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by • February 15, 2012 • UncategorizedComments (4)219

Give it away

The quickest way to validate your value proposition is to give it away.

If they aren’t lining up to take it for free then they aren’t going to buy it.

If you want to open a consultancy, try having open office hours. If nobody knows you exist, you’ve got a visibility issue. If people hear about it but nobody shows up, then your value proposition is wrong. If they show up and never talk to you again, then you aren’t actually delivering the value you think you are. If you’re booked out for 3 weeks in a row and visitors start asking how they can get more time with you, then congratulations: you’ve got a consultancy[1][2].

This idea comes directly from Derek’s book Anything You Want. I love it.

One important point: this tests only the value proposition and nothing else. Not the features, not the channel, and not the revenue model.

That’s okay though. As Brant said at Leancamp Barcelona this weekend, the problem is usually that customers don’t give a shit about what you’re doing. That comes down to value proposition.

You’ll enjoy a lot of freedom once you truly, deeply, sincerely believe that you are testing your value proposition and not your product features[3].

Features are expensive to test because you need to build product to do so. Value proposition is simple to test because value tends to cross mediums — tutoring someone in person lets you validate big chunks of the value proposition of your huge e-learning platform before you ever write a line of code. Plus, you’ll learn a lot, can start today for no money, and get to help people actually do the thing you care about helping them do. It’s a win-win-win.

 

[1] The consulting story above is more or less how I got started paying the bills after my previous company tanked. I thought I had value to offer to startups but wasn’t entirely sure what it looked like or who wanted it. Free office hours resolved all my concerns and clarified the opportunity practically overnight. I also really enjoyed them and continue to spend my Monday afternoons in the pub chatting about the businesses of whoever shows up. Grab a spot and drop on by.

[2] As another example, I talked to a team (in Bulgaria, of all places) considering paying big money to get some certification which would allow them to charge for workshops. They reasoned that it would open up a whole new revenue stream selling their byproduct of team expertise. I said it was a big investment, but if people loved their workshops then it probably made sense for them to turn on the revenue — after all, there was hardly any risk. But they’d never even done a free workshop! That’s craziness, and I told them not to pay for the certification under any circumstances until they’d successfully given the workshop for free. It was so little effort and reduced their risk by so much that, in my opinion, they really had no choice.

[3] Yes, you need to build product and test features eventually. No, that isn’t the first step. The first step is finding out whether or not customers care at all.

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4 Responses to Give it away

  1. Actually, I think this is a pretty risky move, and won’t always tell you what you want to know. As I’ve pointed out (in my talk at your event! :-P) price is a selector… if you set your price to zero, you’ll get a different set of customers than if you set your price at £10k. This can be very dangerous, because you’ll think your product has value, when in fact it has value only for non-paying customers.

    As an obvious counter-example, take SAP. It’s expensive, and about 3/4 of the cost is consultants who help you to implement it. It sells only to large corporations that have the kinds of problems that SAP solves. If SAP offered their products for free, no one would buy them, because those who need SAP wouldn’t trust “free”, and need the consulting time to implement it anyway, and they wouldn’t trust free consultants either.

  2. [...] is a follow-up to Give it away in response to the question: “How do you validate interest before the product is [...]

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