Cultivate the audience first, then develop the product

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Editor’s note: Many entrepreneurs will follow suit when they see something popular, but few succeed in the end. Why is this happening? Dr. Aaron Dinin used his own experience with his daughter to go to the museum to illustrate this issue. If you sum it up in one sentence, it is to cultivate the audience first, and then develop the product. The original title is: The Real Reason Nobody Is Buying Your Startup’s Product

Key points:

There are many reasons why products cannot be sold, but many entrepreneurs have a common problem. The answer to this question is the same for 90% of entrepreneurs and their new companies

The small train in the museum is a big business

But it is not the product itself that makes money. Products are things that enable the company to seize the potential market demand that it has established

One of the biggest mistakes most start-up entrepreneurs will make is to make the product before building a product audience

A founder is telling me about her entrepreneurial experience. This is the first time we met. She had been introducing her project 15 minutes before we met. Then, after she had finished all the content she wanted to explain, she asked me a question that seemed to her to be simple: “Why did no one buy my product?”

This is not the first time I have been asked this question. Other founders have asked me the same question. In fact, I am asked this question almost every week. But the way the founder asked the question was particularly shocking. This way of asking her is like asking what my favorite color is. In other words, she wants me to find out what the fundamental problem of her startup is, just as it is the most basic problem in the world.

Of course, this is definitely not a basic question. Indeed, this question may seem simple, but it is actually a ridiculous question, because every startup is different. Some may be because the product is overpriced. Some may be due to poor marketing strategies. Or marketingThe strategy was not executed correctly. Or the product quality is not good. Or the product needs to use other colors.

There are too many reasons to hinder the sale of products. If the founders themselves can’t figure out the cause, how can anyone outside the company diagnose the problem in a 30-minute meeting?

At least… I used to think so. These days, my thinking has changed. I believe “Why is my product no one bought?” The answer to this question is the same for 90% of entrepreneurs and their new companies. I was able to find this answer, thanks to my four-year-old daughter, and thanks to her obsession with riding a small train, I found the answer by accident.

Museums and Little Trains

In LimeHome is very far away Locally, there is a local children’s museum called the North Carolina Museum of Life and Science. It’s not exactly the same as Disneyland, but it’s a good place to take kids on weekends, where kids can wander around and explore many child-friendly (for example, hard to beat) exhibits. Our house often visits museums, so we generally do membership Yes, which means we never have to buy tickets to enter. We only need to go through the formalities at the front desk of the museum and walk in.

When we go to the front desk to go through the procedures, the waiter will always askDo you want to take the train? Uh, that kind of train is the kind of train you would expect to see in the local small children’s museum. Compared with Amtrak (American Railway Company), it is more like a carnivalride . The seats are very narrow and hard, and the speed is between sloths and tortoises. The entire journey takes 5 minutes to complete. You have to cross the jungle of North Carolina pine trees, so you can hardly see anything else along the way. And because the route is too short, so every time you take the train you have to loop twice. that’s it!

For parents, this is a tedious and painful journey. Of course, it means my four-year-old daughter will enjoy it. We haven’t even waited until the front desk clerk at the museum asked if we wanted toBuy train tickets< /span>, my daughters have already begun to beg for them: “Dad, let’s take the train… okay… please!”

Of course I cannot say no. The museum knows this, which is why the train ticket is not included in the annual membership. Instead, we buy tickets separately. The train ticket is not cheap, 4 dollars per person. But, given how annoying I was to ride that damn train, a $4 ticket felt more like $400.

That little train journey changed everything

On my last museum trip (in the days before the COVID outbreak, such asIf you remember what it looked like in those days), my daughter started dancing her little train dance before we even parked the car. I had no choice but to recognize it. What can I do?

It is best to solve the problem as soon as possible. I told myself this when I bought the tickets at the front desk, so we went straight to the train station after we finished the registration. As a result we arrived a bit early-the train departed every half an hour, so my daughter and I ended up in the first place. Then she said: “Dad, can we sit in front? Please—you—”

“Of course.” I shrugged. “Why not?” A few minutes later, the gate opened. Since we were going first, we ran in the direction of the locomotive, sitting right behind the conductor.

When I squeezed into the child’s seat, I noticed the back of the locomotive. The nameplate of the manufacturer was written on it: Chance Manufacturing Co., Wichita, Kansas. For some reason, I was surprised to see the manufacturer’s nameplate. Obviously, I realized that a miniature railway like the one in our local museum is not magical. Someone must have made them somewhere. However, it wasn’t until that moment that I realized the business behind the miniature railway.

Of course, companies that do micro-railway must have them. If not, there will be no miniature railway in our local museum. After all, no one will build trains for kids for free just for fun and install them in museums and amusement parks around the world. They do this because it makes money. This is a business.

The manufacturer’s nameplate on the train made me realize that this train company is a business. Once I realized the existence of this business, I began to wonder how much the museum spent to install this train. So, I took out my phone and searched for the company’s name on Google. I learned from Wikipedia that the manufacturer of the miniature railway that I was riding on charged US$200,000 for the locomotive and the charge for each carriage. It is 60,000 USD. I glanced back and found that there were carriages on the museum train, which meant that the train alone would cost nearly $400,000.

In addition to the train itself, this track must cost at least $100,000, which means that the museum spent at least $500,000 to install this miniature railway. For a small, local, non-profit museum, it is not easy to get half a million dollars. At that time, I realized that there must be a reason for them to install such an expensive train, and this reason must be related to the income that the train can generate.

In the next 10 minutes of tedious journey through the jungle, I began to count the annual income of this train. The following are my findings:

North CarolinaThe small train at the Lorraine State Museum of Life and Science can hold about 50 people, and each passenger costs $4. Every time I watch it run, the train is almost fully loaded. Let’s assume that there are 40 people on average per trip. This means that every trip can generate $160 in revenue.

The small train runs 10 times a day. This means that if you make $160 per trip, you can create about $1600 per day.

North Carolina has a temperate climate, so if bad weather is excluded, we assume that the train can run at least 200 days a year. I guess the actual number may be more than this, but 200 is a good integer, just use this as an assumption. If you run 200 days a year at $1,600 per day, your annual income is $320,000.

Deducting the maintenance cost of 70,000 US dollars and the cost of a conductor/conductor, the total annual profit of the small train can reach 250,000 US dollars.

I can’t believe this result. The little, annoying train in our local children’s museum can make at least $250,000 a year. This is really incredible! I don’t know what to think, but this made me generate in myself Backyard< /span>The impulse to build a miniature railway!

What did the little train teach us about how to sell products?

When I was sitting on a narrow rock-like bench and circling the forest at a snail-like speed, the entrepreneur in my heart began to imagine building small railways around the world and becoming a miniature railway baron. But when I just got this idea, I quickly realized why the dream of becoming a small railway millionaire could never be realized.

Yes, small railways can help local museums generate $250,000 in revenue each year, but the real money is not the trains (ie “products”). We know this, because if you, me, or anyone, buy an old farmland in a remote place and install it on the same train, you won’t make any money. The small train is a tool used by the museum to profit from its existing audience.

Have you noticed the difference? Yes, the small train is a product in name, but the reason why the small train in the local museum can make so much money is because the museum itself already has an audience and can sell train tickets to them. Thousands of visits to the museum every dayCustomer arrival Some of the tourists are willing to pay for train tickets. However, without those tourists, no one would buy tickets and the train would not make money. This is why I can’t go to the same manufacturer to buy a small train with the local museum, and then arrange the train to a place I can find in the world, and then I can sit and collect money. The product itself is not profitable. A product is something that allows a company to seize the potential market demand that it has established.

If you are running a new startup, but your product cannot be sold, the same thing may be happening to you. Maybe you are trying to promote the product, but you have not considered who the audience is or how to attract this audience. In other words, you made the biggest mistake that most new entrepreneurs make: build the product before building a product audience.

In a sense, it’s like seeing a small railway in a local museum, figuring out how much it can make, and then deciding to build your own small railway on the old farmland in the wilderness. Of course you won’t make money by doing this! You have no customers who can sell tickets!

I often see inexperienced entrepreneurs making such mistakes. When they see that other people’s products are very popular, they mistakenly believe that the product itself is the valuable thing that can make the company money. But the product is not your business. The product is just one reason you use to make your audience pay for it. Therefore, the product has nothing to do with attracting an audience. As long as you have an audience, you can come up with a variety of good products to sell.

To illustrate why having an audience is more important than owning a product, we might as well return to our local museum again. In addition to the little train that bothers me immensely, it also has a gift shop that you have to pass by as long as you leave. Guess my daughterEvery time I go out and pass the gift shop, I have to say something: “Dad…Can I buy something? Please—you—!!!!!!”

Translator: boxi.