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What do you think matters the most in business?
- Your market
- Your product
- Your persuasion skills (sales/copywriting)
In his book $100M Offers, Alex Horomozi talks about the importance of a “starving crowd”. His idea is that the market you operate in is way more important than your product or your persuasion skills.
- Market > Offer strength (product/service) > Persuasion
An average product in a good market will do much better than a good product in a shrinking market.
Think about the toilet paper shortage during COVID.
An average, commodity product, got crazy sales because of a starving crowd.
It’s unlikely that you will find that kind of a market for your product. But the least you should do is not enter a shrinking market. (something like newspapers for example)
If you’re starting out, make sure to enter a “normal” market.
Today we’ll look at Horomozi’s 4 step framework that can help you pick the right market to enter.
But before that, I want to introduce you to GummySearch
🙏 Supported by: GummySearch
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*Many thanks to GummySearch for supporting the SuperFrameworks newsletter this week 🙏
(GummySearch is the perfect tool to apply the framework we’re discussing today. Do give it a shot.)
4 Part Framework to identify the right market
When picking a market, you should look at 4 indicators -
- Massive Pain
- Purchasing Power
- Easy to Target
- Growing
Let’s look at each of these factors in detail:
One of my favorite SaaS tools is a video editing app called Veed.io, we will use Veed to understand each of these indicators today.
Massive Pain -
Pain can be anything that frustrates people about their lives - their income, their health, their looks, their job, their relationships.
Hormozi has a great quote about this -
“The degree of pain will be proportional to the price you will be able to charge.”
When you pick a market, make sure your potential audience feels a massive pain that you can solve.
Veed eliminates the hassle and frustration associated with video editing and production. Creating high-quality videos is a time-consuming and expensive (and painful) endeavor.
Veed makes this process easier for creators.
Purchasing Power -
Your audience needs to be able to pay you for your product or service.
You can have the best product in the world, but if your audience can’t afford it, you will never make revenue. So be very careful of the market you’re entering.
According to it’s pricing page, Veed broadly targets 2 personas -
- Indie creators making videos for their YouTube channels
- Enterprises looking to make quality videos for their ads and social media presence
Both personas stand to make more money if Veed helps them make quality videos. So such an audience will always have the purchasing power to pay for your product or services.
A counter example is a Twitter handle with 100K+ followers that delivers short English lessons every day to it’s audience. I spoke to the founder behind that handle and asked him how he was monetizing it.
He said he’s tried every model and failed miserably at monetizing his Twitter and YouTube channels. Because most people in his audience are jobless youth from India, Pakistan and Bangladesh. And they want to learn English to find jobs in their countries. (This info is from the DMs and email requests that he gets)
They just don’t have the money to pay for any of his premium courses. He’s from the UK and wants to help his audience, (and he does) But he isn’t able to make much money from this project.
So when you enter a market, make sure the audience can pay for your offer.
Easy To Target -
This is a big one.
You can be solving a massive pain for an audience that can pay for your offer, but you will never be able to scale your sales if you don’t have an easy way to target them.
One off sales can happen here and there, but if you want a predictable stream of new customers in your business, then you need ways to easily target them - free or paid.
Your audience should hangout in recognizable spaces where you can meet them every day (we discussed this earlier in the watering holes framework)
Veed in it’s early days massively leverage Quora and Reddit.
The founders answered hundreds of questions around video editing on these platforms and promoted Veed there to create a steady stream of traffic to their website.
Veed’s founder Sabba Keynjad’s Quora profile is worth getting inspired from.
If your audience is part of an online community, a newsletter, a forum or if it’s asking questions on Quora then you can easily target them.
Hashtags on Instagram, LinkedIn and even Twitter can work well.
Though, one of the the best “watering holes” is Reddit.
If you can find 10 subreddits where your ideal users hangout every day, then it will become very easy for you to target them.
This tool can help you find those Subreddits
Growing -
Finally, you want to make sure that the market you are targeting is growing.
This means that the market is expanding and that there is potential for future growth.
Hormozi has a great quote on this -
“Growing markets are like a tailwind, they make everything move forward faster. Declining markets are like headwinds, they make all efforts harder”
The founders of Veed hit a jackpot here.
With video taking over every social media platform right now, their market is growing exponentially every year.
While if you’re in the business of newspapers or printed books, you might be fighting against the headwinds.
You can get a sense of market growth by looking at Google search trends, social media conversations or even in the growing size of a subreddit.
Yesterday I was doing a bit of research for my own products and services, and I found a few interesting subreddits that are growing at a healthy pace -
(Screenshot from my GummySearch account )
So when the time comes to pick a market to enter in, make sure to keep these 4 factors in mind
Quick recap -
- Massive Pain
- Purchasing Power
- Easy to Target
- Growing
Hope this helps you a little.
🔗 Super Links
Useful links you don't want to miss -
- If your landing page lives on Carrd, make sure you have this setup.
- “More customers at a low price, or less customers at a high price?” This is an eternal debate, found a great article tackling this issue, read an annotated version of it, with my highlights here.
- A step by step playbook to build and launch an info product in 14 days. Start today
- A question you should ask yourself everyday
(*Links in bold are classified ads, to book your own ad here, please send me a DM on Twitter.)
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Ayush 🙏
