How changing your market can save your product
The other day, I was picking my daughter up from a birthday party. The father of my daughter’s friend is an arborist. Essentially, he makes his living pruning and caring for trees. He’s owned his own business for 12 years.
During our conversation he told me his business story. His first few years as a business owner were really tough. He’d grind and grind and grind, but wasn’t earning a substantial amount of revenue.
And then, he found his solution. He changed his phone number.
You see, we live in a small town. He was trying to earn his income from the local market. Unfortunately, most of the town’s residents are retired farmers, oilmen and industrial workers. These are true “do-it-yourselfers:” if their trees need pruning, cutting or care, they’re going to try to do it themselves.
But 20 minutes away, there is a very affluent suburb. Most of the residents are business people: managers, presidents, entrepreneurs. They don’t have time to care for their trees.: they need someone to do it for them, and they have the money to pay for it.
So, he switched his phone number to a number local to that suburb. He opened up a PO box there as well. And he started advertising in their yellow pages (this was 10 years ago), and their local paper.
The result? Almost 95% of his revenue comes from this suburb.
Looking at it in hindsight, it seems obvious: go where people need your service, and have the money to pay for it. But so many of us entrepreneurs are stuck trying to grind it out. Having talked to a number of entrepreneurs, I think if you launch a full-time business and you’re “grinding” for more than two years, something is wrong.
Why you’re not making money
- Wrong product - this is the worst case scenario: your product simply doesn’t have a profitable market. No one “needs” it (or wants it), and thus, they’re not willing to pay for it (or pay enough for it).
- Good product, wrong market - this is a little harder to determine. How do you know if your product is good? Try it out in a different market. My arborist friend knew fairly quickly that there was something different about the affluent suburb. Take your product to a different market, and see if it works.
I know of a software company that did this very thing: after grinding it out in the consumer market, they started catering to businesses. Revenue took off.
If you’re still grinding it out you need to figure out if you have a bad product. What’s the best way to do this? What kinds of target markets have you seen consistently perform well? Leave a comment and let’s have a discussion.