Monetization Beats Innovation and What it Looks Like
This is a quick “work smart” note to all of my entrepreneurial friends and
clients, and those who are thinking about monetization due to lay-offs,
job limits, etc.
Actually the word note isn’t accurate. What I want to quickly discuss
has been a sledge hammer for me. It both breaks apart dreams and
business fantasies, and also breaks open a crack in a market and
guides me on how to monetize or make the business go.
Here goes. First off a word of warning about innovation.
Most entrepreneurs I work with start “slobbering” when they
come up with an innovative idea or product, or when they
see some service or product gap in the market.
I’ve done this myself. You get the big idea an immediately
assume there’s a business to be developed, and “hey’s let’s
start counting all the money we’re going to make.”
Wrong… or at least misguided. Innovation isn’t nearly as
tightly correlated with making money as one would think.
For this blog’s purpose, there’s just two criteria to pay
attention to. Two criteria to help you move from the innovation
style of thinking to realistically figuring out if it’s a business idea
you can monetize, or make money from.
1. The first criteria has been written up a bunch, and often
I see it defined by quoting Gary Halbert’s comment that he
could sell more burgers than anyone else, because while
they would be focusing on various features and innovations
(my words), he focused on finding “a starving crowd.”
That always made sense to me, but it was never enough.
Yes, you need to find a big, motivated market that want’s to
buy the product or service you are offering. Notice I said “wants”,
not needs. The need word, as in they need this so they
should be expected to buy, has never worked out well for me.
For entrepreneurs it often leads to self delusions.
Anyway back to finding “a hungry crowd” not being enough.
If Gary were alive today, I’m sure he would agree with the
4 short words I’m going to add to his phase. He would
probably say, “Of course, it’s what I meant.”
2. Here’s the 2nd thing, the 4 words – “get in front of”.
That’s right. You need a vehicle to get in front of that
hungry crowd. You need a sales funnel process.
Without a sales funnel you still don’t have a business,
even if you have a cool product and a hungry market.
You have to have a vehicle for getting in front of
your buyers. For many entrepreneurs, this 2nd
point get’s fuzzed over. It’s a game breaker. Spending
a lot of time getting things done, getting ready for the big
unveiling of your new product is great. But without the
sales funnel figured out, you don’t have a business.
For “In & Out Burgers” that’s meant location adjacent to
busy freeway off/on ramps. If you’re selling iPhone
products, it means being accepted in the Apple Store.
Be smart. To make money, to monetize a product or service
into a business, regardless of how innovative…
requires having two fundamentals in place:
1. A “starving crowd” – a large market with money that want to buy
2. A way to get in front of them – a sales funnel that you either access or build
Looking forward to your thoughts.