For Starters #50: The First Sale is to Yourself
Because you’re worth it.
On a scale of 1-10, how confident are you in your ability to substantially help customers right now?
A quick clarification.
I’m not asking ‘how confident are you that your product - in its current state - can significantly help?’ Nor am I asking ‘how confident are you that your product someday - in its fully mature form - can significantly help?
I’m asking about you, yourself - and if you have one - your team.
If your answer isn’t an 8 or a 9, change the problem you’re targeting or change the customer segment you’re targeting.
As a founder, as an entrepreneur, the self-confidence in helping your customers uniquely and substantially needs to be off the charts. Not widely across every aspect of your life - as you don’t have the energy for that - tightly focused, like a laser in this specific domain.
You don’t even need to necessarily execute brilliantly to provide substantial help. It could just be your fresh perspective, your longer term vision automate and productize, or something else all together. Your help can be delivered in ways other than the subscription software product you were envisioning. Your help can be delivered via phone call, in person meeting, via email with attached PDF, via whiteboard sketch. In all cases, your help is worth something. For-profit organizations pay actual money for far more questionable things….leases on office space for example.
If you have confidence in your ability to substantially help your customers today - you don’t need proof-of-concepts, design partnerships, beta tests, free trials or any of the other things that diminish your value, diminish your near-term revenues, and too often end up as inconclusive fishing expedition.
You provide the help, determine which parts are the same, and bake them into your product that automates and accelerates the help.
“But how can I help if I don’t have a feature complete product?”
The world is constantly changing. Your customers change. Technology changes, Your product will never be feature complete. There will always be more to do. Prioritizing what to work on is pulled out of you by your customers. Thus, an incomplete product is not an excuse as the customers that need your help the most won’t be picky about how perfect your product is.
Sometimes, the primary help needed is simply being the person focused on solving the problem.
It may sound like I’m advocating for you to be a professional services or consulting firm. I am.
Your customers don’t actually care if this persistently frustrating problem is solved by a magic incandation, an infinite number of monkeys or literal duct tape and baling twine. They just know, what they’ve tried to this point isn’t cutting it and it’s time to try something new.
You’re what’s new.
So what should you charge for this engagement?
Something meaningful. Something credible. Somewhere between double what you’re thinking and 75% of what their next best alternative is.
In the B2B - the floor is $10,000, which according to my rule of thumb is $1-$2M of total business value. Anything less than a million dollar problem is probably not even worth your customer bothering with anyway.
The price points on the consumer side are different, think $360/yr, $600/yr, $1000/yr. This means you need a minimum of 15x the customers on the consumer side vs the equivalent B2B offering for the same revenue.
As you look at these numbers, you’re right to doubt if you’ve picked a significant enough problem. If you’ve designed a valuable enough solution. You’re right to wonder if how your product can ever be that valuable. That big.
It very likely can.
But first, you need to believe inside yourself that it can be and that someone would pay you at those levels. For what you have today.
Everything else follows.
Something’s to remember:
It’s your client’s job to be expert in their business, it’s your job to be expert in the problem they hired you to improve. There’s a difference.
Being just 2-3 steps ahead of your client is sufficient to provide substantial help.
Clients don’t really care how or how hard it was for you to deliver their improvement. They don’t even care if the engagement was profitable for you. All of that’s your responsibility. Know your numbers, know your value, and most importantly know why you’re helping them.