PODCAST EPISODE TRANSCRIPT
Moving From Niche To Business, And Testing That Business Idea
It is always best to, early on, move from the “niche” right into the actual business model. If you want to create a REAL online business based around your blog, then we definitely need to think of it as a business and not a topic. In this episode, we make that bridge into business. I…
Episode #40 | Episode Date: December 17, 2014
Once again, welcome back to Coffee Break Blogging!
It is always best to, early on, move from the “niche” right into the actual business model. If you want to create a REAL online business based around your blog, then we definitely need to think of it as a business and not a topic. In this episode, we make that bridge into business. I introduce a one-page business plan idea and begin taking about how to TEST your business idea before investing a bunch of time into it.
Now in our last few episodes we have been talking about selecting a good market or a niche to get into with our blog. And we were evaluating this based on its business potential.
Now by this point in our series you should have some potential ideas if not the one main idea that we are going to go ahead and proceed in our process with. Because what we are going to start talking about in this episode is actually how to start verifying that business model. How to actually make that bridge from a niche to an actual business model because a lot of bloggers actually really fall short on the whole idea of actually developing a real business model. They literally go from having a niche idea to just start the blog right off the bat. And that is the problem where people come into this a little bit down the road and they try to “monetize” that blog because it tends to be an afterthought. They just went literally from “interest-niche-setup the blog” and that was it.
That was their pathway into it and it just breeds so much complexity down the road usually in the area of coming to grips with the fact that they are not really going to make any money with that site. And that is not something that I want you guys to have to worry about.
So what we are going to talk about in this episode is how to bridge into the actual business model. And what I want to introduce you to in this episode is a concept called…
“The Lean Canvas”
The Lean Canvas is basically a ONE PAGE business plan concept and the least where I first got exposed to it was from a book called “The Lean Start Up” and it was from Ash Maurya, I wasn’t actually quite sure on how to pronounce the guy’s last name. But it really is an interesting, very valuable book about this concept of the lean canvas. So, there are nine boxes on this one page business plan and that to me; I find that this is just the most approachable concept of a business plan that I have seen and also really useful.
So what I am going to do is I am going to run through what these 9 boxes are but then we are going to talk a little bit about how to actually proceed with them. Now, I will forewarn you in this episode that we are not diving really deep into this topic. I actually have a course inside the Academy called “Discover Your Business Model” where I actually walk you through the thought process of developing the ideas behind each of these 9 boxes on the lean canvas that Ash came up with. But we are just going to touch on them briefly here.
The 9 Boxes of the Lean Canvas
Box #1 – Problems
So, box #1 of the lean canvas is: Your Problems. Identifying the problem that your target market is looking to solve. That’s the specific problem you are going to be solving for them by way of products or services of some kind. Now, being that I am primarily coming in to you with the idea of information business, then it is going to be training products that are going to deliver to them a solution by way of that information. So that is what we are going to be looking at. But what are the exact problems that you are going to be solving for them?
Box #2 – Customer Segments
Now, from there you want to start looking at your Customer Segments which is the next box on the lean canvas. The customer segments are going to be the exact people that you are going to be looking to reach with this business. We are looking at them in terms of groups. For example, if you are doing something in the area of photography then your customer segments would be various types of photographers. Like, wedding photographers, portrait photographers, what have you. And whatever information you think is most relevant there but we are thinking about different market segments that would be the right type of people that are going to have this problem that we are going to target with our solution which is the next box on the lean canvas.
Box #3 – Solution
You need to have a Solution to the problem. Now, we are starting up a blog and an information business, typically, to go behind that blog and so we are in a position where we can create lots of solutions for people by way of the information that we are providing. Now, if you are going to go to use a blog and go into consulting or any type of a service, great! Your service at that point is going to be the solution. But you really need to think here in terms of what that solution is really going to be and how it directly addresses the problem that you are listing on your lean canvas. You do not want to list under the solution box something like “eBook” or “consulting” or something. Don’t be vague about it. You want to ask yourself the question “how exactly is this solution specifically tailored toward the problems that are listed on this lean canvas”.
Box #4 – Channels
Now the next box is Channels. This is how you are actually going to reach these customer segments that you put on the lean canvas. How are you going to reach them? Where can they be found? What are the lines of communication that you want to get on to be able to reach these people? So if you are, again, addressing photographers and we want to find wedding photographers and portrait photographers, you have to ask yourself “Where can I find portrait photographers and wedding photographers hanging out on the internet?” or “What are they reading” like, literally “Where am I going to reach these people?” And you want to list that under channels on the lean canvas.
Box #5 – Unique Value Proposition
This one is interesting… This is called the Unique Value Proposition. Some people call it the UVP but it is the idea of having a very compelling message of why you are different than other people who are offering solutions in this same market. Why should they do business with you versus somebody else? Now, sometimes that can be a difficult question to answer. But you need to come up with something. And a lot of it is not going to necessarily always be an entirely different solution. Sometimes it is going to be in the positioning of that solution or in something that you have done differently with how you set it up to make it stand out and be different than somebody else. This is the whole idea of competition. And competition is a real thing. It is actually a good thing. It forces all of us to be better but we need to think about what we are bringing to that particular marketplace. What is your unique value proposition?
Box #6 – Unfair Advantage
These are those things that other people cannot easily copy. For example, your level of experience in this particular field…Your background, your knowledge; those thing will not be easy for everybody else to acquire because they have to go to school for it or what have you. So whatever niche that you are looking to go into or this business that you are looking to create; you need to brainstorm what your Unfair Advantages are. Those things that cannot be easily copied or cannot be just simply bought. And what are those things? Because those are the things that are going to help; especially when you put them alongside your Unique Value Proposition, to really help set you aside in that market and standout from the competition that you are going to have.
Box #7 – Revenue Streams
Now, your Revenue Streams. We are talking business here so obviously we are going to be looking at making money. Now if you are at the outset, you might not totally know what your revenue streams are going to be and that is fine. The boxes on this lean canvas can and will change. This is not something that is set in stone. So what I am asking you to do at this point is just simply put a few vague ideas here. You do not even need to list price points but look at your solution that you are proposing in the earlier box and then just lay out what the revenue stream is going to be.
Box #8 – Cost Structure
This is “how much is it going to cost” to run this business. So in an online business it is going to be things like hosting, your email marketing hosting; the typical things that go along with a regular online business. The beauty of an online business is that there are a lot more profit outside than expense, typically because it doesn’t cost that much to start a business like this.
It is more sweat than would be anything else. But you also want to look at any upfront cost that may come up in order to help you jump-start this thing. For example, if you think you are going to need to reach people via paid advertising on Facebook, then you might want to have something on the cost structure for that. Now, again… any dollar amounts you put here would be totally editable later. This is primarily an exercise in getting you to actually think about this as a business.
Box #9 – Key Metrics
So we get to the last box on the lean canvas which is called Key Metrics. You cannot grow what you can’t measure. That is just a basic fact of management. So you need to be concentrating on certain core metrics when it comes to your business and you would want to identify on this lean canvas what your key metrics are going to be. Whatever your primary goals are in that business; revenue, number of opt-ins…If you are getting ready to start a membership site possibly will be things like, number of new members per week, another one might be member churn which is going to be the amount of people who canceled. These will be some core metrics. You don’t want to have too many of them because it makes things really complicated but you do definitely want to have these KPI’s which are Key Performance Indicators in your business so you can actually manage by numbers and it also gives you something to focus on when it comes to your own productivity.
So those are the main boxes of lean canvas. I’ll just review them very, very quickly.
- Customer Segments
- Unique Value Proposition
- Unfair Advantage
- Revenue Streams
- Cost Structure
- Key Metrics
It’s A Powerful Tool
Now, I am going to make one last point here about the lean canvas and this goes really deep into why this is a really powerful tool for you to go through:
The lean canvas is NOT meant to be something where you just brainstorm it and pull it out of your head, write it down and then there it is. This is not “theory”.
Lean canvas is something that is a tool for you to actually go and test these ideas in an iterative fashion. What’s that means is that you put forth something that you are going to test, you are going to go out there and you are going to test it and then you are going to come back and re-evaluate, re-adjust slightly if necessary and then go back and test it again. And by doing that process over and over and over again, you can; over time, verify your ideas before you actually do them.
And this is something that I definitely recommend that you go through because it is really easy to start up a blog and a business behind it, put all those work into a membership site or what have you and thinking that the world is going to beat down your door wanting, but that ultimately does not happen. And we do not want that to happen. We want you you to go into this in little baby steps so that if that time comes when you need to pit it a little bit because your idea was not quite on the mark…
You want to iterate through this so that you go through it in baby steps that you don’t put a lot of effort into something that might not have been on the mark with the original idea.
So what you are going to do with this is you are going to develop a hypothesis on these things. For example, on the problem box, you are going to go and develop a hypothesis in a factual ways that says, “My market is experiencing [said] problem” or what have you.
Or let’s say you have a specific example here of; you are going to write a blog post and you are going to say that that blog post that is going to pitch this idea that I have should drive more than 50 early sign ups. So what you would do is you would write a blog post that pitches some idea that you have that furthers some boxes here at the lean canvas and you can set a metric for that that says “Well, if that was a good idea I should probably be able to drive at least 50 sign ups for it” and not on a paid thing, you just literally have an opt-in box. And so you put that as a measurable hypothesis and then you do that thing and you measure it and see what happens.
And if you fall short of those 50 sign ups well then you go back and you re-adjust a little bit and then you come back and try it again and see if you get those 50 sign ups. But that is just a really lose idea. But the whole idea here is that you are going to test these things before you hop into it. You want to see if there are legs on this idea that you have before you move too far ahead with it. Okay?
So that is a really broad overview of the Lean Canvas.
If you want to get more information about the lean canvas, then Ash Maurya (I am probably butchering his last name greatly!) But his book is called “The Lean Start Up”. Definitely a good book that I recommend you go through.
If you want me to walk you through the process with more detail, I have got a course that is pretty A to B inside the Academy at blogmarketingacademy.com where it is called “Discover Your Business Model”. It will help you go through exactly that.
Now in the next episode here of Coffee Break Blogging we are going to continue on this concept but we are going to specifically address how you can test out these ideas when you do not have an audience yet for yourself. The example that I just gave was the idea of you write a blog post to your audience and you can test an idea that wide by judging their response. But what happens if you do not yet have an audience to do something like that with? We will talk about that coming up in Episode 41 of Coffee Break Blogging. Okay?
I will see you then. Hopefully next time I will not have my pre-recorded thing getting in the way again. This is one of those growing pains of getting into a more routine habit of making the podcast. Don’t worry, I’ll get better at it over time. 😉 And by that I mean, there’s a blooper in the recording that you would want to listen to! 😀
Anyways, see you next time!
Hey, after I went back and recorded this episode, something bothered me about the name of that author of that book. And here is what it was… I got the guy’s name completely and totally wrong. Ash Maurya; I remember coming across this guy’s name, he wrote a book called “Running Lean” which is a book that I have read and it was based on the idea of The Lean Start Up. Now, that book called the Lean Start Up was actually written by Eric Ries. So, I totally screwed that up in the original recording; wanted to come back and correct it. But those are actually two good books, I got them both on the Kindle. One is called The Lean Start Up and that is by Eric Ries. I’m having a really hard time on both of these guys’ names. And then the other one is Running Lean, this one is by Ash Maurya which is the guy that I originally accredited with the other book. So, yeah… Sorry about that. Anyway, wanted to come in and correct that.
I’ll see you on Episode 41!