build a business in a weekend - Noah Kagen - Tim Ferriss podcast
link:: Build a £1M business - use these tools and steps
Steps
Step 1: Find an idea with unmet demand
Find the idea
- business ideas
- Ahrefs - search volumes
- Trends apps
Step 2: estimate market size & value
Estimate total accessible market (TAM)
- Use CrunchBase to research the business you want to replicate
- Assess the value of the customer, based on how much they already spend - initial costs, maintenance costs, etc
- Use the
TAM = (Number of available customers) x (Value of each customer)
Process: 5-minute business model:
Is this a $1 million opportunity?
- Is the industry growing, or shrinking? - Google Search Trends
- Identify est. audience size - Google Trends, Ahrefs, Ads Marketplaces
- Cost of product - what can you reasonably sell?
- Can I make $1 million or more?
Can I increase revenue?
- Average order value: Increase the amount someone purchases.
- Frequency: Increase how often someone will buy your service.
- Price point: Increase or decrease your price point to affect total sales.
- Customer type: Approach a more lucrative/wealthier customer segment.
- Product line: Add additional products to make the business more attractive to start.
- Add-on services: If you’re selling a product like cookies, can you offer a service like setting up birthday parties or cooking at the person’s home?
- Bundling: Can I package several products, or create a directory (like Microsoft 365 suite) to sell at a higher price point?
TAM Calculation methods:
- Top-Down:
- Uses industry data and reports to estimate the TAM. It's a quicker method but can be less accurate as it relies on broad market data.
- Apply industry averages and market research data to the broader market size. This might involve taking a percentage of a known larger market based on the segment your product or service targets.
- Bottom-Up:
- Uses actual data from initial sales or a detailed analysis of potential sales volumes and prices. It's more accurate but requires more detailed data.
- Multiply the number of potential customers by the average revenue per user (ARPU). This method gives a more direct estimate based on actual sales data or realistic sales projections.
- Value-Theory:
- Estimates TAM based on the value or outcome the product or service provides to customers. This method is useful for innovative products without existing market data.
- Estimate the economic or value impact of your solution on the market and what portion of this value your business can capture.
Step 3: experiment with marketing to customers
Experiment
- speak to mentors (like PJ)
- TEST all assumptions
- Ask people to convert (sign up -> buy)
- Try doing things that don't scale
What does success look like?
-
Set a target sales benchmark based on your
- £cost/time number i.e. £100/hour = X sales/hour
-
Stress Test sales strategy (Ramit)
-
Create a one page Sales Page (landing page) - Use wordpress or Unbounce.
-
Use tools
-
Exclude/ say no more than you say yes - you must be exceptional to succeed at this
Resources:
$5M Week business How to find your rabid fans
Hack a Kickstarter
Gather a mass email list
Travel and Work