My framework for quickly launching profitable products
I leverage the point of diminishing returns concept to help my quickly launch profitable products. Here's the framework I leverage.
One of the principles I try to live by is the concept of diminishing returns.
The concept has its origin in financial returns. The idea is that the returns of an investment shrink proportionally to the amount of money and energy poured into the investment.
There is a similar principle in the tech startup space, where the idea is to deploy code early and often. That way, your end user can experience the code and provide you feedback on how to improve the experience.
In product management, we call this a feedback loop, and we use minimally viable products (MVPs) to quickly get into that loop of user input.
I often see founders struggling with when to launch a new product or service. They wait too long, desperately trying to get every aspect perfect. Today I’m going to give you a framework you can use to push past these challenges.
Here are some places this behavior shows itself.
- The name of the business - don’t get me wrong. There is power in a properly crafted business name. When I first came up with the idea that would eventually become GoGrabLunch, I was torn about what to call it because all of the names I had dreamed up seemed to be taken. I never really loved the name. Still, we grew to members in 45 countries regardless of my feelings for what we called the product.
- The website URL - it used to be that a .com URL was the only way to go. Proponents preached that anything else meant your business wouldn’t be easy to find. Those days are mostly gone. A .com URL is still the most common, but plenty of businesses use .co, .io, and others. Something else that has changed is getting a URL that exactly matches your business. Again, it's preferable if you do so that people can more easily find you online. However, there are examples of good companies where that isn’t the case. Such as onepeloton.com.
- Your website - your business’s website is its virtual front door. So, it is important that you have a well-done website. When I launched SouthFound (my southern startup PR firm), I went through so many iterations of its first web design.
When I launched CommercialLoanBrokerinaBox.com I was able to avoid all of these issues and more. Here is part of the framework I used for launching quickly so that I was generating revenue within minutes.
- Naming the product - the Commercial Loan Broker part was easy since that was my target audience. Then I looked for a term that described what I offering. In this case, I knew of a similar product in the financial advisory space, so I copied their playbook. The “In a Box” part described how everything the consumer needed came in the product.
- The URL - the length of the name made getting the matching website URL easy. Had that not worked I was prepared to add descriptive words to Commercial Loan Broker. If you are ever in this situation, try powerful words such as easy, the, your, and get. For example, easyAI.com or yourpersonalAI.com.
- The website - I built mine in 15 minutes using a drag-and-drop website builder inside GoDaddy. A self-hosted WordPress site would have allowed me more customization. But, again, I wanted to move quickly. The first version of the website was a simple one-page landing page. My go-to template is to follow this order on the home page:
1) One-liner describing the product. In this case, I went with “The Premier Commercial Loan Broker training platform”. Note the use of a power word.
2) Next up I state what the product helps the user do. “Learn how to launch & run your commercial loan brokerage business.”
3) Then, I tell the buyer what will happen if they buy the product. “Start closing deals!”
4 ) Followed up by why my product is different than others.
5) Then testimonials
6) Finally, a link to buy the product
- Pricing the product - I struggled with how to price the product. Other courses cost upwards of $8,000. My course is almost 10% of that cost. But I didn’t let pricing confusion hold me back. I simply launched the product into the marketplace and then monitored its performance. Sales started coming in almost immediately. This told me one of two things - 1) the demand was there; 2) I may have priced the product too low. I priced my product so low, compared to the competition, for two reasons. First, I was focused on volume. Starbucks is an enormous company. They sell $2-$5 coffee. Not high-ticket products. I wanted to follow a similar model. By pricing my product low, I could appeal to my target user persona better. Second, in order to achieve a faster speed-to-market, I didn’t let production quality hold me back. My course videos are mostly me sitting at my desk in my home office. Still, I probably went too low on price. So, I followed a rule that our daughter taught me. I simply increased the price, in small incremental amounts, until the sales volume times the price was keeping revenue above the previous point(s).
- Product delivery and processes - At the MVP stage, I don’t build out complicated product delivery or other processes. I don’t even build out things such as re-targeting ads for folks who visit the product’s landing page and don’t make a purchase. Or detailed follow-up email campaigns for those that do buy the product. For that group, I created a simple Google Doc that detailed the next steps, which they downloaded after making their purchase.
Mistakes were made
One place I did make a mistake was in designing the product offering details. I allowed product creep to set in and was initially offering too many bonus features.
At launch, there were three versions of the course. Each version had unique features that also came with a higher sticker price. I structured the versions in a way similar to many SaaS solutions. There was a free/low-cost version, a middle tier that offered some additional benefits, and the highest tier that offered a lot of extras.
In my experience, the middle tier ends up being the most commonly purchased version when structured in that way. That held true here.
The problem quickly became that I didn’t enjoy fulfilling the extras. Whereas the course was a passive product sale and consumption process, the extras required that I do extra. On top of that, many of the people that paid for the extras wanted even more from me that wasn’t really part of what they had paid for.
So, I quickly fell back to my original MVP feature set. I even refunded the folks that had paid for the higher-priced product version.
To date, this product launch has been my most successful. It’s pushed me up over the $2k MRR (monthly recurring revenue) amount. Whereas before, I was sitting at $600 MRR.
I have no doubt that a large part of that success is that I have finally learned to stop pushing for perfection. I’ve recognized that with MVPs, there is a point of diminishing returns.
Instead, I focus on getting the product into the market, reading what the analytics are telling me, and pivoting as I go.
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