How To GUARANTEE You Have A Million Dollar Business Idea

How To GUARANTEE You Have A Million Dollar Business Idea

Over the last 20 years, I’ve launched 23 companies. Many failed, 4 did alright, and 1 of them is currently making close to $100M/year!

In the process, I wasted a lot of money and time in exchange for some expensive lessons.

In this post, I go over the proven process I use to test the business ideas that save me (and now, you) tens of thousands of dollars, as well as years of working on the wrong business idea.

Let's dive in.

How To GUARANTEE You Have A Million Dollar Business Idea

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A couple of years ago we launched a business called MeetFam.

You've never heard of it.

We spent over a million dollars in cash to build it, plus over a year of people's time trying to make it work—and in the end, we killed it.

No one used it.

My goal with this post is to teach you everything I know about validating million dollar business ideas before you waste thousands of dollars and years of your life building a product that no one wants.

Million Dollar Business Idea Tip #1: MVPs Are Your MVP

What is an MVP?

To Michael Jordan, it means being the Most Valuable Player. But to me, it means Minimum Viable Product.

The idea with an MVP is to build the quickest, cheapest, fastest version of your product to see if customers actually want to buy it. It shouldn’t take a ton of time to build, and it shouldn’t cost a lot of money.

I know a lot of you out there are thinking, “Noah, I’m actually making a high-quality product. My product is unique. My product is special.”

And yes, it probably is.

But also take a step back and realize that you can still build a high-quality product on a smaller scale to get started.

The point here with your MVP is to find out if it fixes a problem in a way that is valuable for people.

A great example of this is the Tesla Model 3. They made a version of the car, but didn’t let people touch it, drive it, or even see it until after they bought it.

And they sold over $1.5 billion dollars of that model!

Their MVP helped them figure out that they were fixing a problem that people wanted to buy into, and once they validated it by making all those sales, they went ahead and made more cars.

The beauty of MVPs is that if no one wants them, that’s a mitzvah (which means “blessing”).

Examples of MVPs

Other examples of big brands like Tesla that started with an MVP are Airbnb, Uber, Eventbrite, and Craigslist. These are all huge, billion dollar companies.

When Airbnb started, it was just in San Francisco, they didn’t have a search bar, they didn’t have a mobile app, and they didn’t even take credit card payments!! You had to give cash to the host.

Uber started out as “UberCab” and when it was launched, it was just supposed to be a way to make friends feel like they were VIPs when they were going to events and clubs. They started with UberCab and UberBlack which didn’t actually go that well, but that led them to start UberX which is when they exploded in growth.

So just by getting started, you'll get momentum and a few customers and it could ultimately lead you to something even greater.

Next up is Eventbrite.

I was actually one of the first customers of Eventbrite. I helped them get going using CommunityNext. I think we were one of the biggest ticket sellers early on.

Their first site was a really simple HTML page with a simple explanation of the concept and that’s something you'll notice with a lot of MVPs. They’re usually super basic.

I know nowadays there are a lot more options and it’s easier to make things like websites and apps — but don’t get sucked into that. Focusing on how things look or how you’re setting up your business online takes precious time and money away from you that could be completely wasted if you haven’t validated your idea yet.

When you’re validating your idea, find the simplest way of solving the actual problem.

For Airbnb, it was sleeping at random people’s houses. For Uber, it was driving around. For Eventbrite it was buying tickets. And for Craigslist…

It actually started out as a newsletter to Craig's friends.

Get it? Craig's list?

It was just an email. He didn't even build a website. (You can start your own email newsletter with one of my products, SendFox.)

By creating that newsletter he figured out what people were excited about and he eventually made it into a website because he couldn't be doing the email manually by himself anymore.

And he's still doing customer support to this day.

MVP Step #1: What Problem Are You Solving?

When you're first making an MVP, the #1 thing you need to figure out is…

What’s the problem that I’m solving?

Usually, people do this last.

They go on their computer, they get really excited, they build something, and after they’re done they realize… Now I need to go find customers.

That’s exhausting.

You need to try what I call the Customer First Philosophy.

What you're doing, in the simplest form, is either:

  • Making yourself the first customer
  • Going out to customers themselves and seeing what problems they’re excited to give you cash money or attention for

So basically, find customers first before you build anything.

MVP Step #2: How to Actually Create Your MVP

How do you actually make an MVP?

Step #1: Offer Your Product As A Service

Most things you can do manually before you automate it or scale it.

Think about this: Have you ever heard the word SaaS? Software as a Service?

Do the service and then build the software.

Step #2: Pre-Sell Your Product

Go to people that you think have a problem you can solve, tell them what you’re going to solve, and ask them if they’ll pay you for it.

Once you have the customers, you just have to go figure out how to deliver it. And that part is trivial.

I know you think it’s probably really hard — but it’s not.

Let me give you some examples.

During the pandemic, I wanted to start a gym business that delivered weights to people. I just went to people that I knew worked out and asked if they wanted weights. I just contacted friends — I didn't post on social media or anything like that. A lot of people said yes, they sent me some money for it, and then I went and found weights.

I called gyms, they said no. I called hotels, they said no. I asked friends who ran gym businesses, and they said no. Finally, by asking around and putting myself out there, someone referred me to a friend of a friend of a friend who had weights.

So really think about pre-selling your product first, because getting customers and their money is the hard part. Delivering on it is easy.

I've also done this with Sumo Jerky, where I called up friends and asked if they wanted beef jerky. I did it with an events business called WhiskeyTastings where I sold tickets for whiskey tastings events, then I went and found a venue that could do the tastings. I even did this with caffeine gum a few years ago. I sold caffeine gum, then I went and got someone to make it, and I was able to deliver on it.

I even did this when I started AppSumo in a weekend by selling Imgur codes, and now it’s a multi-million dollar business!

Step #3: What to Do If Your MVP Doesn’t Work

Hypothetically speaking, what if I made these MVPs and no one bought them?

That's amazing. Remember—a mitzvah!

I just saved myself a bunch of time and money on something that people don’t want. And now, I can ask them what they DO want.

MVP Step #3: Make It a Problem

When people start thinking about their MVP and what they’re going to create, they jump to thinking about how it’s not going to scale.

Like bro, you don’t even have any customers yet.

Why don't you make it a problem?

Make it a problem first, BEFORE you start fixing it.

You don’t have any customers. Make that your problem. Have too many customers? Then you can deal with that. But make it your problem, first.

MVP Step #4: After You Validate It, Make It Pretty

If you look at Apple products — the very first ones, like the iPod and iPhone — they weren’t very pretty. They were pretty bulky and chunky (and the first iPhone actually didn’t work properly when they launched it).

But after they knew people wanted these products, they improved the look and feel of them.

I think a lot of people confuse that when they think about MVPs. They think their product always has to be simple and scrappy, but that’s not true. After you validate your product and people are buying it, then you can put more time and money into making it pretty and adding more features.

MVP Step #5: Start a Company That’s Easy For You To Start

A lot of the time I hear people say that they can’t start a company without a developer.

Right?

Wrong.

What you can do is start a company that’s easy for you to start.

I’ll say that again: Start a company that’s easy for you to start.

If you want to open a bakery, you don't need a storefront. You can sell things out of your house to your friends.

The founder of Nike (yeah, that Nike) sold shoes out of the back of his car to get going. And now they're a billion dollar company.

The benefit of not knowing how to code is that you can actually be scrappy and really focus on the hard (but most important) part which is, can I actually find customers that want to pay me money?

A lot of people think that having money is an advantage, but having money can actually be a disadvantage in this case. Use the fact that you don't have any developers and you don't have any money to be really creative and focus on proving your million dollar business idea by actually getting customers.

If you really can’t help yourself and you still think you need to code or your MVP is going to be an app or something, then I recommend checking out the no-code options we have on AppSumo. They’ll help you get started faster so you don’t spend too much time building while you’re still validating.

Key Takeaways

The key to making sure you have a million dollar business idea is validating your product by getting customers to pay you for an MVP. Get creative and be scrappy, and build your MVP as quickly and cheaply as you can, so if no one wants it, you didn’t waste too much time and effort.

If no one wants it, that’s great! Find out what they will pay you for.

And if they do want it, well then maybe you’ve figured out your million dollar business idea.

Good luck out there.


 

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One response to “How To GUARANTEE You Have A Million Dollar Business Idea”

Tyi
June 6, 2022 at 5:06 pm

Why didn't you use a MVP for MeetFam? MVP is widely known for years and you surely knew about it few years ago.

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