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This is a guest post by Noah Kagan. Noah is the founder of AppSumo and built two multi-million dollar online businesses before turning 28.

When most people think about starting an ecommerce business, they have a vision of selling some amazing product that will enable them the freedom to work on something they truly enjoy. But despite early enthusiasm, sometimes they end up not taking action.

So what happens to these people?

    • They don’t have any idea of what to sell
    • Worrying about failing prevents them from starting
    • They have an idea but are not sure what to do next

Does that sound like you? Don’t worry. We’re going to show you some meaty and actionable stories of how two people were able to start their own ecommerce businesses without spending any money.

These two people are members of my How to Make a $1,000 a Month Business Course. We’ve helped over 3,000+ entrepreneurs and it’s been fascinating to see how these people started their businesses.

Let’s get to it, enter Brian Pulliam of Backplane:

What problem were you facing?

I injured my back and realized the importance of having good posture during rehab. Since I sat in an office chair all day for engineering work, I decided to make a product for myself. When I realized it was helping me, I wanted to help others too.

Brian’s product helps you have better posture and ultimately a happier back while you’re sitting at your desk all day.

How did you determine people wanted to buy your product?

Simple. I validated the idea by asking people to buy before I started making them. Pre-sales is a powerful strategy that helps you ensure there's real demand for your product and minimizes financial risk. Also, I had faith in my product's ability to help people with their posture because I was the first client (which sounds very Hair Club for Men, but it's true).

Too many people spend too many hours scouring Alibaba, doing market research and wondering if people will buy the product they want to sell. Pre-sales helps reduce those assumptions and gets you moving forward faster with your business.

How did you create the first version of your product?

My product is about posture, and my PT and chiropractor suggested a foam roll laid along my spine. I did some measurements on how much my shoulders relaxed when using a foam roll, picked up a hacksaw, and started experimenting. In short, I failed a bunch with the first prototype. In fact, it gave one of my early customers a migraine (not the intended effect, oops!) It would have been easy to give up right there, but I knew that success was through a forest of failures, and got to iterating.

The early versions of the Backplane

What were the core takeaways you had from this process?

  1. Pre-sales (see above).
  2. Get over your fear of failure (yes, it is stopping you from success).
  3. Focus on fundamentals: Ask people what their problems are, identify a solution, pre-sell it, over-deliver with execution, go where the customers are, and show them how it solves their problem.

Most people focus on the solutions instead of identifying the problems people want solved. Make sure to work backwards from the needs of your potential customers (including yourself).

What were the biggest roadblocks you faced starting your business?

Convincing people it will work before they buy was solved with video and testimonials. Some folks also have an issue with my product not being made of fancy materials. I'm more of a guy that cares if something works. To keep my costs down, I keep things simple.

Your product will NEVER be perfect. Focus on finding people who want it and then you can evolve your product to be better over time. Think about the first generation iPod vs the current iPhone 5s!

What were the most memorable moments from selling this product?

Practicing failure was key to persevering with this product. It's a turning point. I remember the first time watching Shark Tank after successfully pre-selling my product. I was yelling at the contestants "What do you mean, you are PRE-REVENUE? You have HOW MUCH inventory? 2800 SKUs … ARE YOU CRAZY!? HOW WILL YOU SELL THAT?"

Fear of failure is one of the most non-talked about issues people face when starting a business. Practicing failing in your business and personal life will help you overcome the fear of failure. Check out FailureGames.com or Strangerchallenge.com.

What have you learned since selling physical products?

I had to get over my need for things to be perfect. I have iterated with customers, especially when it comes to something as variable as posture for individual humans. My current design is the result of 27 prototype iterations. I've also learned to politely ignore people who immediately start giving me advice on how to SCALE, when 99% of those people haven't ever made a single dollar on a product themselves.

What do you recommend to other people who want to setup an ecommerce store?

First, get a customer base. Early interaction with customers is key to ensuring you have a great product and you address the most common concerns. An ecommerce store should be a solution to the problem of having too many customers to fulfill manually. Once you have that problem, make it as easy as possible for people to buy.

How much have you made from selling your product?

I'm up to about $1000 in revenue, with zero investment of my own money. Read that last sentence again, ZERO.

EasyWhey

Enter Dan Maisano of EasyWhey, who started his own protein drink to-go product.

Why did you decide to sell your product?

I read Tim Ferriss' book Four Hour Workweek and the idea of a "Muse" type business appealed to me. I decided to create "Dan's Super Convenient and Awesome Protein" shake because I drink whey protein on a regular basis but it has never been the most convenient thing to do.

As one of the healthier snacks/meals out there it would be great to be able to drink it anytime. Breakfast, lunch, afternoon snacks, traveling, car trips, movies etc. I know many people who use the shakers that lets them scoop in their own whey, add water or milk and drink. To me this was never convenient.

A person had to then carry the shaker around with them, make sure they clean it ASAP (if you ever have smelled an old protein shaker you know why) and just plan to have it with them until they are able to get home. I personally wanted something that I could drink when I wanted and then forget about it.

As we’ve seen in both examples, creating problems to your own solutions is a great place to start with business ideas.

How did you determine your products were a good product to sell?

Once I had the idea in my head I used the advice from the How to Make a $1,000 a Month Business course and validated it by seeing if anyone would be willing to buy my product before I invested any time or money into it. I had 7 people actually Paypal me $30 for a guarantee that I would send them my first shipments OR their money back if I never actually got to production. Up to this point I spent $0.

Pre-sales remove a lot of assumptions and doubt whether people will buy what you are making.

How did you create your first prototype once you validated it?

The hardest thing for me was actually creating the product. I had my idea in my head but had an "OK, now what?" moment. I shopped around on Google trying to find bottles and lids that I thought would work well. I got a few free samples to test different sizes and I used the whey protein that I normally use and put it in the bottles to try it out. I really liked how it worked so I placed a bigger order for bottles and lids and this was actually the first money I invested into this. However as I already had money from the people I pre-sold to I was able to use that to purchase the supplies I needed.

The fulfillment of the product can be challenging but focus on making a basic budget (to ensure at least break-even) before you pre-sell and focus on keeping your solution to that problem as ghetto as possible at first.

What did you learn about yourself from starting this business?

Two things really stand out. As a naturally shy person pushing past my comfort zone and getting myself out there was a new experience. By doing so I learned that it really wasn't that hard or uncomfortable as I imagined.

A great way to practice overcoming fear is taking our “Coffee Challenge.” Go to Starbucks or any cafe and ask for a 10% discount. It’ll help you be less afraid asking for things in your own business.

The other thing I was able to implement was the validation of my product. I had 7 products sold before I had anything more than the idea in my head. No website, no business cards, not even the product yet! I had 7 people actually paying me for what was simply an idea, and because I was able to do that I knew I was on to something that would actually work. That was a much better solution than spending a bunch of money and time and energy building a product, website site, etc. before I knew if there was anyone else out there that would buy it and use it.

You can use Paypal, Shopify, Gumroad or eventbrite to pre-sell your idea at no cost to you.

What was the hardest part about setting up your store?

I have messed around with Shopify in the past using just a mock idea a friend of mine had. I never took it to production and just let the site die after I was done playing around with it. It’s easy to setup the store but the hard part is getting customers. Doing things in reverse and then setting up the store makes life much easier.

Once you get customers through a manual process a store like Shopify will save you significant time.

What were the most memorable moments from selling this product?

Definitely when I got my first customer to say that they liked my idea enough to invest $30 into it. Second time was when I placed my order for my bottle samples. It was a "Wow, I am really doing this" moment for me. Third was sending out my first shipments. It felt like a really big accomplishment (and I suppose it was!). And lastly when Noah himself told me he liked my product after trying it!!

It’s important to know who your ideal customers are so it makes your life easier to find out WHERE they are online / offline.

What did you learn about selling physical products?

I never really thought it was possible to sell a product without already having it. The idea that I could sell my idea first and then turn it into a product after I knew it would work was a major step turning from "wantrepreneur” to entrepreneur.

What do you recommend to other people who want to setup an ecommerce store?

Definitely validate your idea first before setting up a store. And you should be doing everything and anything manually until you have such a demand that you can't do it all yourself anymore. Keep it ghetto for as long as possible!

How much have you made from selling your product?

Not much yet. I am trying to reinvest any profits back into the product to make it better (labels for the bottles are on the top of my to do list!) Right now I am more focused on getting the word out there that I do have a great product, and I figure if I have enough people that know about my product and they are all satisfied with it, the money will naturally follow.

Anything else meaty you want to share?

In the time it took me to write up these answers I created a store for you to check out my product on Shopify, EasyWhey.


About the Author: Noah Kagan is an internet entreprenuer and the founder of AppSumo. His course, How to Make a $1,000 a Month Business, provides a blueprint and a 3000+ entrepreneur support community for starting an online business.


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