I sold my first lemonade. This is a personal story of creating (tiny) wealth and earning (tiny amount of) money on my own. The amount is not so important as is the illustrative value of the process.
Flavor of the lemonade
Not lemonade. Rather I sold tickets to an event. An event I organized. In short: 1) I had a customer in mind. 2) I used resources I had to create value from thin air to serve those customers. 3) Then, I monetized the value I created.
The value I created was a panel talk geared to educating community members. It included product managers from well-known companies like Facebook, Indiegogo, and Snapfish. It was titled What do product managers really do?
1) Customer in mind & value proposition
It starts with the customer and their needs. In this particular case, we had a strong hunch (from other validations) that people are interested in learning about product management and willing to pay to network with product managers. Bringing that to the customer would be a valuable service to them.
Demand as manifested in pricing was unclear to us, but I knew that a hypothetical customer would pay something. In this case, we priced the tickets at around $15 - 20.
Demand as manifested in headcount was also unclear. We knew that some would be interested at the above price range - just not sure exactly how many. You can see that headcount and pricing points are opposite sides of demand for the service in question.
2) Using resources to create something from nothing
As a former B-school student, I must say that this is a technique that absolutely should be discussed, yet not included in the curriculum. MBA programs should have a class called "creating something from nothing." How do you create this event? You need a venue, you need speakers, you need to market/distribute to customers. You need team hours to make all those things happen. How did we do it?
- venue - we had spoken to many startups in San Francisco in our prior work. We decided to host the event in the evening (when the work places are empty anyway) and pitched the value of exposure to prospective startups. We sold the value as a concept, and came out with several venue choices for free.
- speakers - this was all about gaining traction. Again, we knew that some people love sharing and teaching (just as we do) and are eager to connect with crowds. After 'signing' that first person, the next ones become easier. We used this technique to find four high caliber product managers, including a director-level product manager and a PM from Facebook.
- distribution/marketing to customers - in our case, this was done in the course of validating the customer needs. In particular, we built an educational meetup community centered around the product management vertical. So, we cheated on this one. And I love the fact that we cheated legal and square. That should be another MBA class: how to stack the odds in your favor to win.
Well, the three bullet points above outline a value creation for potential people interested in this sort of thing. Being the first of its type of service, we had no idea how much to charge (in retrospect, we could have benchmarked from similar events in other arenas). So we experimented. Let's price at $15 and see if we can fill the seats. Then we hustled, and over-filled. We planned for 55 people, but over 120 people signed up to go and begged us to let them in: "pleeeaaase!" Lesson learned! Next time, we should find a bigger venue or charge more.
|The lucky few who were able to get in - and were happy to pay money to do so ...
Was this bit of profiteering? No, not really? We have done other events free out of love of the work. We are involved in building a community. But time is not free. To create a sustainable enterprise, you should charge. You should charge fairly, but you should charge money. That is the clearest indication that you have indeed created wealth - that customers are willing to give you something back in return for the wealth you created.
There you have it.
"The people most likely to grasp that wealth can be created are the ones who are good at making things, the craftsmen." - Paul Graham essay: "How to Make Wealth"
And we are in the golden age of doing things that make you happy AND make you money. Have you considered writing your own book to a market that needs your knowledge and experience? Or have you wondered about the story before this story - of how I am getting started in tech in the first place?
And as much as I wish I could figure out how to make more wealth, I realized it's all about first finding a good intersection of interest (or passion) and solving a problem (or capitalizing on market inefficiency). I have learned that this is not something one can intuit or think about - you have to learn by doing, and tinker your way to the answers.
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