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Demand Matrix

This is something we call the demand matrix. And I'm gonna walk through this with you because it's very good in helping you decide which of those ideas is actually profitable. Here on the top left, we have high end high price, fewer customers. So this is who's got an example of a company. Use the mic where you could do high end high price. Few customers Go ahead consulting like what kind of consultant? I don't like one on one. Consulting on money administration hardware West home. Good. Uh, okay, that's let's go. Even higher end than that. What's the high end handbag company? Louis Vuitton? Beautiful. So this is a very high price. Few customers. West Elmo Restoration Hardware. I would consider that a little different because a lot of people shopped there like a lot. Louis Vuitton is Certainly We could all agree. Is high end right? Rolls Royce, etcetera? Golden goose here in the top. Right high price. Many customers who's got an example here. Good apple. Perfect example. High price. Lot...

s of customers. It's called Golden Goose for a reason. Mass market. Low price. Many customers has got an example. Go ahead. Amazon. Okay. Amazon What else? What do you got? Where you guys eat for fast food around here? Curry up now. Okay, Eyes it. It isn't an amazing that in San Francisco. No one says McDonald's hell is wrong with you guys. I mean, literally the definition of mass market McDonald's. Okay, so there's a lot of there's a lot of mass market companies, and finally, labor of love, Low price, few customers. What would be an example of this? Go ahead. Most of the ideas that we come up. Thank you very much. Thank you. That is perfect. Exactly. So let's dig into that for just a second. So I talked about these coaches, right? Who, like they come up with these ideas and they're like, Yeah, I'm gonna help all these people, But what they did was they focused on what they want. They said I want to start an online business because I want to have passive income. I want to work from the beach. I wanna sell while I sleep. They never stop to think about their market. We call that the II syndrome, and that's what most people start off doing. If anyone has ever talked to a 14 year old girl. You know that? They love to say the word. I I want this. I want that. And that's, ironically, what most entrepreneurs due to I want this. I want that not what does my market look like? I'm gonna tell you about a labor of love product that we created. That was a huge failure. We several years ago I had to get my own health insurance, and it was actually really hard. I I thought I'm uneducated. Guy could figure this out. You know, I'm like sitting there researching stuff. I don't even know what copay means, and I'm looking through all the stuff and it was very difficult talking about six months to figure out. And I said, If I'm having trouble like this, other people are definitely having trouble. So we decided to create a course around this. The I will teach you to be rich guide to health insurance and we're like, this is gonna be huge. And we actually we spent months. We built the product, the product exists. We actually tested it with paying beta users. They paid to test, and, uh, we discovered that nobody really cares. They had told us they cared. They're like, yeah, health insurance. I hate my health insurance. But when it came to actually using the material and changing their health insurance, it just wasn't that big of a pain point for them. They didn't really care. Similarly, we created a course called Screwed Strategy. This was when the economy was tanking. Nobody wanted to learn about starting a business or investing. They just wanted to save money. So I created a course. I was like, Yeah, this is gonna be great. It was like eight bucks a month, very inexpensive. Great tips. And each month I guaranteed you that you would save way more than the price of the course. Does anyone know why it didn't succeed? Because people had to pay for it? Um, yes, people had to pay for it, but some my other courses, I charge a lot more. And so people have to pay for those Why didn't screwed strategy work? I mean, you're trying to get people to save money and you're charging them like I want to be a Scrooge. I just won't pay you. First of all, the name was horrible, but that's not all. I mean, look, there's a lot of names that make no sense, but they do really well. The fact is, in this market, people who want to save money don't want to pay to do it, even though logically I'm like you're saving thousands. Of course, it makes logical sense but doesn't make logical sense to give people a workout routine and say here, if you do this, you'll be successful. Course it's logical and then nobody does it. So we got to go deeper. And so Labor of love is where most of your ideas will start off. Um, friend over here, who has the nonprofit idea? Do nonprofits have the ability to pay at one end of the market? Yeah, but most of them know OK, so most of them know we're using something right now. We call the pay certainty technique, and it allows us to quickly diagnose if the market has the ability to pay or not. So we asked two questions. Do they have the ability to pay and the willingness to pay today of the ability? Maybe, Maybe not? Probably not. Willingness. Willingness is usually harder than ability for most of them. OK, so your answer is no. Like candidly. Nonprofits are a really hard market to go after because they don't have the ability to pay. Most men don't have any money. And even if they do what they say, you can you give me a discount? We're a nonprofit, right? Pro bono. And this is what happens when you start targeting people who don't have the ability or willingness to pay. For example, um, if I were creating, if I were doing a fashion site like I was gonna show men had a dress better. Okay, so that's like a nice e book. Maybe I charged 50 bucks. Maybe maybe 100 bucks a month. Whatever. And who is my target market? Is it college students? Did they have the ability or willingness to pay? No, they don't care. They're wearing hoodies. Not to offend any San Francisco people in the room. Uh, is it year old retirees? Do they have the ability to pay? I think so. They have a lot of money. Do they have the a willingness to pay? No. Why not? It doesn't seem to be something that you may be interested in. Yeah, just be very honest with. They're not interested. They're 65 years old. They're not buying the latest fashions for the most part. Oh, my God. Ra meat. Are you stereotyping older men to say that they're unfashionable? Kind of. But I'm also saying, Let's be realistic. Most 65 year old guys are not going to pay for a guide on how to look super cool and stylish, just not something that they care about at that stage of life. 35 year old senior execs, ability to pay willingness to pay. Okay, now it's okay to stereotype at this stage because you're gonna go out and test it. Okay, so that's OK. We're totally cool with stereotyping, gender age, all that stuff for here. We want to be very careful of steering clear of labor of love where you can't charge a lot. And there's very few customers you want to think about. Where do you want to go here, Okay. And just to show you don't have to choose one is not better than the other. In fact, we've done all of this is one of our courses. Six figure consulting system. It's many thousands of dollars. It's very high end. It's invite Onley, right? It's it's exclusive. Golden Goose. Find your dream job. This is one of our courses. It's again several $1000 high end. But it has a pretty broad appeal because a lot of people want to find a job here. I will teach you Be rich. My book is about 10 bucks. Find it in any bookstore and it really appeals to people cause everyone has questions about their personal finances. Shoot, I'm saying, but it took me many years to get here. So why did we just go through this demand matrix? You have these 20 ideas. You want to use your best judgment to plot them in somewhere here, Most of them will end up in the labor of love. Okay, That's okay. That's fine. It actually is a good thing. It's like eliminate those slash and burn. But some of these might end up in the very high end thing. By the way, if you were doing fitness, you could have them up. You can have them appear in all of them. You could create a fitness e book for 20 bucks, you could create ah, high end products, a $497.1000 whatever or even a subscription product. And then you could do one on one coaching or a really high end product like competition prep. That would be like thousands of dollars. Makes sense. Okay, well of a business from the chat room, and it might be fun to categorize it here. You have to help them out a little bit. Now. This this example comes from time capsule in the chat room, and here is their business. They're creating decorative baby and wedding time capsules that you preserve your photos and memorabilia in for 10 to 20 years. Then you reopen it years later and relive what life was like the year you were born or you were married. Now these are meant to be displayed, but they are an artistic luxury gift. Who's got an opinion on this? My, I think it's either a labor of love or high end, like perhaps of you position it right. It could be high end, but otherwise it's just gonna be terrible. Very good. I think. I think you're right on, and by the way, it's not rude to analyze. These things were not emotionally connected to the ideas. At this stage, we're just being ruthless, like we're being scientists. Okay, where do we think it fits? And I appreciate your candor because it would be easy to say, Oh, that sounds like a great idea. That's what everyone says to you. They're all lying. They're lying to you. They're lying to themselves. They don't want to say that sexually, like really stupid. They'll say stuff like, Oh, yeah, like I could see myself buying that. And then the next question you ask is, Oh, great. Well, I'm actually selling the 1st 20 seats just for $50. So would you like to get the first lot? Well, I have to Ah, look at my they don't care. They don't want your idea. So here's what I think. I agree 100% with you. It's either high end or labor of love because there's relatively few customers for that. So what we want to do is quickly find out. If we're not sure. I bet you this person has 10 friends who were having babies, right? Go and say, Hey, what do you think about this? Already? Can tell you they're going to go, so it's great okay, and see if they can pay. It doesn't even matter if they charge $50 or $500. At this point. Any money, anything is a sign of value. But my guess is that most parents will say like, I'll have to think about that. Anything short of a Here you go. I need this right now. Is it? No. Let me say that I get anything short of a Here you go. I need this right now is a no common excuses people will say is I have to think about it. Sure. Send me some more information. Uh oh. That sounds that's that's not quite right for me. But you should talk to this person. Or I could see how that would be helpful for blah blah market. That happens to not be me. All of those are code for no. Be honest with yourself. Business is all about being honest. Okay, Just a quick follow up from that. She said that she already has an online store, but the biggest business challenge had been driving traffic to the website and increasing sales right now. So that ties in exactly? Totally. All right. So again, where are we in this process? We're going to start getting a little bit more tactical, but we're doing that 80% of the work right now. Most people by now they would have come up with the idea, spent a ton of time and money putting it on a website, and then they're waiting for traffic. Where's the traffic? You didn't do any work. You did what you wanted to do. You didn't do what your market wanted to do. So we're spending the time up front doing a little bit of homework before we go out to the market just to give you an example from our business. Um, before we launch one of our courses, we spend months, in some cases, two years doing our research, building it, testing it. By the time we launch, we can often predict within point five point 0.2% what the conversion rate is gonna be Now. That was a long time to get to not saying you have to be able to do that now, but you want to be able to virtually guarantee you have customers. In other words, you want to know that you've got at least 10 people who are gonna pay you, who have already pre committed before you go live with a product. Otherwise, what are you doing? Business is not about hope. It's about structure and systems. It's about almost guaranteeing you're going to succeed. I like to stack the odds in my favor. So now we've got a few ideas and we say, You know, I think I like the idea of going mass market just to start with. Maybe I'm gonna create a low end product, 10 box, 50 bucks, something like that. I like that because we don't yet have the skills to create, like, a multi $1000 course. So let's start and get our feet wet. Okay, So what do we do now? Now we want to really understand what people have to say. Remember that word we used a few minutes ago? Sellout. That word alone could be the difference between having a successful course, and not so. Let me talk about how we do this. We like to get at least 20 people. I recommend you. You don't even think about what you're format of. Your product is price or anything till you talk to at least 20 people you want to ask them What are their hopes? Fears and dreams. We'll talk about the exact way to ask them this. What are there obstacles? What's holding them back So earlier? I asked you why haven't you started a business already? And you know I'm filing that away mentally. Um, this is a very important what have you already tried? If let's say that we're doing a fitness product and you start talking to people, they're like, yeah, I really want to lose weight. Like I'm just not happy with the way I look and feel, and you ask them. OK, cool. What have you tried so far? And they say, Well, I haven't really tried anything, but I like I really want to do it. What is your conclusion to that? It's past the mike back there. If they say I haven't tried anything yet, but I really want to do what's your conclusion? Maybe they're not in the target market or they need motivation. They're not serious. You're not gonna motivate someone. Stop using the word motivation. You're not gonna motivate someone who hasn't ever taken any action. The biggest thing you can do is find people who have already tried something showing that they have taken action. But for some reason it hasn't worked. OK, now there are other ways around it. Of course, you can create a market. You can get new people who haven't tried anything before. But the easiest way is to find people who have already tried it because they've already demonstrated. I'm willing to do this. So examples of that would be they bought a book on nutrition or fitness. They have a gym membership. That's a huge sign they've bought. They've got a trainer. Even one year ago, they got one session with a trainer. Huge. That is a great market versus I really should lose weight. I don't like how I feel after Thanksgiving. All right, come back when you're ready. Okay. We talked about stereotyping people, but then testing it. Um, let's say you're trying to help people start a business. Are you helping men or women? It's very different if you're doing fitness or food. Obviously, the words they use are totally different. Style is obvious. They're very different. A lot of people get uncomfortable with this remains. Are you saying that like, are you saying that women are only doing fitness because of this and that. And are you saying that men only want to get fit because they want that? Yeah, I am. At least at first. And then I'm gonna go test it and find out what people really want. Just to give you a sense, Let's pick to target markets. Let's say up. Let's say we're doing fitness again. It's easy. One 28 year old male versus a 20 year old man versus ah um, 39 year old mother of two. What's the difference in the way they describe their fitness goals? What is the young guy say? Let's ask some young guys in the room. Go ahead. Um, so the young guy will say, I want to get ripped, you know? Wanna see my abs or, you know, want to look good on the beach? Why? I agreed all those things. Why, uh so they can attract women. Good. Oh, my God. I'm so offended. I can't believe you just said that. But you're also right. And what about the 30 when I say 38 year old mother of two, they want their body back. Oh, you could tell these guys in the Finnish world they want their body back. That's very subtle. What does that mean? Body back all on women when they give birth. Uh, you know, their body goes through all these changes and, you know, to three years in, they still haven't gotten back to where they were before they gave birth. I have heard my clients say this. I just want my body back. Great, great phrase. And that is the difference between two different products you would create and two different marketing campaigns. If you were to say to women, I could help you get ripped. I mean, would any woman in here want that? Now there are certain a certain subset of women who do want to get ripped. Okay. And that's fine. Unless you're focused on that specific niche, which would be at the high end. Probably most women are probably not looking for the word ripped. What words are they looking for? Let's pass the mic to some women. Go ahead, town tone. Good. What else? Energy. To have our energy so good. That's a classically feminine word. Energy. Very good. Let's get one more lose weight, lose weight. Very good. Lean toned. These are all words that are classically feminine when it comes to the fitness industry. Similarly, when it comes to starting a business for someone in their twenties versus someone in their forties, those are gonna be different words as well. Forties is gonna be work, life, balance. I don't want to be pulled in all directions. I put my time in at a job, but now I'm looking for something mawr fulfilling. These are really words that people really use. This is getting into the nitty gritty. This is the immersion strategy. You're immersing yourself in your market. Do you know how many entrepreneurs Judas? Almost none. What do they do? They go, They come up with the I I I wanna live on the beach. I want passive income, you know? And then they come up with some shitty e book, and then they put it out there and wonder why doesn't anyone come? They never took the time to do it right. This is how we go deep. So now we've taken our ideas. We've run them through several frameworks. Okay, We're starting to see All right. This idea has mass market appeal, but I don't really like thes people. Like I don't want that audience. Okay, this one I like, But there's a problem cause nobody's gonna pay anything for it. I discovered, like I talked to 20 of them. They don't have any money, or they just they're not willing to invest in themselves. Okay, But I found one. I think this is right. And how do you know what's right? Because as you're talking to them after you talk to 15 20 people, you can literally predict the next words they're going to use. In fact, you say, let me see if I'm reading you. Write you blank, blank, blank, blank, blank. And they go, you're on the right track. Now we're gonna go a little bit deeper, and then I'm gonna talk to you about the website, the email list and all that stuff