Choose the Right Product & Market

You want help? Hi, David. Hey, how’s it going? Good, how are you? Very good. So I hope you see everybody. I don’t know if you see behind me, you’re on the screen. Yes, I see, I see.

So everybody, this is David Bitton. He is a wealth of knowledge on all sorts of entrepreneurial endeavors, so please be kind to him and take notes. He’s sure to help you all very much, especially in the beginning of this program. Everybody, give him a warm welcome. All right, David, do you want to go ahead? Let me ask you, can you allow me to share my screen? Oh yes, of course. There we go. And let me ask everyone, can you hear me fine? Should I talk louder? Is it okay? Okay, I’m hoping you guys can hear me, otherwise you would say something. All right, cool. Okay, so I’ll kick it off. So thanks

for having me. My name is David Bitton. I will get into a quick background about myself and then we’ll talk about the main topic of marketing and audience. And if you have any questions at all, please feel free to stop me. I probably won’t be looking at you, so maybe just unmute and say, “Hello, I have a question,” and I’m happy to stop. So, quick background about myself. I’m an entrepreneur, started five companies, sold two of them, speaker, author, investor, father, blah blah blah. I founded five companies in my past, starting with a computer repair company, then a music and entertainment business, software for lawyers, and now today a property management software. So I learned a lot over the last 10-plus years and I’m happy to share some wisdom with you guys today. So just a summary of what we’re going to cover today. We’re going to talk about the product. Is there a need for it? Why are you starting a business and selling a product or a service? Is there a market for it?

How big is the market? The audience, we’re talking about customers, getting feedback, and then finally we’ll end off with the adoption life cycle. And this is probably one of my favorite quotes, on the left. Failing to plan is planning to fail. Always have a plan. Whatever you’re going to do, write it out. Have a business plan, have a checklist, and just go through that plan. That’s what I do every single morning. I actually have my own checklist. So I don’t know if I can see all of you guys, let me try to see as many as I can. So just a show of hands, those that I can see on here, how many of you already have your business idea? No one? Okay, I saw one hand. Priscilla, okay. Caitlyn, thank you. So a few people have their idea, it seems like, and a few people don’t, which is perfectly fine. So as I’m going through this, I’ll be talking about my experience with my company, but just think of the company that you’re going to want to start and how it relates to this. So the first thing we’ll talk about is the product. Whenever you’re starting a company, you’re usually either starting it to solve a problem, or you have a passion or

hobby. These are the two things that I find make for the most successful business. Now, all of my companies were a little bit different. One company was a problem that I was solving and a passion, so solving a problem for people and for myself, fixing computers for people at home, and also I’m passionate about it. I love computers. My next company was entertainment, music. That’s what I love, so also passion. My next two companies were problems I was solving, problems for the industry. So ideally, you want to solve a problem for yourself or be very passionate about what you’re doing. You have to love what you do, which I’m going to keep reiterating to you. Love what you do, it’s so, so important. And if you could solve a problem and be passionate, that’s just a total win-win. Okay, now why start a business that solves your own problems? Because you are your own customer. Now what I mean by that is, for example, in my entertainment business we had to keep track of leads and

clients and events, and I had no good system, and there was no good system out there. So I was solving my own problem by building my own software that I was going to use for myself in my own company every single day. So every day I knew what I wanted from the software. I was the customer. I knew the market, I knew the industry, I knew what problems we have. And the most important part is that you’re going to use your own product every day and consistently make it better. It’s really important. If you are the consumer and you are using your own product, it will help you a lot. Now, what problem are you solving? Are you solving a time problem, not enough time, getting things done faster? A money problem? Maybe they’re losing money, they could be making more money. Maybe just organization, like a CRM. Efficiency, doing things better. Or maybe there’s a better mousetrap, a better way to do things. This obviously isn’t all of the problems you could be solving, but this is generally what it falls into. And try to quantify the problem into

benefits and numerical, quantitative data. So for example, when you’re solving a problem, don’t just say, “Oh, we’ll help you save time and money.” It’s so generic, it’s so cliché, right? You’ve seen it everywhere, on every website. Try to quantify it. You will save 8.2 hours a week. You will save around $400 a month. You will save 9% on your electricity bill. These are actual real-life examples that I’ve taken online from companies that I really like. Okay, so try to quantify it. Ask your customers, do a survey on how much they’re saving, quantify it, and then put it on your website so people can actually justify the purchase. For example, the 9%. I purchased something to save me electricity at my home, and let’s say it was $400. Wow, it’s really expensive. But if I could save 10% of my electricity bill, it will pay itself off in 10 months. So because you’re quantifying it, it helps consumers like me rationalize the purchase. Okay.

Now, very important. Does the product you’re building exist today? And if it does, are people buying it? Is there demand for it? Can you do it any better? And can you be profitable? Now, the profitable part. Let’s say you want to compete against the iPhone, right? And it costs $1,000 to make, but they have economies of scale. They make millions. If you are going to start producing 100 at a time, you’ll never be able to get to that price point. It will cost you $5,000 per product. So make sure that you could actually be profitable selling whatever product you’re going to do before you go to market. Okay, now I love this example. This is actually how Amazon releases products. Anytime someone has a great idea at Amazon, they don’t just build it. They go backwards. Instead of building it first, they start with the end. So if you could see the first slide over here, it says, “Start with the customer and draft a press release.” So before they build anything,

they pretend that it’s already been built, and they work backwards and create a press release, a fake one, as if they’re already launching the product. This is what the product does, this is how it will help you, these are who the customers are. And once that press release is done, they send it to a lot of people at Amazon and they see, is it compelling enough? Do people like it? Do they love the press release? Should we build it? And then they start going with the regular process, but they work backwards. So it’s an interesting idea. Make the press release first, show it to some people, see what they think. Do they get excited about it? And then go from there. So, show of hands in the class, how many of you have heard of Google Glass? The glasses that you wear, from Google? Yes, okay, so a few people. Yeah, David, I see you. So Google Glass was created by the Google X team, and Google X is their secret research and development lab. I was very fortunate to meet one of the few, like five,

founders of Google X, and he told me how they built Google X and all their projects. So if I were to ask you how long you think it took to build the first prototype of Google Glass, you would probably tell me three months, one year, five years. And how much do you think it cost them? $10,000? You’ll throw out these high numbers. The first prototype took three hours and it was free. It didn’t cost them anything. Now I’ll explain how. They used a projector, which they already had lying around, and they made some fake slides, like you see here on the screen. They had a slide of JFK Airport, the weather, the news, your calendar, just some fake slides. And then they brought volunteers into the room, they put fake glasses on them, and they said, “Pretend you’re wearing Google Glass, and in front of you is what you’re going to see. It’s on the projector screen, but you’re going to see it in your

glasses. Just pretend. Now, let’s say this is your home screen. What would the first thing you do be?” And they saw volunteers swiping, and when the volunteers swiped, on the laptop they would go to the next slide, and swipe to the next slide. And if they clicked here, they would click here on the computer. So before they built anything, they were just seeing how people would use it. This saved them a lot of time and a lot of money. And guess what they learned? After about four or five minutes or so, people started doing this with their shoulders. They started getting sore. They said, “What’s going on?” “I don’t know, my shoulder’s sore from, I guess, all this swiping.” And what they realized and learned was that after a certain amount of time, I think it was four minutes, you cannot hold your hand up for long enough. You will get sore. So they said, “Oh my gosh, we were going to build this whole thing based on hand gestures, and that’s not going to work. We’ve got to change the idea and do it with eye gestures, maybe.” So that’s how they iterate and build what’s called your minimum viable product, your MVP. Before you build

anything, try to build a very simple prototype that you could just show people. Now, if you’re building a software company like we’ve done, you can build mock-ups and wireframes. There is a great company called InVision, InVision App, that lets you design and build these mock-ups, and they’re like live mock-ups. You can click on buttons, it will show dropdowns, it looks like the real product. So before you spend $30,000 on a developer or 5,000 hours building it, just make a mock-up and see how people use it. Are they excited about it? Will they use it? Okay, this is a very important slide for me. Now, this is a great line. Great companies don’t sell products, they sell visions and dreams. Now what does that mean? What do Red Bull and GoPro sell? Just think about that for a second. Your first reaction might be, Red Bull sells energy drinks and GoPro sells cameras. And sure, that’s

the product. But what they’re really selling, when you watch any of their ads or commercials online, they’re selling a vision and a dream of adrenaline, adventure, energy, excitement, experiences, memories. Skydiving, bungee jumping, white-water rafting, extreme sports, jumping from space. This is all their marketing. They’re not really showing you a lot about the product. You know, Red Bull’s a drink. Big deal, it’s just a drink. There were many energy drinks before them. But they were so successful because they created a brand and a lifestyle that when you drink Red Bull, you have wings. You can fly, you can do all these crazy things, be whoever you want to be, go extreme. So think about that when you’re selling your product and you’re looking to do branding and marketing. Think what else you can sell. What is the vision or the dream that you are selling? So for us, in our software, yeah, we sell software, but we also sell a vision of more free time, fewer employees, less overhead. You’ll be able to grow your portfolio, make more money, you could take a vacation,

you don’t need to always be in the office. So we’re also selling that dream. Work from anywhere, right? COVID, work remotely, work from anywhere in the world. So we’re also selling these visions and dreams along with it, which are like the benefits, you could say. Steve Jobs was a master at this, founder of Apple. When he first sold the first iPod on stage, he didn’t say, “Oh, I’m selling an iPod and it holds songs.” He said, “I am selling a vision of putting a thousand songs in your pocket,” which never existed before. A thousand songs in your pocket was something. Wow, what a dream, what a vision, that’s incredible. Okay, because before, you had CD players and you could only put 20 songs in your pocket. So a thousand songs in your pocket, that’s impressive, and that’s what he was selling. So, moving on to the next part. Why start your own company? For those of you that watch Shark Tank, they will always tell you, don’t start your own company to make a lot of money. I think it’s okay, personally. You can start a company and make a lot of money,

but there’s more to it than that, right? There’s a great speaker who is the number four all-time most viewed speaker on TED. If you go to TED Talks, he is number four of all time, 60 million views right now. Simon Sinek. I highly encourage you to write it down and watch this video. It’s quick, 18 minutes. He explains, people don’t buy what you do, they buy why you do it. Now what that means is, why do you do what you do? Apple does it because they love creating beautiful, simple products that help make people’s lives easier. Google wants to connect the world together. These are their missions. This is their why. Okay, and that’s why we buy into it. So people love Apple products. There are funny sketches, I think on Jimmy Fallon, where he puts on a fake Apple Watch. It’s like a Motorola, but he puts an Apple sticker on it and goes around New York City and says, “Oh, what do you think about the new Apple Watch?” “Wow, it’s amazing.” They couldn’t care what it looks like as

long as it has an Apple sticker on it. They love it. People love Apple so much they will buy anything Apple throws at them. They love the brand, they love the mission. Okay, this is the video, so definitely check it out. And by the way, I see some of you are taking notes. You can definitely take notes. I will also share this entire presentation and my slide notes with you afterwards, so you’ll have this as well. There are a lot of checklists here, a lot of questions, so you’ll get it. So what is your why? It could be to make a lot of money. Sure, that could be motivating for a lot of people. You could be solving your own problem. You could be passionate about this. You want to give back and help out, maybe a nonprofit, a charity. You want to change the world. Okay, and that’s perfectly fine. All these things could be your whys. But definitely understand what your why is, and why you’re waking up every single morning to do what you do. That’s very important. Now, target market. Who is your ideal customer? Now, I put these three examples here because this is our ideal customer. You

might only think you have one ideal customer, but for us, we sell real estate software. So for us, real estate investors, landlords, owners, property managers, property management companies. We have a lot of different customers, and that’s okay. You could also have a lot of different customers, but try to really focus it and find one ideal customer. And I’m going to reiterate this again. Make sure you don’t fall into the trap of saying, “Anyone is my customer, anyone can buy my product,” because you will not have a niche market, which we’ll explain in a minute. But really try to pinpoint who is the perfect person for you, and I’ll go more into that. And I have a quick warning, okay? Beware of having two completely different customers. Now, what I mean by this is, let’s say you are a training platform online that connects personal trainers with people looking to work out in group classes. So I want to join a group tennis class.

I love tennis, for example. So that software has to find two different customers to use their product and app. They have to find the consumer, me, people that want to play sports and play tennis. And they have to find coaches and trainers that want to sign up and give the classes. Two totally separate customers that you have to sell to and advertise to and market to. The problem is, it gets very hard and very expensive to start selling to two totally different customers. Many of my friends have tried this, and all of them have failed so far. It’s really expensive, so just be very careful about this. Now, let’s talk about buyer personas. You might have learned about buyer persona profiles. So what are they, why do you need them, and how do you create them? A buyer persona is pretty much a mental vision in your head of who your exact buyer is. So

you might even know the perfect person. Maybe it’s someone in your life named John, and maybe John is the perfect person. He’s a friend of yours, he would love to use your product. And anytime you think of anything regarding your product or service, you think of John. And John is 24 years old, male, likes to play sports, likes to go out, and he would be perfect for this new sports app I’m building, for example. So always have a vision of who your target customer is. Take a picture of that person, or find a picture online, and put it on your wall. You’re always thinking of John. Would John use this software? Would he like it? Now, here are some questions I’ll give you to come up with your buyer persona profile. What is their name? What is their age or age range? What do they look like? Do they have a family? Are they married? Do they have kids? Are they educated? Did they graduate college? What sports do they play? Hobbies? What music do they like? What companies do they work at? What job titles do they have? What challenges are they facing? What

websites do they read? These are all really, really important questions to ask. Okay, here’s a final example of what you will build eventually when you have a buyer persona profile. This is Brandon. He’s 38 years old, he has an income of less than $100,000, he’s the decision maker, et cetera. So this is kind of an idea of a buyer persona profile. It doesn’t have to look this fancy or nice, but you get the general idea of what you’re trying to build in your head. Now, to give you an example of how detailed our ideal customer is for our software, we are looking for a property manager that manages around 25 to 100 residential units and does not use a software today. And I can keep going, but it’s really, really, really specific. I know exactly who my customer is. And it’s so important to know that, because when I’m advertising online or in a magazine or anywhere, I want to know, who are your demographics? Who am I advertising to?

And if it fits my ideal customer profile, great. And if not, it’s probably not going to be the right fit. Also, when customers are signing up to our platform, to our software, and we’re talking to them on the phone doing a demo, we’re asking a few quick questions. Who are you? Tell me about yourself. And if they’re not fitting into our ideal profile and we know they’re not going to be happy with our software, we’re going to tell them, “We don’t think this is the right fit for you.” We’re not going to waste our time or their time. So it’s very important you know your ideal customers. This is a great book. I’m going to put about four books up on the screen today. I’ve read maybe over 100, 200 books, and these are my top four that I’m going to be putting up. Donald Miller is a great author. He talks about building your brand and your story and your customer profile. So this is a great, great book I recommend. And I will also keep reiterating, the only way I ever became successful and learned everything I know today is from reading books. That’s it. I didn’t come up with anything.

I’m no genius. I was definitely not a great student in school. I read a lot of books, and I learned and absorbed as much information as possible, and then I implemented it. These people, these authors, are giving away their best secrets from their lifetime. Just soak it all in, absorb it, and take action on it. Execute on the ideas that you get from the books. So how do you identify customer pain points and assess their needs? Well, number one, if you are making a product that solves your own problems, then typically speaking, you know what problems you’re having. My brother-in-law loves hiking and camping, and he hates all the tents that he has. This tent is too soft, this tent is too heavy, this one gets wet, this one isn’t waterproof. He knows his problems. So now he’s building a tent in China that he’s going to manufacture and sell on Amazon, but he already knows the pain points and problems. So number one, if you already know your pain points, phenomenal. But there are other ways to dig in. The easiest way

is just to ask. Ask your potential customers what their pain points are. How do they solve this need today? Let’s talk about sleeping bags. “Oh yes, you have a sleeping bag. What do you like about your sleeping bag? What would you do differently? If you could build any sleeping bag in the world, what would it have?” Or a software. Let’s say we were looking to build a jewelry software one time. We went to a lot of jewelers and diamond people. “What are you using today?” “Oh, Excel,” which is what most people use. “Why haven’t you used a program? Why haven’t you used a software today? Oh, you do use a software? Which one do you use? Do you like it? Do you not like it? What would you change?” Okay. Now, it’s very important to be careful who you ask. You don’t want to ask family and friends, because they might sugarcoat things and not want to hurt your feelings. You want real, raw, authentic feedback. And you also want to make sure people are serious. So if you tell them, “I’m looking to build this product or

service or software. Would you use it?” most people say, “Yeah, yeah, sure, I’ll use it. Sure.” And then when the time comes and you actually build it, they’re not going to use it. So the last question is important. Ask them, “Oh, you would use it? Are you willing to sign a contract and use it when it’s ready?” How serious are they? You’re not actually going to make them sign a contract. You might, and maybe you’ll give them a benefit or a discount if they sign an early contract, pre-purchase, pre-orders. You might. But you really want to see how serious they are. Now, big warning. If you’re doing your homework and research and talking to all these people, and by the way, every time we’ve started a company, we’ve done about three to six months of research before even writing the first line of code or building the product. It doesn’t always have to be that extensive, but that’s what we did. And if you find that no one is using a similar product, let’s say you’re building that jewelry software and no one is using one, no one has a need for it, be careful. Don’t get excited. “Wow, no

one’s using it, there’s no competition, I’m going to make millions.” It might be the opposite. There might not be a want or a need in the market. Okay, so on Shark Tank, for those of you that watch it, they always say this. “Okay, the market has spoken. They do not want your product. You’ve been selling it for three years, you’ve made $10,000. No one cares about your product.” And Mr. Wonderful says, “Take it behind the barn and shoot it,” right? Like a cockroach, whatever his line is. So it’s true, there might not be a want or need. That’s why you have to do a lot of research beforehand. And I love using this example. What if COVID were to hit again? A lot of people lost their business during COVID. A lot of businesses didn’t survive. Big companies didn’t make it. So now do the COVID test. If I build this product or service, will my business survive during COVID? Is it a want, a luxury item, or is it a need? So for software companies like ours in the

past, it is a need. They need our software to run their business. If they don’t have our software, they cannot run their business. It’s a need. So would your company still be alive? Would you keep selling? And would your existing customers cancel? This is the COVID test. Now, what you want to see when you are doing research and asking for feedback and talking to customers is that they’re unhappy, meaning they are not happy with what’s currently available in the market. Maybe they are not using something. Maybe they are using something. And if they are using a competitor’s product or service but they’re willing to switch, that’s a great sign. So we had someone say, “I hate this company, I want to switch. Someone needs to make a better product.” If they’re begging you to make your product, begging you, you know you’re onto something. Okay, now here is a little trick that I’ve picked up. You can also identify

pain points from your competitors. Just go to Google and type in your competitor’s name and “reviews.” One of our competitors was called Clio. You type in “Clio reviews,” and you’re going to find tons of reviews online about your competitors. Look for all the bad reviews. If you’re selling on Amazon, for example, look at all the negative reviews and see what people are complaining about, and then make it better. So in the tent example, he saw that people were complaining that the tent wasn’t sturdy or durable. It kept ripping on them. So he’s going to make a really durable tent, and then in his headline he’s going to say, “The most durable tent ever, that doesn’t rip.” You follow me? So take those pain points and make that your competitive edge with your product. Another example, and this is great for software companies. Some software companies publish their feature wish list, where all the customers are voting online, “These are the features I want.” Look at the top three features and build that.

Okay, so here is an example from my last company, where we were selling software for lawyers. One competitor realized that lawyers hated using QuickBooks. They didn’t want to deal with accounting, they didn’t want to have two softwares, they hated QuickBooks. Their entire pitch, here’s their website, look at the first line of the website, was “No QuickBooks required,” and they had a logo with QuickBooks crossed out. This was their whole pitch, and they got big so fast because they really nailed it. They nailed the pain point, and people loved that. So who do you ask for feedback? You know what to ask, but who do you ask? Obviously your initial network, friends, family, connections, people in the industry. Online, go to LinkedIn, try to find some people, try cold outreach, message them. Or put it on social media. “Hey, I’m looking for three people to be one of our first beta testers and give us feedback on building this awesome product. Who wants to talk to us?”

And you’ll be surprised, people will reach out. You can also have an advisory board, like what we did. We found a few people that we really thought would be great to help us along the way. So for lawyers, we found five lawyers that were really influential, and we asked them, “Do you want to be on our board of advisors?” And they all said yes. They get no money, they get no equity. They’re just happy and proud to be part of something cool and fun and exciting. And in return, if they use the software they’re helping build, they get it for free, forever, for life. Okay, so you can put together this little advisory board, or early beta testers. Who wants to be a beta tester? Who wants free samples, free products, in exchange for your feedback? You could do that also. Now, another big warning, and I’ve seen this many, many, many times before. Do not be blind to bad feedback. Okay, so whenever I talk to someone that has an exciting new idea that they think is going to change the world and

make them trillions, they are so excited and in love with the idea that they are totally blind to all the potential pitfalls and negatives and cons. And I say, “Oh, what about this that could happen?” “Oh, that won’t happen.” “And what about this?” “Oh, that won’t happen.” I’m like, you’re not even listening to me. You are blind. You think that you’re going to have this amazing product. So I’m sure all of you have heard of SWOT analysis. Strengths, weaknesses, opportunities, threats. Be very realistic about the competition and about the threats. Okay, it’s very easy to get excited and it’s very hard to be realistic. So do not underestimate the threats and do not ignore the bad feedback. And how do you ask for feedback? Obviously in person. You can do email campaigns, you can send out a survey, a Google Form, ask someone to connect on Zoom, whatever you want. There are many, many, many ways you could do it, and there are many surveys you can run. When I was building my companies, I didn’t know what to call it. I didn’t know what the company name should be.

I sent a survey to all my friends. “What’s your favorite company name?” Once I had the company name, another survey. “What’s your favorite logo? What’s your favorite website design? What’s your favorite product design? What features should we build next?” You know, there are many opportunities where you could survey people. Survey as many people as you want. They will help you. And this is something that we currently do today, all the time. It’s a website survey. So eventually, when you build your website, you can have a website survey. There’s a company called Hotjar, H-O-T-J-A-R, Hotjar. It’s free, you can install it on your website for free. This is what it looks like, a little pop-up with a survey, and you will get tons of good feedback from your website. All right, getting into the market size. Super, super important. Before you ever build anything, you want to find out how big this market is. Can you actually succeed? Can

you make money? Are there enough customers? We call this TAM, total addressable market. And you’re just going to Google like crazy. Whatever product you’re selling. We’re in the property management industry, so we were looking for property management survey statistics, number of customers, revenue, anything we could find. Just Google, Google, Google, and look for survey stats, anything you could find. Now, here’s a little trick, a pro tip. If you have competitors that are publicly traded on the stock market, they are required to file quarterly reports with the SEC that are available online. Read their quarterly reports. They will tell you the number of customers, the market, a lot of information. Also, there might be tons of local events you can attend in the industry. Attend the events, meet the people, meet your competitors, meet other industry vendors, and ask them. Get their feedback. There are a lot of questions you could ask to assess how big the market is.

So how many customers? How much revenue? What percent of the market uses this product? We found a survey that said only 30% use a software to manage their properties. How many customers do our competitors claim to have? So if there are a million customers and our competitors are only claiming to have 50,000 in total, all the competitors, wow, there’s a lot of meat still left in this pie for us. Okay. The last two are my favorite questions. How many searches does the keyword get on Google? Because when you’re going to start advertising your product, or spending money on Google Ads or Facebook ads or anything, you want to make sure people are searching for it. If it’s something no one is searching for, it’s going to be very hard to advertise. Okay, so you want something with a lot of Google searches. There’s something called Google Keyword Planner. It’s free. You type in your keyword, like “property management software,”

and it will tell you exactly how many people are searching for that keyword every month. Generally, you want to see keywords that have search volume in the thousands. If it’s under 100 a month, that’s nothing. Okay, very important, another warning. Do not overestimate the market size. What I mean by this is, if you read, “Wow, the real estate industry is a $100 billion industry,” great, that’s the whole real estate industry. Who cares about that? I am only building a tiny little product for a tiny little segment of the market. I want to know, what is the size of the property management software industry for residential property owners with under 100 units? How big is that industry? That might only be a $1 billion industry. So be very careful overestimating the market size. Okay, and for those of you that watch Shark Tank again, they hate when people say, “The industry is $100 billion, and if we only

capture 1%, we will be billionaires.” They hate that. That’s like the number one rule. You’ll see Mark Cuban right away go, “I’m out.” It’s the worst thing you could ever say on the show, because you have no idea how hard it is to capture 1% of the industry. However, the larger the industry, yes, the better, because the bigger the pie, and the bigger the pie, the more scraps there are for everyone. Now, I’m sure many of you have heard of the Pareto principle, which is the 80/20 principle, and it totally applies here. You will find that 80% of the market is owned and controlled by the top three companies. Usually the top three competitors already own and are going to get 80% of the market, and hundreds of other companies will be fighting for the other 20%, the scraps. Okay. However, you can be a multimillionaire

off the scraps. You don’t need to be the number one biggest one. If you’re the 20th biggest one, that’s okay. You can still be really, really successful. There’s a lot of money at 20. So don’t be afraid if there’s a Goliath out there, a giant company you’re competing against. There are a lot of scraps if it’s a big enough market. Now, another warning, and I made this mistake in my last company. Don’t go after the entire world. Don’t say, “The entire world is my market. I can sell to anyone and everyone. I’m going to destroy Facebook and Instagram, I’m going to take them down, I’m going to have a better platform than them.” Don’t make that mistake. You want to specialize at first, especially if it’s your first company. You want to specialize and have a niche market as much as possible. A niche market means, I’m just going to take a small piece of this pie. I’m just this 5% or 1% of the pie, so I’m hyper-focused and hyper-targeted to

one customer. So I’ll tell you a story about the first company that I worked at, called Nova Point of Sale. At first, this was their niche market. They built the software for kiosk owners in the mall. If you shop in the mall, they have the stores and they have the kiosks in the middle, right, that sell cell phone accessories, stuff like that. Their software was for Israeli-owned kiosks in the US only that sold hair straighteners. That’s how niche that product was. And they blew up. Every single hair-straightener kiosk in the US owned by Israelis had the software. Once they did that, they opened it up to other products, and they said Americans and other ethnicities can use it, other nationalities can use it, not just Israelis. And as they kept expanding, then they said, no more just kiosks, now retail stores can use it. Okay, so you start small and then you can expand later. Be careful not to go big at once and go after the

mass market. It is really hard and you will need a lot of money to compete with the big players in the market. Okay. A lot of people also want to go international on day one. Calm down. There is enough money in the US, trust me. You can be a multimillionaire if you just focus on the US, and eventually you will expand from there. When you’re doing your market research, I like to look at the US. You can also look internationally, but really try to focus on the US, and trust me, the other markets will come. We are only advertising right now in the US, and we already have customers in 18 countries because they’re just finding us. And that’s great, but we’re just focused on the US. Eventually you could sell worldwide, when you get really successful. Now, one of the last sections is about competitors. Really important. I love competition. I get excited when I see competition. Competition is good. People always ask me, “Oh, you started a new software. Is there a

lot of competition?” Yes, there’s a ton of competition, and it’s amazing. Why is it amazing? It means there is a huge need in this market that many companies are trying to fill. There is so much meat on the bone, so to speak. There is enough for everyone to eat. Okay, so I love competition. I get super scared for people when there is no competition. So be careful. Do not think, “Oh, no one’s doing it, I’m going to be rich.” Likely it’s the opposite. If no one is doing it, there may not be a need in the market, and no one cares enough about the problem. Maybe it’s just a want but not a need. So be very careful. Also be careful if a great competitor dominates and owns the market. So if there’s a really good competitor, and everyone you speak to uses them, and everyone loves them, and everyone says, “I would never switch,”

do not compete. You’re not going to win. If they’re amazing, and you don’t know how you’re going to do it better than them, and everyone loves them, and no one’s going to switch, what’s the point? Okay. Now, the number one question when dealing with competitors. How are you going to be different? How are you going to stand out? This is what’s called the UVP or USP, unique value proposition, unique selling proposition. Why should I buy from you and not your competitor? Okay, so you need to have that in mind. For us, it’s ease of use. When we did a survey, we asked everyone, what is most important to you? Price, features, functionality, time, automation, ease of use? Everyone said ease of use. And when you look at our competitors, they’re really hard to use. So we said, we’re going to be the opposite. We’re going to be super easy. And if you look at our website, it says easy, easy, easy, easy, everywhere. So when someone asks, “Why use you?” one word: easy. We know what we’re selling, we know how we’re talking, how we’re positioning ourselves. So I’m sure you guys have heard of this,

but if not, this is what’s called the 30-second elevator pitch. You need to know exactly what you do, why you’re better, what you sell, in 30 seconds or less. The analogy is, if you’re in an elevator with someone going from the first floor to the fifth floor and you have 30 seconds, what’s your pitch? Also, does everyone understand the pitch? Can you explain it in less than 30 seconds? If not, you have a problem. Once again, on Shark Tank, they have a 30-second pitch, and if the sharks don’t understand it within the first 30 seconds, chances are they’re not going to get a deal. It’s too complicated. Okay, it has to be easy to use and easy to explain. Now, when you start telling people your pitch, listen proactively. Listen to what they say. Do they say, “Oh yeah, that’s cool,” and forget about it? Or do they ask a lot of questions? Are they saying, “Wow, I actually know someone who can use that, let me connect you with this person”? That’s what you’re looking for.

People that get excited about your product, that would use your product, that are going to refer people to your product. That’s what you’re looking for. Now here’s a pro tip. Buy your competitor’s product. If it’s a product or software or service, buy it. You want to see what their checkout process is like, how they sell, how they deliver the product, how they follow up with you, what emails they send, what it looks like post-sale. What’s the training process? Do they upsell you? Do they stay in touch? What’s their support like? You are going to learn so much, because they’ve already done it. Why are you going to reinvent the wheel? They’ve already done it, so just piggyback off their ideas and do it better. Okay, another great tip I recommend to everyone: work for other companies. It’s very hard to be successful with your first startup if you’ve never worked anywhere else, at any other startup. I learned more working for a startup in four months than I did in four years of college. College was great, it taught me a lot of

things, but business-wise, in the startup world, in the software world, I learned more in four months at a startup. And guess what? I absorbed all that knowledge over the two and a half years there, and I felt very confident to start my own company right after. Okay. And it’s okay starting your company while you’re in college, while you’re in school, while you are in another job. You know, Google, Facebook, Microsoft, many companies all started in college dorm rooms. Okay, so it’s okay to have a side hustle, nights and weekends, as long as you can obviously focus on your schoolwork and also your current job. If you’re working a nine-to-five full-time job after college, it’s okay to come home and work seven to ten on your side hustle, and on weekends. And eventually, when that side hustle makes enough money that you can quit your full-time job, great, then you go for it. Okay, I have many friends that worked for law firms before they opened their own law firm. You’ve got to learn how to do it before you do it yourself. There are a lot of unknowns you don’t know.

All right, here’s the last topic, and then we’ll open it up for questions. So you have your product, you know the market size, you’ve done the research. Now it’s time to launch your product. And when you launch your product, this is usually exactly what happens. There is no overnight success, unless it’s a Kickstarter campaign that blew up and did really well, or you got lucky. But this is typically the technology adoption life cycle for tech and software companies. You have the early market. So look at the yellow, the innovators. These are the first two and a half percent of people. They will be your friends, your family, your close network, people who find you online that love trying new things. These are your beta testers, the ones that are willing to take the risk on you. So the majority is going to be your innovators at first, and then you have your early adopters, and then the early majority, which means that a lot of people are starting to use it. “Wow, this is a really cool product.” Now it’s really blowing up. And then the late majority. So if I compare this to the iPhone, when the first iPhone came out, there

were people on a waitlist, standing in line for two days. Those people, those are the innovators. Then the early adopters are the ones that got the first iPhone in the first six months. The early majority probably got the second or third version of the iPhone. The late majority got the fifth or sixth, the iPhone 7, iPhone 8. And the laggards are people like my dad, who finally just got an iPhone after 15 years. Okay, that’s typically the life cycle. Now, there is a part in this life cycle which is called the chasm, which is right here, in the middle. And the chasm is your transition from the early market into the mainstream market. Crossing the chasm is your opportunity, in that moment, for exponential growth and market success. It’s pretty much when something clicks. You have something called product-market fit, and then exponential growth, virality, people are referring you.

It’s a leap from being a little-known product to mass adoption. And there’s a book on this. I don’t recommend it, if you find it. It wasn’t a fun read. It’s called Crossing the Chasm. You don’t need to read it, but it’s out there. Now, this is a typical product life cycle. You have your startup, fast growth. It’s exciting, it looks like a hockey stick, right, up and to the right. Fast growth, maybe enterprise, bigger customers. And then a lot of times you have your decline. You get really big, and what happens is you get stagnant, you get complacent. And you must innovate. Always innovate. Okay, so this is typically what happens. You start off, look at the blue, development. You develop the product, then you have growth, now you’re mature, you’re getting stagnant, then you get into decline, because you stop innovating, you stop developing. So the cycle must continue. Keep developing, keep going in this loop. You must keep innovating. And there’s a great quote I love: innovate or die.

And you might find this funny, maybe not, but Blockbuster did not innovate. Who else didn’t innovate? Toys R Us, RadioShack, Sports Authority, Circuit City, Borders. All these companies are dead today. Borders and Barnes & Noble got killed by Amazon. Okay, all these other companies got killed by Walmart and Best Buy. Blockbuster got killed by Netflix. Blockbuster didn’t see the shift coming. They didn’t go to the cloud. Netflix did, seized the opportunity, and took Blockbuster down. Unbelievable. You must keep innovating. All right, so final thoughts. Fail early, fail fast and fail often. You will fail. It’s only a matter of when. My first two companies were failures, but I learned from my mistakes, and with each company I got better. Fail early. It’s important to fail early, when the risks are lower and you can take the risk, when you’re younger in life, like right now. It’s perfect. It’s much easier to fail in your teens

or 20s. You’re not married, you have no kids, you have no overhead, no responsibilities. Maybe you’re living at home, you don’t have to pay rent or a mortgage. It’s much harder to take a risk and launch a company later in life, when you need to make a steady income and you have bills to pay. Okay, so fail early. And also fail early in the company life cycle. You don’t want to fail three years into it. You want to fail in the first few months. And fail fast. When you fail at something, a product launch, a new feature, a test, move quickly to the next one. Do not linger around on your failures. Learn and move on fast. Just keep failing and keep moving on quickly. And fail often. If you’re not failing enough, you’re not taking enough risks. Try new things, be adventurous. Launch a new product, launch a new feature, whatever it is. Try new things all the time. Okay. And this is probably one of my biggest tips, like I keep mentioning. Read books, read books, read books. It’s so important to read books. This is my number one book I’m going to recommend today. If you are starting

a software company specifically, it could apply to others, but it’s great for software companies. The Lean Startup. Number one book. Anytime someone asks you what book for software companies, this is it. Another great book, which is great for business overall, is The E-Myth Revisited. The cover is not so appealing, but the book is phenomenal, about starting your own business, scaling, process, procedure, organization. Great book. And I am going to leave you with these last two slides. Do what you love. It is so important, because the moment you wake up in the morning and say, “Oh, I have to go to work again, I don’t want to go to work,” that’s miserable. You’re going to be miserable no matter how much money you make in life. A company could be paying you, I’ve seen this, $200,000 a year, the most you’ll ever make, but if you’re miserable going to work, you’re going to quit. You don’t care. You’re going to be miserable. So do what you love. Here’s a cheesy saying, but it’s true: if you do what you love,

you’ll never work a day in your life. And I will leave you with that. All right, thank you, guys, I appreciate it. I’m sure there’s applause. I can’t hear it, but I can see it. Thank you. And we can open up for questions. While he’s unmuting, I will put this up also. This is a link to download the presentation. It’s davidmbitton.com/bronx1. Does anybody have any questions? Somebody? Yeah. So this is something you mentioned at the very beginning, getting bought out by another company. I’ve heard people talk about this, but what does that mean? Does that mean when you get bought out, you just don’t have to deal with your work anymore, and the company that bought you will take

care of it? Or what does that mean? Great question. So there are many different meanings. When you get bought out, the first is they buy you out and they kick you out immediately. You get bought out January 1st, January 1st is your last day of work, and you never see the company again. Or it could mean you get bought out but there’s a transition period. For me, that’s what it was with my last company. I had a one-year transition period. They might require you to stay. So, “We’re buying you out, but for the next year,” I was the CEO, “we are going to transition to another CEO. We’re going to bring in another CEO, and you’re going to train them for one year so they feel comfortable taking over all your responsibilities.” So it was a slow transition. Another option could be you get bought out, but you’re still working in the company. Instead of being CEO or co-founder, now you’re chair of the board, or you’re just a board member, but you’re still part of the company for as long as you want, until you quit or until you’re fired, whatever it is.

So there are many, many, many different ways that can happen when you’re bought out. For me, my first one, I was bought out and then I handed the company over to someone else, and they ran it, and I was very little involved. My second company, I was bought out and they continued running the company, but it was a one-and-a-half-year transition, and I was still involved. Even today I still send tips, we still talk, we still communicate, we still get lunch. So I’m still involved, but not really. I was out of the company about a year and a half later. Great question. I had a question about when you gave the warning about never having two completely different customers. My question is, there are a lot of great ideas that are an interface between, like you said, two opposite users. But you said most of them end up failing because they’re two completely different customers. So

is there a way to work around that, and can you get more into that? So don’t always put the word “never” in your head, right? I mean, it’s hard. It’s really hard, because you have to advertise to customers. So when you’re making your marketing plan and you’re trying to target two different people, you’ve got to do double the work now to target two different people. All your social media campaigns are targeting two different users, two different hashtags, two different people. Your Google Ads campaigns are two different people, two different markets. So you’re competing in two completely different markets. It becomes really expensive and really hard and really time-consuming and really distracting to go after two different people. It’s hard enough trying to find one customer, never mind trying to get two different customers. It’s really, really hard. And also, I’m only one person with a few experiences and a few friends that have tried it, so I don’t want to put you down and say don’t ever

do it. It could work. It’s just much harder. How I would do it? In the beginning, you’re not going to have a lot of money, or any money, unless you’re going to raise money. So it’s all going to be organic, right? So you’ve got to go crazy on social, and just cold email people, cold call people, have interns that help you out, have co-founders that help you out. Get as much help as possible and do as many free, organic things as you can to try to get these people. If you have two markets, for one of them, let’s say your personal trainers, go to conventions and talk to personal trainers. It’s easier to sell to one of those customers if you’re going to be bringing them business so they don’t have to pay. For example, “Personal trainers, sign up to our platform. It’s free, you don’t pay anything. We just take 10% of whatever we pay you. We’re going to give you business.” It’s a lot easier to sell those people, because you’re not really selling them. You’re saying, “Just sign up. If you get business, great. If not, no big deal.” So

that’s easier, if you have that type of customer. And I will also put this slide up. If you guys want to contact me, here’s my email on the right-hand side. It’s me@davidmbitton.com. Feel free, ask away. If you want to pitch me your product, ask if you think it’s a good idea, or what you should do next. Don’t be shy, he’s here to help us. Nobody? All right, I think that’s it. Yeah, we’ve got Rebecca, I think, raising her hand. Oh no, we have one more. What’s your question? Can you do it on your computer? Yeah, let’s not do that. I’m sorry, you can just repeat her question if you want.

Okay, so the question was, what is a method of finding flaws in your competitor? Yep, for sure. So number one, buy the product or service or software, whatever it is, and rip it apart. Look for all the flaws. And it doesn’t have to be in the product. It could be in their process. So for us, we signed up to all of our competitors. We were selling a software, so we signed up to all the softwares, and we wanted to see how quickly they follow up with us. How quickly are we able to get on a demo? Was the demo good? Did they follow up afterwards? When we tried buying the product, was it easy? How was the training process? So buy the competitor’s product. Number two, you could work for a competitor. You can get a job there before you start your own company, if you have ideas.

Let me get some insight into the industry, get a real job, and see what they’re doing wrong. And then number three, this is the easiest one. Just look at the negative reviews online. There are always reviews online. Just look at the one-star, two-star, three-star ones and look for why those people are unhappy. And by the way, another tip. There could be Facebook groups with these people. For us, there are tons of Facebook groups of property managers, and you can just message them on Facebook. “Hey, you’re part of this group, can you give me some feedback?” Or I found people online that said, “I’m super unhappy, I’m dying to switch, I hate this competitor, I hate this product.” And I will literally email them or Facebook them or DM them and say, “Hey, I saw your message, I’d love to chat. Can you tell me what you hate? We’re building this product now. Can you tell me what we could be doing better? Would you like to help us out in exchange for a free product?” And they will be your raving fan. They will love you, they will refer you.

It’s great to have people like that. Yeah, what’s up? I wanted to ask, for a niche market, how specific would you have to be? How specific do you have to be, or how general is it? Great question. So you don’t want to go to the extremes, right? You don’t want to be so specific that you have four potential customers ever in life. You want to be specific enough that you can still generate good revenue and have enough customers that can still use your product, but you don’t want to be too general, to the extreme where anyone could use your product. So in the example of my last company, the legal software, there was that competitor I spoke to you about, CosmoLex. They were also building a law practice management software, like all of us were, but they said, “We are going to focus on accounting. We’re going to have the same features as,” my company, PracticePanther, “but we’re going to really have a niche

for the people that hate accounting, that don’t want to use QuickBooks, and we’re going to focus on accounting.” And that was their niche. They still had a lot of customers. In the lawyer software space, there were also companies that said, “We’re going to make a software only for personal injury attorneys.” Okay, and they did the research, and they saw there are 1.3 million lawyers in the US and there are 50,000 personal injury attorneys. And guess what? There are only two competitors, and they’re not that good. That could be a great market, and there are companies that thrive, that make millions off that small market. So you want to make sure it’s big enough that you can still make some money, but not too big and not too small. Should we continue using the same group?

So the question is, when you’re going through beta trials, sorry, what was it? The same cohort, or find new people? So both, because you want as many people as possible. It’s going to be hard to find beta testers, so the more you get, the more you use them. So use the same group and supplement with new people at the exact same time. You want as much feedback as possible. And also, the ones that have been with you the longest are going to be raving fans. They’re going to love you, because they’re going to see that you’re taking the feedback seriously, you’re implementing it, you’re growing, you’re moving forward, you’re adding features, whatever you’re doing. And they’re going to love you. They might even refer you to more beta testers. You never want to leave a beta tester out of the loop. You always want to keep them in the loop, keep them giving you feedback forever, as long as possible. So the

answer is both, existing beta testers and always new ones, as many as you can find, really, ideally. And just to add to that, one of our strategies in our last two companies was to offer our software completely free for the whole year, for six or 12 months, however long it was. So if you go to our website now, it’s going to say we are free until 2022, because we are trying to get as much feedback as quickly as possible and as many beta testers as possible. And here’s where it’s really brilliant. If we were trying to sell to all of these people on day one, we wouldn’t be able to sell to a lot of people. We would maybe have 10 new customers a month. Okay, so let’s say in 10 months we’ll have 100 new customers total. Great. Because we’re offering it for free, we are getting, let’s just throw a number out there, 10x, 100 people a month using it for

free. They’re not paying, but they’re using it for free every single day. And guess what happens after 10 months? It becomes sticky. They cannot leave. They’re hooked on it. They have all their data in it. They’re not going to leave. So at the end of 10 months, we have a thousand people now, versus a hundred. And when we start charging them, no problem. They can’t go anywhere, they’re using the software. So that was a great strategy for us to get a lot of people using the software early on and then eventually pay later on. Which is why you see so many companies offering a free trial, or, use Dropbox for free for your first two gigabytes, and then you love it, and you’re hooked on it, and when you run out of space, you have to upgrade. All right, I think we have one more question. Hi, this goes back to what you were saying about dreams and visions. When you talk about dreams and visions, are those a marketing technique, or are you making products based on

those dreams and visions? Good question. So you are not making the product based on those dreams and visions. That comes later on, once you have the product or the service and you are building the website, building the marketing materials, all that. Now that’s your branding. And Donald Miller, and the StoryBrand book, will give you literally a step-by-step framework of how to do it. But on your website, you don’t want to sell the features, you want to sell the benefits. So you will notice on our website, for example, it doesn’t say you can track time. It says that somewhere, but mostly it says you can save time, you could save this many hours, you could save this much money, you can make this much more money. You always want to take your features in one column, and then in the second column in Excel, put the benefit of each feature. What is the benefit of this? What is the benefit of this? Okay. And then also have the dream and vision. What are you really selling?

And then use all of that in social media posts, use all of that in your videos or testimonial videos. There are a lot of companies where, if you watch their testimonial videos, they’re not even really talking about the product. “Oh wow, this software changed my life. I have all this free time now. I get to spend time with my kids, I can go on vacation.” They’re not even talking about the software. They’re just saying the software helped them do all these things, and I want to live that life, I want to have that dream. Also, buy the GoPro, because if you buy the GoPro, now you can go skydiving and bungee jumping and go crazy and film all this stuff. That’s the vision that you’re painting in people’s heads. Great question. Anybody else? No? All right, well, they have my email. Email me anytime, no problem. All right, let’s thank David for coming in.

Yeah, thank you so much. Sure. I hope some of the students will be in contact, especially as they’re working on their pitch. Yep, happy to help anytime. Sounds good. And I’ll be back, I think, in about maybe 10 days for another class. Yeah, all right, thank you. All right, thanks, guys. Take care. Bye.