Welcome to another edition of the Product in Public newsletter, where I give you an inside look at how I build products for myself and the companies I support.
In today’s article:
- What I’m building
- SBA Loan Analyzer + Business Plan Builder = <new product>
- Tools I’m using to build products
- What I’m helping others build
- Lessons from Virtual Pitch Day
- Establishing a valuation: pre-revenue vs. revenue-producing
Bundling versus unbundling products
One of the best ways to come up with product ideas is to solve your own pain points.
I’ve wrote hundreds of business plans in my professional life. At my company, the former CEO liked my business plans so much that for a period of time I was the go-to for preparing a plan for any major initiative. I also write business plans for clients, mostly on Upwork.
So, this week I went heads down on my latest product, Business Plan Builder.
It’s designed to create an business plan with minimal input from the user.
My thoughts have been to bundle it with another product of mine, SBA Loan Analyzer, in a larger “one-stop shop” for all things SBA loan resources. I even have the website already built in Framer. But, I haven’t deployed that yet. That’s because I’m considering leaving the products unbundled. I’ve even considered bundling, which would include my Go-to-Market Analyzer product that is almost finished, all of my products in one bundle.
Here are a few thing to consider whether you should bundle products or not.
The case for bundling:
- Gives users a sense of greater value.
- Simplifies the user experience.
- Helps new products see adoption when bundled with popular products.
- Reduces Marketing costs. This is a BIG reason to bundle.
The case for unbundling:
- When products don’t complement each other.
- Improves pricing strategies.
- Allows for better personalization.
Based on the above and some beta user input, I’ve decided to bundle the SBA Loan Analyzer and Business Plan Builder into one product called the…SBA Loan Toolkit.
The site isn’t live just yet, but when it is I’ll make an announcement.
Tools I’m using to build products
In my first live build session, I worked through the PRD (Product Requirements Document) for the Business Plan Builder.
PRDs are a common artifact in Product Management that are used to explain to engineers what you want a product to do.
In the video you will see me creating one in a Google Doc.
But, I’m starting to shift to a different tool for my PRDs.
I’ve been looking at ChatPRD in my continued quest to be more efficient in my business. Not only I’m I looking at it for my products, but I’m currently exploring purchasing it for use with my team at my day job, where I’m a Senior Director of Product Management for a $12B fintech company.
What I like about ChatPRD is that is does just accept your first set of prompts. It will take those and then prompt you for additional context.
If you are looking for AI tools to improve your business productivity and document creation take a look at ChatPRD. You can create PRDs, marketing documents, and more.
FWIW - I’m not being compensated for sharing it.
Lessons from Virtual Pitch Day
I got to sit in on a full day of pitches, about 14 of them, where startups pitch my company for strategic partnership opportunities and investments.
Pitching in that setting is different than pitching for a startup’s seed round, so I capture a few lessons for you.
- The founder doesn’t have to lead the pitch. The person who presents the best should.
- Bring the energy. When people are sitting through 14 pitches, you need a way to keep their attention. One of the best ways to do that is bring lots of energy to the call. Especially when its virtual.
- Know your business. This is true for seed stage pitches as well. When you are pitching people at an almost fifty-year-old company with lots of resources you can be sure they know their industry. So, you had better as well.
- Have an ask. You’d be shocked to know that very few of the presenters had an actual ask at the end of the presentation. Only one or two specifically asked for a strategic partnership with my company. The rest just said thanks and moved on. Boo.
By the way, strategic partnerships are a very valid place to look for an “investment.” That may not always be in the form of cash. But, partnering with established, larger companies can bring lots of resources with it. Heck, they may even acquire you down the road.
Pre-revenue versus revenue-producing valuations
This could be an entire book in and of itself. Maybe some other time.
In my own business I tend to work with pre-revenue startups. In my day job I work with very large, revenue-producing businesses.
How you value each is different.
For pre-revenue startups valuing a company isn’t always wise early on. That’s because you don’t have a lot to go on.
I have multiple customers I am helping fundraise right now. Out of the three active files, only one is ready for a true valuation. Why? Because its generating $60k/month in gross revenue. The others are at the ideation stage.
For the revenue-producing venture the valuation is based on a multiple of revenue. That multiple varies per industry. In this instance, we are estimating a 3x multiple because the revenue has been in decline.
For my pre-revenue clients, we aren’t bothering to value the company. Instead, if they land investors, we will be using a convertible note/SaFE instrument. This pushes the valuation to a latter date, which makes sense when their isn’t much to go on.
My Youtube video on SaFEs is one of my most popular. To learn more about how they work, in less than four minutes, head here.
What else is going on?
Tonight the Mrs. and I will wrap up watching Untamed on Netflix. It’s a limited series, six episodes, from the creators of American Primevil. Both are worth the watch.
If you’ve found this information helpful, I hope you’ll do two things for me.
1) Subscribe to this newsletter. That way, new copies are delivered directly to your inbox.
2) Share this newsletter with one other person that you think might benefit from the information I share.