to get caught up in a notion of omnichannel marketing and make this a way bigger project than it needs to be. We want to avoid that, especially at the beginning, and move from there.

Good ideas are complex. Great ideas are simple.

Some examples of really simple funnels:

Facebook Ad → Checkout Page (Maybe a landing page in between)

Cold Email → Book a call → Close client

Cold Twitter DM → Email Opt-In for resource → Email sales funnel → Checkout Page

That last one is even more steps than we would want ideally.

Blueprints come first

This is where I and much of the start-up community differ.

A lot of people in the startup community parrot advice like:

• Do a lot of experiments fast

• You don’t need a plan, you need to take action

• Start first and figure out the plan later

But marketing is no mystery that you need to personally rediscover. The craft is already well established and although there is room for innovation, it is not a necessity to succeed.

People who “move fast” can generally capture a lot of land, but it’s hard for them to capture a lot of value.

Instead, we want to create a blueprint for our campaign based on the best practices and fundamentals of sales and marketing. Life is easier when you take the time to get things right the first time.

Our blueprint will essentially resemble a simple customer journey. The things we need to know are:

• Who is my target audience, and how will I identify them?

• How will I get their attention?

• What is my message to them?

• What action do I want them to take?

You’ll know your blueprint is well done if you could hand it to someone else and they can appropriately get the job done.

A good tip here is to make the campaign simple (as few steps as possible), and then provide a lot of detail on how it should unfold.

To give an example, I have a campaign running to grow this newsletter. It’s extremely simple.

I reach out to new followers on Twitter and have a short conversation with them. Within that conversation, I qualify them as a good fit. If they are, I ask them to subscribe. If they’re not, then I’m just having a conversation with a person.

This campaign turned out to be extremely effective. About 1 out of 5 cold DMs turns into a subscriber. So now, I’m working through scaling that campaign by automating the actions that get people to follow me on Twitter.

One of the reasons that campaign works so well is that I focused very much on the fundamentals.

• Who is my target audience, and how will I identify them? → Indie Hackers and Solopreneurs, create a list of people who have those keywords in their bio (ended up being upward of 100K people on that list)

• How will I get their attention? → Engaging with them on Twitter to attract them to follow me.

• What is my message to them? → My newsletter will teach them practical business strategies they can actually apply

• What action do I want them to take? → Subscribe to the newsletter

You can get away with having a short 4 bullet-point campaign plan like this one. Personally, I have a 1-page document detailing who my target audience is and where to find them, a 1-page document for how to attract them to me on Twitter, and a 1-page document for my sales messaging.

Once you have those fundamentals in place, you should be able to create a “visual” representation of what the campaign will look like from the customer's perspective. If you’re an actual visual person then you may want to build a flow chart. I prefer writing down the steps.

Automating for maximum leverage

Once you have identified the shortest route to closing a new customer and have your basic blueprint, the next step is to figure out what to automate for maximum leverage. Some campaigns are more self-explanatory than others.

For example, if you are doing Facebook Ad to a checkout page, there is really not much custom work to do there. The downside to a campaign like this is the cost of ad spend. But if you can make this profitable, it’s very easy to scale.

For other campaigns, how to automate it or what exactly should be automated can require more thinking.

Even if you have the best marketing campaign in the world, it’s always going to be a case that a minority of the people that see step 1 are going to move to step 2. Then, again, a small portion from step 2 to step 3, and so on.

In other words, a Facebook ad might have a click-through rate of 1% and your checkout page might also have a conversion rate of 1%. Those metrics are pretty average. That means 10,000 people have to see your ad to make 1 sale.

Something like a cold dm or email, though not that dramatic, is going to have a similar output. You might have a 4% response rate on email and a 10% response rate on Twitter DMs. Of the people who respond, you may be able to get 10% of people to make a purchase.

So if you’re doing a Twitter cold DM campaign at 10% for the first part and 10% for the second, you need to send 100 cold DMs to make one sale.

The fact that only a portion of leads move onto the next step of the funnel shouldn’t be a surprise to anybody. It’s pretty basic. But it’s one of the basics for a reason.

If you know you have to send 100 DMs a day to new prospects to get one sale…. Well, how many sales do you want to make a day? 10? Then you have to send 1,000 DMs a day. (I’m pretty sure Twitter caps you out at 400 so this isn’t exactly possible without some creative maneuvering.)

Go ahead and try to do that manually. You’d probably cry after a couple of days. I would.

In a simple 2 step campaign like that, the automation of the highest leverage is always going to be the cold outreach. Because that has to be done at a sufficient scale to move the needle.

And that’s great! I love something that simple.

The largest number of human interactions is almost always at the top of the marketing funnel. But that doesn’t necessarily mean that’s the highest leverage place to automate your work. It might be the appointment-setting aspect with a chatbot or something like that.

As a general rule to help figure out where the highest leverage automation is, ask yourself 1. what would produce the most results if I could do it 1,000x a day, 2. what takes up most of my time.

Conclusion

This might seem like more of a tactical newsletter than a strategic one. But I would push back on that. I think this is a good strategic approach to building an automated, or semi-automated, digital asset. Some of the most important aspects of this strategy are:

• Keep the entire business model - if you can call it that - as simple as possible with as few pieces as possible.

• With as few pieces as possible, try to make those really high quality (focus on the details)

• Get the fundamentals right, and let best practices take care of themselves.

• The most important part of this process is identifying where a robot is going to help you create the most revenue.

Everybody has advice on how to get your first 100 customers.

Build something great and customers will find you, is probably some of the most toxic startup advice someone could give.

Some other horrible tips for indie startups are:

• Start by building an audience

• Focus on SEO

• Build in public

These approaches aren’t inherently wrong, they’re just strategic blunders for a bootstrap founder looking to get to ramen profitability (making enough money to survive) and beyond.

I’ve decided to break down these growth myths and provide you with a legitimate framework for getting customers on a daily basis while building momentum that compounds over time.

I could say that I know what I’m talking about here because of my 5 years working up the ladder of a Growth Hacking agency, having led 50 growth campaigns in the last couple of years alone. But the truth is different.

The truth is, this isn’t about growth hacks. It’s about getting back to the fundamentals. “Acquiring” customers on a first principles basis. Then using technology to scale and compound.

The thing is, most people won’t do this because it feels like more work than building an audience or getting SEO traffic. That’s incorrect.

In situations where you don’t have leverage (you don’t have a huge ad budget or a built-in audience), this is the fastest way to get momentum and start making sales.

If you don’t do this, you’ll fail. I guarantee it.

You’ve probably heard people say you need to “niche down.”

You’ve probably also heard things like:

• Identify your target audience.

• Create a customer profile or persona.

• Build a customer avatar - primary and secondary.

• Figure out where your ideal customer hangs out.

• Find the hashtags your customer uses

• Pick keywords your customers are searching

I’m going to save you a bunch of time chasing your tail with all that vague marketing lingo.

What you need to do, exactly, is pick a target audience that you can easily identify online based on their public profiles.

This will force you to do a couple of great things.

The first is be extremely specific with who you are targeting.

The second is push yourself toward a target audience that is easy to identify.

If you can’t do both of those things, getting customers is going to be a painstaking process.

What does this look like in practice?

Let’s say I’m building another productivity software for busy internet professionals. Hypothetically, this tool saves people time by automatically organizing their work or schedule based on priority.

With a product like that, it would be really easy to say, “Well this is a tool for everyone who works…”

But that’s a BS answer and provides you with absolutely zero strategic direction.

In other words, pursuing that strategy would be the most expensive way to acquire customers and you would leave yourself vulnerable to every software giant (Google, Microsoft, Clickup, Notion, Asana, Trello, Basecamp) that makes “productivity” tools for basically everyone with a computer and a job.

A much better approach is to identify who your tool is most useful for and who no competitors are targetting, and then build everything around them.

For example, Virtual Assistants in the United States.

This is going to allow you to do a few things.

1. Produce the rest of your marketing materials (like problem/benefits, messaging guidelines, etc…) because you have a set of people with problems and goals that are similar.

2. Find those people with relative ease.

Take a peek at this.

A quick hop over to LinkedIn, search “virtual assistant”, and filter for the United States.

And here we have 93,000+ real leads.

No need for avatars, personas, and profiles. Instead, we have a list of actual people who would make good customers for our product.

And this was just a fast LinkedIn example. Using different search tactics we can do the same thing on virtually any social media platform.

Another way to look at social media is basically as a prospect directory. Which it is.

To take it a step further we want to scrape all the people in this search criteria and get them on a spreadsheet. Creating what’s essentially a CRM.

I do this with the tool Phantom Buster.

Now, obviously, 93,000 people is enough to build serious momentum. It might actually be better to find another filter you can use to make the list smaller.

Since I’m in California, I might narrow my search to California so the list is smaller and I have another point of relation with them.

Put your sales hat on.

Now that you have a list of actual leads, that’s how we want to treat them - like leads.

And by that I mean we’re not going to hit them with ads or try to write content to resonate with them hoping they click through and buy our product.

Instead, we are going to use the native tools of the platforms available to us to manually push them through the sales funnel.

In general, a sales or marketing funnel looks like this:

1. Someone becomes aware of you or your company.

2. Through interaction, they learn about your product and the problem it solves.

3. They are encouraged to make a decision and purchase.

Awareness. Then consideration. Then conversion.

The thing is, there is a very natural progression of this that can happen on social media.

For example, I can make someone aware of me on Twitter by following them, liking their tweets, commenting on their posts, commenting on posts that they are likely to read, or DMing them directly.

I can make them more considerate if they look at my profile, maintain a conversation with me, and/or follow me so they see more content.

Then I can push them to convert by putting CTA on my profile or content, as well as closing them in the DMs.

Now. If you’re doing all this passively, it can take a long time to pull someone all the way through your marketing funnel. But… If you’re doing this actively, you can get people through your sales funnel in a few minutes.

Thus, we want to do this actively. Nudging our leads along the way so we can start bringing in new business.

What does that look like in practice?

Here’s what this sales funnel might look like with our virtual assistants on LinkedIn productivity tool example. but know that it’s going to look similar on virtually every platform. Though specific pieces will need to be adapted.

The first thing I would do in our example is change my LinkedIn profile to resemble a landing page.

In other words, it’s going to be caked with things like:

“I help virtual assistants make more money by getting more done in less time.” (Don’t copy that line… I’m using it to make a point, but it’s bad copy.)

The banner is going to reflect that core audience and core benefit, my about section is going to show how I keep that promise I’m making in that bold claim, my “featured” section is going to be Call-to-Actions that lead people to a free trial or something. And my “recommendations” are going to be other VAs that swear by the product I’m pitching.

I’d show screenshots, but seriously just Google (or ask chatGPT) “how to optimize my LinkedIn profile for lead gen” for thousands of examples.

The next step of the funnel is just as simple. I’m going to reach out to them. But I’m going to do it in the way that feels native to the platform.

• Make a connection request

• Like their post (if it’s recent)

• Comment on posts of people they are likely following.

The whole point here is to get them to follow you, or in the case of LinkedIn, accept your connection request.

Once they do that, it’s perfectly acceptable to open up a conversation with them. And keep in mind, this isn’t a normal conversation. It’s a covert sales conversation.

The opening line should be non-threatening and simple.

On LinkedIn, I would just say, “Hey, glad to connect. What are your goals on LinkedIn?”

After you send 20 of those kinds of messages, you’ll see they all have the same few responses. Something like, “My goals here are to improve my business through making valuable connections.”

At that point, I’d usually acknowledge what their response was, and then ask them another question. “What stage are you at in reaching your goal?” or “What’s your biggest challenge right now?”

At that point, their pitch protection antenna is probably down, and they’ll give you an authentic response.

In the ideal case, they’ll reciprocate and ask you what you are working on or what your goal on LinkedIn is.

That’s the point where you’ll tell them, indirectly, that you’re building a company designed to serve people just like them. And you can ask them to take action.

It’s better if the action you ask them to take is one step further

down your sales funnel, and not necessarily the sale itself.

Here’s an example of some conversations I’ve had on Twitter that match this outline perfectly. My goal on Twitter is to get people to subscribe to this newsletter.

In fact, if you’re reading this newsletter right now, you’re probably one of the tens of people who I’ve had a conversation like this with in the past couple of weeks.

With this method, you can start moving people down the sales funnel really quickly.

Notes on this section:

• Just like any sales or marketing, this is a numbers game. Expect to send 10 conversation-opening DMs to get 1-2 results.

• Don’t come off pushy, but always make the ask. Don’t ever assume that because you had a short conversation with someone, they’ll go to your profile and subscribe to your newsletter.

• Sometimes it’s appropriate to make your ask on the second message, sometimes you’ll wait until the 10th to find a more natural opening. Do your best to leave a good taste in the mouth of the people you’re talking to.

Scale the things that don’t scale

So far what I’ve advised you to do is basically the same advice as: Do things that don’t scale.

The only other thing I would say on top of that is: once you are doing things that don’t scale, scale them.

That may sound odd given these are things that “don’t scale.”

But you gotta remember that scale used to mean something else before tech. It used to mean improving efficiency through better processes. And that’s exactly what we want to do here.

If sending 10 DMs in one day results in 1 free trial activated, the question becomes how can we send 100 in a day?

To a marketer, this generally presents a challenge.

But to an engineer the answer is obvious - automate it.

Most people hear automated DMs or emails and immediately their SPAM radar starts popping off. But as we mentioned before, we’re just automating a conversation opener.

In the sales context, it’s the equivalent of automating your prospecting. The problem comes when you try to automate your pitching.

For a developer, it may make sense to build your own automation tools to get this done. For a non-developer like me, I recommend just using a tool like Phantom Buster.

The trick here is to only automate what you would naturally do. A good automation provides a ton of leverage, and bad automation provides a ton of pain.

Here are some examples of automations I would run at the top of the funnel to push people closer to conversion.

1. Auto-following/connecting: Do this at a low rate. You can always unfollow them later.

2. Auto-liking: Make a short list of a thousand or so people who are active and appropriate (don’t want to like posts of people who just post controversial stuff. It reflects poorly. Vet the people in your automation).

3. Auto-DM people who follow you or connect: Again, doing this wrong is an easy way to rub people the wrong way. Just open up a conversation. Everyone that follows you is a lead, not a follower.

4. Auto-DM people who like one of your posts: When someone likes your post, they’re saying they are paying attention. And that’s an easy conversation opener.

One thing to keep in mind, is that there will be limitations to how much activity (manually or automated) you are allowed to do on each platform. Always play it safe. Social media is a long-term game. You never want to put your account in jeopardy by pushing the limits of what a platform allows.

Social media platforms hate spam. But they love keeping users engaged on the platform. If you can help them keep their users engaged, they will reward you. Regardless of whether or not you were using automation the whole time.

Once you are reaching an activity cap for a particular platform, apply the same strategic thinking to another platform.

Although the outline for the strategy will remain the same, switching from say Twitter to LinkedIn will force you to rethink some things.

• You’ll need to create a new list creation method

• You’ll need to change the context of your outreach to match what people are on that platform for.

• You’ll need to change the actions that you’ll ultimately automate.

• And each platform has a different tolerance for activity that you’ll need to research and keep in mind.

After you’ve successfully taken your campaign omnichannel, if you’re lucky, you’ll feel overwhelmed with good conversations.

There are 3 things I highly recommend to help you manage the inflow of conversations.

1. Use texts.com as a tool to pool together all your inboxes and manage conversations from one place. This will help you not miss conversations by forgetting to check a particular platform.

2. Use an adaptation of Inbox Zero communication methodology and archive conversations where no action is needed from you. This will help you declutter so you don’t miss important opportunities.

3. If you find yourself saying the same things over and over again - which you will - save those messages as templates in a document that you can pull up while you’re in these conversations. This will save you a bunch of time.

This is an extremely boots-on-the-ground approach to digital marketing. And it’s an extremely effective way to create initial momentum for that reason.

The biggest benefit of doing your marketing this way is the sheer amount of conversations you’ll have with prospects and future customers. That kind of first-hand data is hard to come by. You’ll build real and lasting relationships with customers who you can call on for help and feedback when you wish.

That said, this is a strategy for the initial phases of getting momentum for your product. It is not a suitable forever growth strategy.

This leaves us with the question. Where do you go from here?

Compound your marketing results with layers.

Marketing, like all investing, is a decision on how to allocate your capital (or time and effort). And the thing about investing is that it compounds.

If you’re selling something with a monthly recurring fee, it’s obvious to see how this kind of activity over the course of a year can compound on itself.

Regardless, there are ways to speed up the compounding effect of your marketing efforts by leveraging your baseline activity with an additional layer.

If you pursue the strategy I just laid out above, you’ll be making tens of connections per day with potential customers. And you’ll be doing that mainly on social media platforms. There’s an obvious additional layer of marketing we can do here to speed things along: Content Marketing.

As you make connections with ideal customers day by day, even if those people are not engaging with your messages, the likelihood that they will start seeing your content goes way up. It’s an opportunity to nurture your prospects you don’t want to miss out on.

Even then, the possible layers continue. All those people you convinced to start a trial, schedule an appointment, or subscribe to your newsletter likely gave you email, or are now in-app, or phone numbers. These of course are additional marketing channels you now have a captivated audience on.

A referral campaign, or affiliate campaign, or UGC campaign are all viable ways to leverage the 1 to 1 audience you’ve built to get more reach.

Once you start building momentum, the doors open up to all kinds of marketing tactics. That’s why I like the layered approach to building an audience.

The cold outreach or 1 to 1 marketing approach is extremely effective, and once you have an audience, no matter how small it begins, it’s easier to continue to grow it.

Conclusion

This was a long edition of the Indie Strategy Newsletter and I hope you can take these strategies and absolutely crush it.

If you need it, here is a recap:

About a year ago my partner and I started a business based on asking ourselves versions of these 5 questions.

The results were our business did $100k in revenue by month 2. And it kept going that way for 8 months. Eventually, our thining margins took us down. Something we would have foreseen had we done a proper competitive analysis.

But that’s a story for another day. For now, here are the 5 questions that lead us to a home run offer.

1. Is your target audience refined enough to easily find them online?

The easiest way to get more customers - Yes. Easier than running ads or building an audience - is sending a cold dm or email and asking if your product is something they would be interested.

The thing is, if you can’t pinpoint who your customer is, you have no way to message them.

When I started the Indie Strategy newsletter I went all the way from online entrepreneurs, who you could categorize into hundreds of different groups, to Indie Hackers. For starters, that allowed me to put Indie in the name, which they all appreciate because they know it’s for them. But it also made it extremely easy to find them on places like Twitter, LinkedIn, Reddit, and Indie Hackers.

And easy to find meant easy to reach.

2. Are you differentiated from your competitors in any meaningful way?

In an annual shareholder letter Jeff Bezos said, “Differentiation is survival.” He didn’t discover some secret. He learned it from the successful businessmen that came before him.

Find a way to make yourself meaningfully different from your competitors so your customers don’t compare you.

My partners and I used to run a run-of-the-mill digital marketing agency. Taking any client that would have us.

It wasn’t until we first picked a smaller audience that was easier to reach, and second, decided to make our service decidedly different by providing on-demand leads instead of marketing services that we were able to scale.

3. Is your offer powerful enough to command higher prices?

How much you can charge depends on how much risk you take away from your customer. If you design your offer such that you are taking on the majority of the risk, your customers will pay you whatever you want.

If you are charging commodity prices, you will earn commodity profits.

Some of the most successful clients we ever had at our marketing agency were the deals where we took all the risk away from the client. They paid us nothing upfront. We only got paid based on our results.

Because we charged them nothing up front, they signed the contract like it was a no-brainer. In the end, they would have paid a lot less if they gave us a retainer upfront.

4. If - gun to your head - you had to get rid of 80% of your work, which 80% would you get rid of?

We’ve all heard about the 80/20 principle, yet we believe everything we do is important. Only under force can we lift the emotional vail off of our work and figure out what is truly not contributing to our ultimate success.

The hard part is forcing ourselves not to do things that don’t matter.

After 200+ marketing clients, the hardest lesson to learn was how much time we wasted. Looking back it was mainly wasted on being disorganized.

Disorganized with what our service was, how we communicated with our clients, how we managed work internally… Once we found the waste and invested in getting rid of it, we were able to charge less (which meant closing more deals) while still making a similar profit.

5. If I died tomorrow, could someone else take over where I left off?

Often called ‘the bus test’ this question will force you from self-employment into a business owner. Once your business can survive and grow without you, its value skyrockets.

This question is also last for a reason. Keep that in mind.

In each case where one of my businesses became more successful, it felt like the work became more and more draining. It wasn’t until I asked this question that I started to build business that made me work less, not more. But beware, asking yourself this question will virtually always result in an easy “no” if you don’t first go through questions 1-4.

Conclusion

If you want to build a better business then you have to ask yourself better questions.

What should you do if someone else is working on the same idea as you? I see a lot of solopreneurs and indie hackers ask that question over and over again.

The responses are usually horrible.

“Don’t worry about them, just keep building.”

“There’s enough room for both of you.”

This is a recipe for failure. We want to believe that nothing is a zero-sum game. Life is much more pleasant assuming there is enough room for everyone and your market will expand just because we decided to enter it. But that’s now how these things work.

The truth is, you need to be paying very careful attention to your competitors and your real strength in the market. If you don’t your idea will either never take off, or your profits will get stolen from under your nose from price competitions.

The key is to find yourself in a niche of one. That doesn’t mean that you don’t have any competition, but that you are uniquely different. Different in a way that adds more value to your customers and hold back competition. That’s the only way to truly protect your profits.

Here are the 2 ways to put yourself in a niche of one, and increase what Warren Buffett calls the intrinsic economic value of your business.

Counter Position Yourself

How many social media marketing agencies do you think there are?

How about online business content creators? or LinkedIn growth coaches?

The answer is a lot.

Hardly any of them are successful. And we would like to think that’s because the ones that aren’t successful aren’t working hard enough. — In other words, WE think success will come from more hard work.

They don’t wake up at 5 am and take ice baths. That’s why they’re not as popular as Sahil Bloom, or Tibo, or Andrew Gazdecki.

There are a lot of people trying to sell us that our success is a matter of personal development. And don’t get me wrong, that matters in organizations of 1 (or a few), because it’s all on us. If we don’t get work done, it doesn’t get done.

The truth is, not all businesses are created equal. Some businesses will make you way more money for way less effort. It’s the work of strategy to figure out what those easier - or “higher return” - opportunities are and take advantage of them.

This is where counter-positioning comes in. Counter positioning, like it sounds, means you are taking attributes or characteristics of your competitors and doing the opposite. It’s about making yourself different, so there is a reason for customers to choose you instead of their other options.

Last week I wrote about the positioning battle between Vrbo and Airbnb. That’s a great example of counter-positioning in action.

Summary: Vrbo owned the vacation rental market. When Airbnb came out they counter-positioned themselves by focusing on small stays and an app-focused user experience. When Airbnb took over leadership in the market Vrbo counter positioned themselves and dug into the position of focusing on renting entire homes. Throughout this war the entire market grew and so did both of their profits.

Niching down isn't about changing words

Business Strategy for Indie Hackers and Solopreneurs

adamkstinson.beehiiv.com/p/niching-down-isnt-about-changing-words?_gl=1*n47tja*_ga*MTAyNjc0MzIzMC4xNjgxNzY1NDk5*_ga_E6Y4WLQ2EC*MTY4NTQ2OTM0Ny41My4xLjE2ODU0NzExMjEuNTguMC4w

When there are very few players in your market, counter positioning can be simple. Your competitor does X so you do Y.

They're cheap? You’re expensive.

They’re red? You’re blue.

They have a zero refund policy? You do a full refund policy.

They have automated customer service? You have US agents on call 24/7.

When a market is more of a wild west environment (graphic design freelancers, content creators, to-do list softwares… and now anything AI) then counter positioning takes a different form.

There is only one way to counter-position yourself in an ocean of competitors. Any that’s to do something unique, that your competitors aren’t willing or aren’t capable of matching you on.

In this situation, it’s often better to think smaller than it is to think bigger. It’s what people mean when they say “niche down.” But what they generally leave out, is that you have to niche all the way down to the point where you are the only one doing what you do, the way you do it, for your unique audience.

It’s the process I went through before deciding that I want to teach business strategy to indie hackers and solopreneurs. Because they are the ones no one else is teaching this stuff to.

Winning The War of Attrition

There is one other way to protect your profits from your competitors. Though, it’s messier and generally more expensive.

It’s beating them in a war of attrition.

A war of attrition is a war where neither side has any particular strategic advantage or leverage. So the end result is usually whichever person has more bodies to throw at the problem wins.

You never want to fight a war of attrition as the little guy. You will nearly always lose. That said, you will likely still have to fight some.

Most businesses find themselves in a constant war of attrition, and that’s why 97% of businesses fail. It’s a losing prospect in most cases. Unless of course, you win. Then the reward is the crown. You take over the whole market.

For that reason, it’s best to avoid fighting them at all costs. But you should always be prepared to win them.

Advantages in these wars don’t come from product or market differentiation. Instead, they come from resources and efficiencies.

For example, John D. Rockefeller of Standard Oil always won the wars he fought in because he was a master at making the oil business efficient for him, and inefficient for others. He was so operationally efficient that no one could get a barrel of oil to a customer for cheaper than he did.

AI-generated drawing of an oil refinery

For that reason, he could get better, and exclusive, deals from the railroads that shipped his oil. Further widening his efficiency moat.

There are two common tactics for dramatically increasing your odds in a war of attrition.

The first is vertical integration. Buying ownership of every part of the supply chain, so it costs you much less to produce your product than your competition.

Some of the companies that have done this well are:

• Apple

• Tesla

• Standard Oil

• US Steel

The second tactic is bundling. And bundling usually comes from owning the distribution channels to your customers or prospects.

Some companies that do bundling well:

• Microsoft

• Adobe

• Intuit

• Google

For example, Microsoft launched Teams and stopped Slack’s growth dead in its tracks by giving it away to anyone who already had Microsoft Office.

Conclusion

As a solopreneur, IndieHacker, and bootstrapping entrepreneur, you’re almost always going to want to counter-position yourself instead of going to war.

The thing is, as soon as you take a position, and start to get momentum, you’ll have to defend it. This is why you should be preparing to fight wars of attrition by saving money and investing in future savings.

Niching down or positioning isn’t about changing a few words in the header of your website.

It’s about redesigning your business model to be centered around a hole in the market nobody else is filling.

Maybe your marketing is niched down to the market sub-set you are going after, but is your operations designed for them? Payment terms? Is your user experience specifically tailored for them?

Or… Are you exactly like your competitors other than the fact that you say you’re for a niched audience?

My favorite example of positioning right now is the battle between AirBnB and VRBO.

How the War Began

VRBO is older than AirBnB, but when AirBnB came on the scene, they outgrew VRBO without giving much holding them back.

Like any great new-leader story, Airbnb took over the scene by taking advantage of developments in technology before VRBO caught on. We see it as a Web 2.0 company disrupting the Web 1.0 leader, but really it’s a story as old as time.

They positioned themselves beautifully at the time by making the user experience app-focused. This meant they got a younger generation that was much more open to using resource-sharing platforms like Uber.

For a while, it looked like VRBO was going to die at the hands of disruption and innovation.

But whoever is running strategy at VRBO wasn’t interested in dying a slow death. They did everything right to retain their place in the market and continue to grow in revenue and profit.

When VRBO was the big dog in the space their positioning was simple. Some people want to make money on their second homes. They are a marketplace that gives these owners a chance to find rentals.

When AirBnB came on the scene, their positioning was more encompassing. To Airbnb, any space was an opportunity for collecting rent. This turned extra rooms into income-producing assets. Including campers, RVs parked in the forest, and tents in the desert. Virtually anything.

AirBnB expanded the market with its positioning bringing more customers to the space than VRBO could have hoped for when they were in the lead. It didn’t take long for all of VRBO’s hosts to start listing their properties on Airbnb as well.

From the outside, it looks like it took VRBO a while to recognize the danger they were in. But when they caught on, they didn’t fuck around.

You can almost sense the conversation the executives were having. Some competitive jack-off probably demanded they start competing on AirBnB’s terms. “If AirBnB wants to step on our turf, we’ll beat them at their own game.”

If someone did say that, they should get rid of them.

Instead, they made a much better decision.

If AirBnB was going to make everything a rental, then we would focus ruthlessly on our core, smaller, customer base.

They went on to redesign the company's branding, messaging, and positioning to prioritize serving owners of 2nd homes who want to build a hospitality business out of the whole property.

How Positioning Guides Their Marketing

In the Title alone, it’s made clear what VRBO stands for.

“VRBO only offers whole vacation homes.”

They’ve taken their position in whole vacation homes. Why?

“So it’s always just you and your people.”

They are calling out the idea of having a “host” be in the house with you on your vacation.

Why are they calling that out? Because that’s exactly what AirBnB is pushing the most right now. If you compare this marketing with where AirBnB is going in their marketing, you see they are pushing themselves in opposite directions to have a stronger position in the marketplace.

Note: Just through watching their ads, you can tell AirBnB is the leader in the market. The non-leaders in the market should always be differentiating themselves from the leader. This means attacking AirBnB’s value prop directly. Meanwhile, AirBnB, being the leader, will virtually never make any reference, direct or indirect, to their competitors.

Here is one of AirBnB’s most recent announcements. Watch this and see if you notice how different their positioning is.

They are staking their position on the idea of smaller rentals. Making renting where there is a host actively living there the strength of their platform, while VRBO is trying to convince people the strength of their platform is getting the whole place to themselves.

How Positioning Guides The Whole Business

So we’ve seen how positioning affects these two companies’ marketing, but how does it affect the rest of the business?

Right out of the gate, you can infer that because VRBO focuses on entire houses, their average price per stay is going to be higher.

That means VRBO can make more money on fewer customers. In a sense, they are the premium provider in the space.

From an accounting perspective, that means they can justify a higher cost-per-host acquisition. It also means they can spend more time and money servicing their fewer hosts than Airbnb can. Airbnb has 7 million stays, while VRBO only has 2 million.

I’m a partner in a company that runs a vacation rental in Indio, California. It’s listed on both AirBnB and VRBO.

Airbnb has automated or outsourced customer service in a way that’s in tune with the fact that they have a much higher volume of hosts and a smaller revenue per transaction.

VRBO has higher-touch customer service that you can rely on to help you solve your problems.

It’s not because AirBnB doesn’t think their customer service for hosts isn’t a priority, but they’ve chosen a higher volume, lower revenue per unit, position. That makes their customer service cost per unit much higher relative cost compared to VRBO.

Where Airbnb charges a commission to the host and the guest for renting, VRBO has an option for hosts to pay $500/year to have their commissions waived.

Airbnb charges its guests 5-20% whereas VRBO only goes up to 15%.

Airbnb has spent years designing its user interface for the variety of accommodations it has, while VRBO has a user interface focused on whole houses and promoting them.

What About You?

Picking a position or niche in the marketplace requires you to design your whole company around that position in the market to be successful.

If VRBO started modeling their company after AirBnB to compete with them, like slimming down the customer service for the sake of volume, adding experiences to their app, etc.. Their core customer base would have felt left behind and their platform loyalty would be in question.

Are you strategically positioning yourself for success? In the online business space, people often refer to this as “niching down.” What they mean is picking a subset of the general audience to focus on. But if niching down doesn’t extend past who you are targeting and the words you put on your website, it’s not going to create an impact on your revenue or bottom line.

Don’t just think about how to change your marketing to “speak to your niche audience.” Ask yourself, how can you change your product to be designed specifically for them? This is going to force you to spend more time getting to know the details of who your customer really is and what they care about. It’s also one of the reasons customer support is so important. Done correctly, it should guide you on how to increase profitability (adding value) by creating focus (reducing costs).

What most people don’t understand is that taking a position is limiting. You’re told that once you conquer your niche you can expand, but that isn’t true at all. Unless you find another position that’s strategically open and relevant to your original, you’re not likely to be profitable in your expansion efforts.

The end result of those limitations is that even know Airbnb is much bigger and creates more absolute profit than VRBO, VRBO is likely more profitable based on a percentage of revenue.

A business is a system that produces excess money. A system is a set of processes that work together. A process is a series of tasks. In other words, a business is just a complex combination of tasks put together.

Odds are, if you are a one-person entrepreneur or a small team, you never defined it that way. If you can’t define what your business is… Well, what is it then? A random recurring event? That doesn’t provide much comfort.

This edition of Indie Strategy will dive into why your organizational strategy matters - how you organize yourself will determine how work gets done. That might be obvious for big companies with large head counts, but it’s important for small teams and solopreneurs too.

It starts with getting organized. That’s why businesses are often referred to as organizations after all. Each day we deal with what’s in front of us, what seems important at the time that we are looking for something to do. An email comes in, so we deal with that. We notice an error on our website so we deal with that. We’re not sure how much money is in the bank account so we pivot to that. At the end of the day we’ve worked on a lot of random things that hardly produced any real results.

It’s up to us to organize our business environment so that we, or whoever is inside of that environment, is called to do work that creates the desired result. And that starts with figuring out what that desired result is, and what work will get us there.

Paying Attention

Once you’ve decided to pay attention to your goals, you’ve entered into the realm of strategic thinking. It’s a long and winding road, but it’s the only one that will help you hit the target you’re pointing to.

The “non-strategic” approach, where you haven’t decided what your goal is, is perfectly portrayed by this conversation between Alice and the creepy disappearing cat in Alice in Wonderland:

You have big goals like, “Build a business that makes me enough money to live comfortably, and only requires me to work 5 hours a day.” But nested inside that goal are tens if not hundreds of sub-goals. The more detailed those sub-goals are the better. Some legitament sub-goals might be:

• Reduce churn by 25% by the end of the quarter.

• Create enough additional value in our product to raise prices by 15%.

• Increase company profits by reducing our cost structure by x%.

• Get my first 100 customers by the end of this month.

The more specific and relevant the goals the better. The next step is to put together a plan (made up of tasks) for what tasks need to be done to reach that goal, and if you can’t put together the tasks, that’s a good indication that your goals are not specific or relevant enough.

The key to creating a plan to achieve your goal is working backward from the goal itself. It’s important to note that some goals will create plans that do not have an end date (ex: be known for great customer service, or publish a newsletter every week) in which case you’ll be designing a recurring workflow to make sure that is always being accomplished.

The process of creating a plan for a project and for a workflow is more or less the same.

Project Plan Example - Reduce Churn by 25%

1. Interview 10 customers that canceled our service and ask them why.

2. Categorize the different reasons expressed by each person.

3. Rank them by cost to fix and potential impact on churn rate.

4. Create a project plan to fix each issue in rank order.

Workflow Example - Publish a newsletter every week

1. Set aside time to come up with content ideas

2. Pick a topic and organize your research and thoughts.

3. Draft and Revise content.

4. Schedule content in newsletter software.

Building a company of any size will have projects and workflows. That, of course, is what makes it a system.

Get The Details Right

Have you ever tried to delegate something to a freelancer, intern, or employee and it turns out utterly disappointing? Generally speaking, if the person you gave it to wants to do a good job, it’s probably not their fault. Most work is easy. Or at least you wouldn’t delegate something to someone you didn’t think had the necessary skills to get the job done. The problem is with the assignment, not the person.

You can’t organize yourself if you don’t know where things go. For example, if you wanted to organize your closet, pretty soon you would have some shirt or hat in your hand and have to ask yourself, “where should I put this?” Obviously, the floor is not an ideal place. That’s why you are making changes in the first place.

McDonald changed the game when in their Standard Operating Procedure they had each employee taking orders ask, “Would you like fries with that?” That single line in their operating procedure accounted for billions in revenue.

They have a script. They have a script because they want the same outcome every time. And you need to have the same outcome every time, especially with workflows that happen over and over again.

Does that place keep all that information together so it can be analyzed to determine what improvements to make on the business to reduce the customer support request?

If you want to get the same result from a process every time, you can’t leave the details to the person taking part in the process, including you. Because each person will do them differently. You will do them differently depending on what mood you are in at the time. And if everything is done differently every time - in other words, it’s not organized - then you have no way to know what’s going on or what’s important to work on.

Google Calendar Take The Wheel

Your calendar is like a bank account. Except, it doesn’t tell you how much money you have, it tells you how much time and effort you have. The trick is, you don’t decide how much of it is spent and when - a second is always spent every second. But you do get to decide what to spend it on.

After finishing the last two steps, you should know what work to do and how to do it. This is about figuring out the when. It means actually opening up a calendar and picking times to get all the work done.

Actually putting stuff in your calendar puts everything into perspective. You’ll realize really quickly that you have to make hard decisions about what is a priority.

Where before you could blindly see something on the top of your to-do list and get that thing done. Putting things in a calendar forces you to look at all the work to do and put important things closer to today and unimportant things further out. You’ll confront how much time you actually have.

For your workflows, you’ll decide how often each of these pieces has to recur. Do you need to check how much you spent each week? or each month? Do you need to check your email every hour? or twice a day? Then you actually make that recurring event in your calendar and stick to it.

With the space left after necessary workflows are put in place, you can begin placing chunks of project-related tasks. If you are doing it right, you’ll find that you can actually only afford 2-3 tasks a day in most cases. Depending on the difficulty and time consumption of each one.

Twitter tweet

Putting everything on the calendar becomes a puzzle. It’s a puzzle you’ve always been playing, but may not have been paying attention to in the past. The key to doing this right is to make sure the stuff that actually moves the needle and gets you closer to your goal is getting priority over everything else.

Conclusion

Getting organized to this degree can feel like extra work that takes away from getting actual tasks done, and it is. But the long-term benefits are just too worthwhile to pass up. Once you have this level of organization you’ll:

• Know exactly what work is creating what result and how much it “costs” to do that work.

• Be able to adjust and optimize workflows to maximize the results of each process.

• Dramatically reduce the cost and headache of delegating projects and workflows to other people when necessary.

• More accurately predict the trajectory of your business because you know what steps will be taken and when

• Eliminate unnecessary workflows.

• Automate workflows with precision.

All in all, this is an investment in future savings. And as a general rule, investments in future savings are some of the safest ones to make.