the+foundation+ebook

Learn

by JON BLAZQUEZ© 2015 The Foundation. All Rights Reserved.

METHOD

5Minutes4 (Or Less)in

How thousands of people all over the world are creating freedom in their lives and value in the world

through entrepreneurship in 2015

https://thefoundation.com/


I’m Jon Blázquez, I’ve written this book to understand deeper The Foundation and evaluate if it was worth joining. As you may know, I finally joined. I decided to start melding all this knowledge shared by these incredible persons in a clear, understandable manner.

The text is the output of a process in which I’ve read, listened, digested, understood, sorted, connected and finally boiled-down to the essence what have been said by Carl, Dane, Andy, Sam, Josh, Esther, and some experience on myself.

The illustrations are made by me and inspired by the style of the great Mike Rohde, who is a designer, Sketchnoter, illustrator and author of The Sketchnote Handbook.

As I say several times in the book, it’s not a substitute of joining The Foundation. It couldn’t. The Foundation is an experience, a new language, the content is so powerful and its community is irreplaceable. The aim of the book is to explain in 45 minutes (or less) the big picture of The Foundation and to illustrate it giving some concrete examples, numbers, stories, tactics and details based on my own experience and the experience shared publicly by Dane, Carl, Andy, Sam, Josh, Esther in sites like SPI, Mixergy, The Foundation’s blog or Carl Mattiola’s blog.

The information contained in this ebook is for informational purposes only. The material in this guide includes information by third parties so I don’t assume responsibility or guarantee of this information.

Learn The Foundation Process

PREFACE

�2 © 2015 The Foundation. All Rights Reserved.


CLICK HERE and Apply To Become A Member Of The Foundation

https://thefoundation.com/apply







INDEX

INTRO: WHAT IS THE FOUNDATION?

PHASE ONE – THE MINDSET OF ENTREPRENEURSHIP

PHASE TWO - IDEA EXTRACTION: Find Market, Contact Market and Find Problem/PAIN

PHASE THREE - SKETCHING THE SOLUTION IN A WEEK Think Solution, Sketch it, Contact Market and Validate Solution

PHASE FOUR - PRE-SELLING: Creating The Info Pack or Marketing Website and Pre-Sell Your Product to Fund your Project

PHASE FIVE - BUILD THE PRODUCT IN 10-12 WEEKS

PHASE SIX - LAUNCH & SCALE

OUTRO

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No. This book goes through the process and describes it, giving some examples and specific recipes. It is based on my own research and tips on the theme and the resources available on the Internet, such as: interviews and blog posts from the founders and students. All of them in order, boiled-down to the essence and put into context.

Does this book show me how to do it?

Learn The Foundation Process 5Minutes4 (Or Less)in

INTRO: What is the Foundation?


The Foundation is the six month mentoring program for entrepreneurs who want to start and scale a software business, from scratch, as quickly as possible.

To learn it, you have to experience it, because it is like a new language. In words of Dane Maxwell:

It's not, not having the information, I'll tell you that. It's not, not having the how to’s. I feel like I've cracked the code on creating successful entrepreneurs. I work— every single day we're doing an hour of phone call Q&A, direct access to me, because what I've found is that people just get stuck a LOT.

And they have a really specific issue that's really pertinent to just them, and they need personal help with that, so they come on those calls and they ask, and there’s a secret language of millionaires, if you will.

Just like any foreign language, you can't learn it in a day. If you hear it, it's likely going to go over your head. That secret language is direct response marketing. You couple that with the whole concept of idea extraction and finding the pain, and then you couple that with selling a product that doesn't exist and using that to fund--there's this whole language to it. You really just can't buy a book and learn this; it's got to be an experience.



Here is the Summary: Find a market that you love that’s big enough. Make sure people are accustomed to paying, then start to make calls to that market (via mail, Facebook, phone, LinkedIn, etc…). When you talk to them, look for their problems or pains in that market.

Sometimes you just let them ramble until you hit on a pain. Find a pain that’s consistent, that several people have had. You come back, after you’ve found several and then you look for the one that’s the most painful, and you go back to the people that expressed it. And you ask: “is this what you’re feeling?”. Then you say: “I think I can solve it. If I solve it with this, would you be willing to pay?”. Then you send them a mock-up with that solution and you say: “if I build this, will you pay? And in fact, if you pay, here are the different levels that you can pay at”. You can fund your product doing using a method called pre-selling. Then you can build the product, outsourcing it, with the minimal set of features. Finally you can scale it.

So, it's very easy to get, say, 100 people at $100 a month and make $120,000 a year just servicing those 100 people with your software. It's a lot easier to build than you'd think. Start from scratch, even before having an idea, find the market, analyze it, find out exactly what this market needs and get paying customers for this idea even before it is built. Complete validation before spending more time and effort on it.

The Foundation process is based on 6 phases or steps.



The 6 phases are:

1. The mindset 2. Idea extraction: find a market, contact and find a pain worth solving. 3. Sketch the solution and validate it 4. Pre-sell the solution to fund your project. 5. Build the solution with indispensable features (notice that building the product is in Phase 5, where most entrepreneurs think it is Phase 1) 6. Launch and Scale






Because when people think they need an idea, or money or credibility or to be an expert, it’s typically a lot of internal stories and internal dialogues going on inside their body. Imagine this dialog moving from their chest to their heart to their throat to their stomach. That’s actually where most of their beliefs and fears are locked. And when we move that energy in the body, the person gets better.

A lot of people get stuck because they're very me-focused. "What's my passion? What are my interests? What are my skills?" Get away from you and completely shift to what the pain of the customer is and become passionate about improving their life. That's where a lot of freedom can open up. Shift your passion to just improving people's lives. Think with a virgin brain and find a problem that causes a great pain to your customers, define it, understand it deeply and make software to help your customers.

You will learn about solutions that people would be willing to pay for, if you just ask and take action. That's really what it's all about. Usually, we are afraid of letting other people see us fail. So we hide our projects our attempts at entrepreneurship. Once you get over that, you can move forward uninhibited.


PHASE ONE: The Mindset of Entrepreneurship

Now that the intention is set and aligned, you can dive into your first few questions to get the ball rolling.


That means it's something worth doing, something that might take your business and your life to the next level. Appreciate the small winds along the way. There are always days that you have a super high: things are going great and you talk to a new customer, potential customer who could be awesome, or somebody gives you a great idea.

Welcome and embrace the fear!

1





Then you talk to another person who is totally negative and down and tells you you're never going to come up with anything because there's tons of software out there already. That's going to happen, and it puts you in a bad mood for the entire day, it can, until you learn to control it.

What stops people from realizing goals is their limiting beliefs about themselves. People are not actually only afraid of failure, they're very afraid of success. For them to become instantly successful within six months and going through the program shines a light on them. All of their family members and friends are like “oh my gosh, this guy is so successful now.”

There are people who sabotage their own success, normally it is because of a limiting belief: "I'm not good enough unless I've achieved something". We feel like we are always in control of what's going on when we don't even know what's going on in our heads sometimes. If you've got a limiting belief, you've got something you're stuck with, you've got a road block and you're not going to be successful until you get that thing reversed. Unless you have a kind enough, compassionate enough, gentle enough teacher that —without judgment— will help you reverse that, you're not going to move forward.

If you think that you need an idea to start a business, if you think that you need money or you think that you need to be an expert, you are wrong. Those are all lies, all three are limiting beliefs that are keeping you from joy and happiness.

The six months of The Foundation are more or less like this: Month 1 - you find the pain in a market. Month 2 - you validate and try to sell it. Month 3 - you hire the team and put the place in to build that software and get the sales to fund development. Month 4 - you start building a list of people that are interested in the software. Month 5 - you build a relationship and a rapport with that list while the software is being developed. and Month 6 - you start charging users and observe.

Each one of those months, people get stuck. Every single month they get stuck! They just need access to people that can help see what they can't see so that they can become unstuck. They need that personal level of attention.




PHASE TWO: Idea Extraction

Find Market, Contact Market and Find a Problem / Pain

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The most dangerous word in business is guessing. The strategy is to find the pain and solve it. That is the key. The tactics to do that can be different. To avoid guessing and building something that it is not needed, we can pick a market with a virgin baby brain, talk with them and find the pain.

Life’s too short to build something nobody wants. —Ash Maurya

To simplify our process and increase the chances of success, there are a few principles we can operate on. We want automated sale, we want reoccurring revenue, we want no accounts receivable, and we want to sell tools to markets. Finally, one of the things is that the client does NOT have to change their behavior all that much when they sign up.

We do not believe in being an expert. We believe in being an expert at defining problems and then putting experts in place to solve them. There's a very freeing space that opens up once you stop trying to be the expert. You do need to be an expert at one thing. You have to be an expert at the problem.

You have to understand the problem better than the customer, better than the competition, and better than anybody else on your team. That's what keeps you the leader, because you direct the team with the vision. You understand the problem so well.

That's why we say these opportunities are available everywhere. Solutions are available, but custom-made solutions are what people want, because it just makes their life easier. And you have to make sure you show it to them.






Find the Market

You can do it in two ways: You can search lots of industries and then filter some of them with some patrons or you can start with a small list of industries that you like and then prioritize them. Option one takes more time but it open your eyes more than option two.

You can find structured information about markets in Google, market’s list and how big they are. You can use for example Research Industry Profiles, IbisWorld Industry Reports, sbdcnet.org and Hoovers.com. And also this video how you can estimate a market size on Facebook in 2 minutes

The next step is filtering your choices to find “a green light market”:

Phase A - Search for a Market and a Niche

1. It must be big enough to serve you: Filter the industries with 5,000 or 10,000 businesses or less for example.

2. The industries must be profit driven and want to save time (you can score them from 1 to 4): think about which businesses want to grow and make money and which ones care less about that.

Companies or small businesses (example: lawyers) would not be the best company to idea extract on. They actually want to spend more time, because they charge hourly for clients. So if you’re going to idea extract to try and to try to find time for the pains and save them time somewhere, that might not work out the best.

3. Is the industry growing or not? Find out if they are hiring (for example indeed.com)

4. Look for industries that interest you and allow you to communicate well with the client. Look for industries that you like and involve persons you like. You can put it in a spreadsheet.



https://www.youtube.com/watch?v=FGvuzIh_Q3s

https://www.youtube.com/watch?v=FGvuzIh_Q3s



Phase B - Once you have about 10 possible markets, you will need to narrow down your options:

1. Choose the market in which you are more confident. You are going to have to talk with the people in that market.

2. They must use internet, email and software (Search in Google “market name + software”). They must use monthly paid software.

3. Make sure that they are making at least enough money to pay for software, for example $100,000 in revenue per year. Check out Bizben: business for sale and what money they make.

4. A franchise can give you lots of information. Give them a call to open one: How big is the market? Who are your competitors? How much does the average franchise make? Do you provide software? You will get very good information.

5. How hard is it to get to the decision maker? Pick a market in which you can have the decision maker on phone. (For example, dentists are tough to reach. You get receptionists and they’re always working on their clients. And they get sold to all the time.). Its better to choose businesses where the owner answers the phone.

6. Research the market in Google trends.

7. The most important tip: Which industries do you believe in? Which ones would you love to help? Which ones would you be happy to talk to every single day? Always try and do something that you may have a little bit of advantage in already.



http://www.bizben.com/


http://www.bizben.com/



CONTACT THE MARKET - There’s no better way to find out exactly what a target market needs than to ask them. There's software out there that can do whatever already, but when you build something specifically and with the input from your target market, it's going to be exactly what they need. That’s why contacting your market and finding the pain is so important.

Our limiting beliefs will say that we will be perceived as sleazy salesmen on the phone, but if you try to help your contact, you will surprise them and reverse your own limiting belief.

As Carl Mattiola says:



Phase C - Once you have reduced your list to 2 or 3 markets, call them and choose the one you connect best with.

And I did this in 2 hours a day and in the beginning I was so nervous that I didn’t want to make a phone call, I was scared that the whole thing was a scam. I was sick to my stomach and I wasn't sleeping and learning to get over that stuff….yeah, really helped.

I felt like people perceived me as a sleazy sales guy on the phone, which was totally not true, especially if you're trying to help people, you know, they're--they look at is as like, it's awesome, you're there to try to help them and they get to rant to you about their problems and you're listening! And they really like to be listened to and understood. Everybody does.

Contact them without fear. Don’t wait to have a domain, email signature or logo. You do not need these things.

We can contact our market by mail, by phone, by Facebook or LinkedIn groups. It all depends on the market. Once you contact them the first time, then, normally you would have to get a conversation with them in order to find their pain. Use this first contact to get bigger interaction with them.



Let's just say San Diego real estate companies. Go to get the top ten Google results, go to each one of them. Find the broker / owner on the roster and find the office manager and/or their assistant. Email all of them individually.

You can also try some emails in markets you don’t mind testing and build confidence. Emails written by women get more responses. Consider it, use oDesk to hire a person overseas to gather the emails and then a few websites. You can hire someone from oDesk for around two bucks an hour that would actually go on manta.com and basically get lists of companies within your desired industry. They would get their email address, their name, their company name, and everything and go from there.

The site manta.com is just a list of businesses that you can segment via industry. You could select any industry you want in different regions, and generate results from all over the world. It also gives you a market too, so, for example, you can discover that there is around 18,000 security patrol businesses in the US and over 108,000 in the world.



How do I get their contact info?

FIRST CONTACT - Once you have hundreds of contacts, contact them initially saying you want to study which are the biggest problems in that industry. Just a small message. Then, from the people who answer, you will need to get them onto a long phone, video or physical conversation in which you will do idea extraction properly and find the pain. With some of these conversations done, you must find a common pain which needs to be solved. Think about the solution and validate. Are the ones who have this pain willing to pay for a solution?

If you use email, the recommended way is to send individually the first email. You can also use something like Toutapp to do mass emailing. Remember that you are contacting them to help them, not spamming.

There are several ways. You can make a list of persons with Google. Start with your country or city : Search “niche + profession + city”.

http://www1.toutapp.com






In the first email, it is normal to get few responses. Sam Ovens got a 25% response rate from the first email, which is high. A 15-20% response rate is also ok. It depends on several variables: the industry, the subject (“Strange Question” works well), if you are a man or a woman, the hour of the day, etc… You can split test several of variables. It must be a simple email with a few lines.

Here we have Dane’s example:

Hey, we're doing some research on the real estate software market. Just curious--is there any software that you've been looking for over the last few years that you're having trouble finding?

Thanks, can't wait to hear back from you.

Here is an example of the email written by Sam Ovens:

EMAIL 1 To Cold List Of 100 Prospects In An Industry

Subject: Strange Question? Hi (NAME), My name is (YOUR NAME) and I am currently doing research on making property management more fun, productive and profitable.

As a (JOB TITLE) what are the biggest problems you face on a day-to-day basis? This is not spam and I am not going to try and sell you anything, I would just like to learn about the pain points you experience in your profession. I would love to hear back from you, even if it is only one sentence!

Kind Regards, (YOUR FULL NAME) (YOUR MOBILE NUMBER) (YOUR LINKEDIN OR FACEBOOK LINK) (YOUR EMAIL ADDRESS)




In the first email’s responses they will only give you some clues or superficial problems. Basically what they have in their head just now. You have to wait and go deeper, find some recurrent problem. It doesn’t matter if they already use software to solve this problem. It is possible they don’t like it or you can substitute it. Focus on the problem, not the solution.

SECOND CONTACT - The answer does not matter much, but now is when you take the opportunity to schedule a phone call. You can contact the people who have answered your first email and agree to call them when is ok for them. You CANNOT continue to do this over an email. If you try to do it over email, you're not going to do this well. You've got to get on the phone/video/skype/meet.me. You need to connect with them emotionally. They have to feel that someone is listening their problems.

Sam Ovens was able to call 12 of 25 persons (50%), however, setting up calls for 20% of the people who answer the first email is ok.

Here is an example of the second email Sam sent to people who responded:


EMAIL 2 To People Who Respond To First Email (Don’t Bulk Email, Write Each One Personally).

Subject: RE: Strange Question (Just Reply To Their Message) Hi (NAME), Thank you for getting back to me. You sound very knowledgeable in your industry. Can I give you a call to ask you a few more questions? Please reply back with a time and number that suits and I’ll call you.

Thanks in advance. (YOUR FULL NAME) (YOUR MOBILE NUMBER) (YOUR LINKEDIN OR FACEBOOK LINK) (YOUR EMAIL ADDRESS)




People get a little deeper when you get them on the phone, however it is a lot harder to get people on the phone. There’s a give and take there, you probably need to send more emails to get some people to respond. It is very important to get that contact on the phone. You could ask questions to people in your target market via email, however, you’ll only get the surface level answers. When you are having a phone conversation and you ask these questions, you can go deeper. You can find out more. 5, 6, 7, 8 levels of deep within the one single seed question, and that's where the gold comes out.

You can send emails to get them on the phone or you can do it a little bit more sophisticated. When you use something like Toutapp or email marketing software, you can see which people open and click your emails. Usually there are few people who would actually respond (15-20%). Those are really awesome people, so you want to call them right away. You can follow up on all the opens and clicks as well. You can be alerted when someone opens your email. It is also recommended to include a Linked-In profile within the email. You can start calling the ones who responded to the email, then all the clicks, and then the opens.


A common fear is actually picking up that phone and having people responsive to you. People are very responsive when you call them the right way. If you call them to just try to sell them something, they’re not going to respond to you. When you call them just being honest and open and tell them what you’re doing, it’s really, really easy to have a conversation and people are very open to talking.

Although we all have fear, it's not that hard, you pick up the phone and say “Hey, we were talking over email, and you told me that you've been looking for XXXX software, what are some of the solutions you've been looking for? What about them is it that you don't like?" and then you just start asking anything you can to try to understand that problem. If you're just curious, the questions will come to you. If your contacts know exactly what they want, it is awesome, it is pure gold.

Conversation - Find the problem / pain






The main principles to follow when you call someone is : First, telling them why you’re calling, and then giving them value. If you can do those two things when you call someone it’s not a sales call any more, it’s just helping them. Those are the main things that work when you begin a process like this.

You can also push for one or more of the idea extraction phone calls to meet with you in person. If you see people face to face, you can see their body language and actually connect with them a bit more. And it’s really hard to do that on the phone. Doing phone calls is fine, and it is something that you need to do, especially when you’re calling out of state or out of province. But anytime that it’s possible, meet someone in person. You can connect more with them and actually sell. And it’s easier to usually find their pain and actually offer the solution to them. When you meet them in person it is also easier to pre-sell.

You can sit down and go over their problems, just get them talking about what is challenging for them. And then you can ask them if they could wave a magic wand, what would they want as a solution to this?

The goal is to know the problem deeply:


If you can define the problem better than your target customer, then they will assume you have the solution. Yes. You won't really need to make them understand it, because they'll beg you. If you've dug and found the pain well enough, they will be pissed at you if you don't! If you've dug deep enough and you've found the pain, customers will be pissed if you don't give them it.

It's not like you actually even have to talk them into it. I don't have to prospect; they come to me, because I've found a deep enough pain.”

—Dane Maxwell



Carl Mattiola explains it with an example:


What kinds of questions would you ask?The idea is to try to start broad, to just to ask them questions like "Tell me about what you do day to day and what are the challenges that you have in your business day to day?" When you talk about that and you hear one, go further and ask more questions about that challenge.

Hi, my name's Carl, I'm a software entrepreneur, and I'm doing research on the physical therapy practice industry in hopes of finding the biggest problems in order to hopefully create a product that can solve them for you, and I'd just like to ask you a few questions about your day and the biggest challenges that you have in your business right now.

And then he continues the conversation:

An example would be, this one doesn't have to do with my product so I'll use it, they once would tell me "I have to take all this documentation for each patient and it sucks" and then you might ask "What kinds of documentation do you have to take? And how does that work? How often are you doing it? How much time does it take you each day?" And you start to drill in and figure things and map out a process.

—Carl Mattiola

Also you can see how Sam Ovens did it… (next page)





You can see here some of the questions you could ask. You don’t have to ask all of them. Start broad with one and then dig. Use another one if you get stuck. The silence is a good thing also because makes them think. Also ask : What else? Tell me more? And wait. You keep asking those questions until they can't think of anything else, and it's usually that fourth or fifth response (a layer 4 or 5 idea) where the golden, most painful idea will come out that you can start really defining accurately.

Another Tip - Ask: So how often does this happen? How much time does it take you each day? Always try to help people get specific.

Phone Script for Call (Do Not Need To Follow Exactly – Just An Outline)

“Hi (NAME) this is (YOUR NAME) calling, how are you? Awesome. Hey thanks so much for your reply with the painful problems you’re currently facing – that was very insightful. I just want to ask a few more questions so I can get a better idea of what you do on a day-to-day basis and what’s most painful for you.” ASK Any of these questions to get an idea of a problem. Once you have a problem, keep probing and dig deeper. You don’t need to ask every question: Can you walk me through a typical day for you? What’s the most painful task you have day-to-day? What takes up most of your time? What are you currently doing that frustrates you? What tasks are you doing that you believe can be made easier or less tedious? (You get the point…. You can make up your own questions here). “

—Sam Ovens.





• What's the most important area of your business? And do you have any pain associated with this activity?

• Is there any pain associated with that particular activity? What else?

• What software have you been looking for but you just can't find a good solution?

• What are some of the repetitive tasks that you have to do on a day to day basis?

• What’s the most painful task you have day-to-day?

• Who's responsible for those tasks?

• How do you feel when you have to do those tasks?

• If you could wave a magic wand related to that task, what would happen as a result?

• What are the tasks that you do that take up the most time?

• What problems are costing you the most money?

• What current software out there have you been looking for, but can't find a good solution?

• Have you ever tried to solve this problem in the past?” Try to know how much did they invested trying to solve the problem.

• What problem costs you the most money?

• What are some of the software programs that you use that make you want to punch your computer?

• What are you currently doing that frustrates you?

• Can you walk me through a typical day for you?

• What tasks are you doing that you believe can be made easier or less tedious?

Some possible questions





To know the businessEvery business can be broken down into three areas. Before the sale, during the sale, and after the sale. So there are all the tasks that happen before sale, all the tasks that happen during a sale, and all the tasks that happen after a sale.

If you're going into a market that you have no idea about and you're not even sure what questions to ask and you want to understand it, you'd say "Hey, let's just break this down"

"Hey, tell me about all of the things that you do before the sale. What are some of the things that like--if you meet a customer--" all this stuff. "Well, we enter them into the database, we enter them into Facebook, we add them to this." Whatever it is! "Okay, during the sale, what are all of the things going on?" And you get this list of things. "After the sale, what are all of the things going on?" You get all of this information.

And then within those three areas, you will find what we call a layer 4 or 5 idea that's very focused on solving a specific problem within that niche.

When you ask people what kind of software they want, almost all of them are always going to inevitably say "I want an all-in-one solution." You do not want to build an all-in-one solution. Not only do they not want an all-in-one solution, if you actually built it for them, they probably wouldn't buy it and implement it because it takes way too much to implement. Their entire business has to change in order for them to start using this software product.

The most important point is that you don't actually go through the entire list of questions when you talk to people. Dig after you get the initial answer. So what else,?… and tell me more… That is where you will find the gold.





Give more than you getIt is important to make them think. Give them time. In 10 or 15 minutes you can go through three or four problems. Try to help them with other things that you have learned in previous conversations or that you just know. Try to give more than you are taking from them every single time. See if a pattern emerges.

Usually with less than 10 conversations some pattern emerges. Continue until you understand deeply the problem. Repeat them their problem to make sure you understand the problems and to show that you listen to them. They will appreciate. Then ask them which problem is the worst if you have to choose one? Finally, take the problem which causes the most pain and is easier to solve. Also consider that it has to bring you enough revenue.

Carl Mattiola found 8 problems from 32 phone calls (Duration: 1 hour each call) and as he says:

After diving deep: 5, 6, 7 questions deep after asking the initial one to really understand what would benefit or what would be the solution or what would be perfect to serve this audience, then you go out and build it and this is a software and the idea behind software, it's great because you can have customers that pay a reoccurring fee every month, and the more customers you get, the more income you're going to have month after month.”

It’s not the solution, it’s the problemAs soon as you have it defined so accurately and clearly, the solution just comes to you subconsciously. The subconscious is so powerful it'll tell you the solution when you're defining a problem.





The good thing is that if you find a solution with, for example, an iPad app, if the iPad app bombs, the idea is not dead. The idea is not married to the solution of the iPad app. You understand the problem so well that you can probably shift to something else to solve that problem in another way. So when you define the problem, you're not locked into your solution. Versus what happens when, someone comes up with their own idea, they try to sell it, they find nobody wants it. They get married to the solution, they fall in love with the solution and they try to tweak this, tweak that, maybe if we tweak that... They're so married to the solution and completely disconnected from the problem they're actually solving.

Connect to hundredsSo remember: You have to send the first mail to enough people to have some responses. Think about between 100 and 400 contacts. From that, they will answer you 10 to 20% and you will be able to set a phone call to another 10 to 20%.

You will need 10 phone calls or more to find a pain. Something like 30 is a good number because you will like to convert these persons into your 5 to 10 first pre-selling customers.








PHASE THREE: Sketching the Solution in a Week

Think Solution, Sketch it, Contact Market and Validate the Solution

3

Once you have selected the pain-worthy solving (the solution will arise from your subconscious). Think how to solve it with software. Make a diagram in paper or in the computer and show it to the people who had the problem. Find out what they think. Don’t make it too complex. Start sketching the solution with a notepad or a computer. Keynotopia is a great tool for a more professional look. The Minimal Viable Product is a keynote or PowerPoint presentation.

Show your contacts how solving their pain can bring them greater benefits than they may have realized. Involve them in the process of designing and creating the application. Reach them by mail or by phone, or screen-share with GoToMeeting/join.me/Skype or in person. Listen to the feedback and reiterate the solution. That is the key. Then make a working (clickable) demo prototype, with Keynotopia.

How to say noPerhaps you cannot implement all the features that the client asks you for. Filter them and build only the basic ones that solve the pain being addressed. Cut down your Keynotopia to a few slides. Ten will do the work.

Strip away features within the software to the point where it makes you nervous. You may question, ”can I really get away with launching with this little…?" Take away — don’t build the whole thing out the way everyone described at first. Start by getting it to the point where it's usable and people can get some benefit from it.


http://keynotopia.com

http://join.me/Skype






http://join.me/Skype




Picture 20 features listed out. Since you're talking on the phone, you talk to the person like: "Hey, we're thinking about cutting this feature, would you sign up for the product if we cut this feature for the first version?" "Yeah, I’d still sign up." "Cool." Cut it out from the first version, put it in version 2.

And it's so easy to do because of the reoccurring revenue coming in every month, simply dedicate 20% of the budget to development and then let your customers fund the evolution of your software.

You’re going to have say no quite a bit, because you can’t do everything. You’re also going to have to say no to people who paid you and believed in you. You can say that’s “under review”. I personally find that it’s about building trust and a relationship. When a customer asks, “can it do this?” Saying no can often build more trust. The truth is, your clients may not actually want everything they are asking for. They’re just speaking their mind. Being honest and unafraid to say no will build trust.

Presenting the sketchThis is how Carl Mattiola did it:

So I used paper to sketch it and then Keynotopia wired frame, and reviewed it with the people who said they wanted it. I basically showed it to them and iterated it maybe 2-3 times and then when I was ready I put together an information pack that had some screenshots based on wireframes I put together, and it really defined the problem and how the problem was going to be solved, and all the benefits the user would get and made an offer, and so from there I pre-sold the product using that information pack and using an applicable demo that I made with the wireframes to these people to prove that it was a worthy idea. So you can sell it in advance.





Presenting the sketch (continued)This is how Carl Mattiola did it:

What I asked for was what it would cost them for 3 months to pay me in advance for the product, and what I said was once I got 3, that would be enough for me to feel comfortable moving forward. So I did that.

In the info pack there's a process--there's a diagrammed process of the old flow that they used to have to go through in there that's still, when I show that to people makes them cringe and that's what sells the product.”

Don’t be afraid of other solutions to your problem (CRM market for example). You are listening to the market and that makes you different.

It is like Lean Startup mentality. Launch a product and get the feedback on it, and be prepared to get some backlash, but also be prepared to hear what’s good about it, too. That way you can develop and you’re a bit more agile.








PHASE FOUR: Pre-sellingCreating an Info Pack or Marketing Website. Pre-Sell Your Product to Fund Your Project.

4

You must pre-sell to 5, 15, 20 or 50 customers before you build a product. It depends how much you need and how much are you going to charge. You need to estimate your cost and how much profit you would like to make before you can establish your customer’s price.

Money is the validator. You can do everything right, but if you don’t have the guts to ask for the money, it won’t work. “I would pay” is nothing.

How to pre-sellFirst you will need to establish value by expelling all of the benefits. This process is know as Price Anchoring. Show them what the return on investment could be. Your objective is to pre-sell by offering a price discount and influence over the product.

For example: They pay three months up front for the software, they got 10% off for life of the fees. And access to the beta program and to give you input as you develop it, and that whole beta program would be free for them”.

You can go to a software development enterprise with the software’s specification to get a quote. You could also use their proposal as inspiration for your own.

You can create a little “Kickstarter” program and insert a slide into your info pack. You can offer some benefits to pay in advance (three months, six months, yearly, forever?, life discount, promise that you won’t change the prices or life-support ). You must tell them that they are going to be like the founders. Make them to feel the project as their baby too.





You can say: “We’re not going to build it unless we have people that buy into it before. And you are the first person”. So if you want this bad enough, we need the first person to say yes and our offer is to pre-pay, for example, three months of the software up front. And you’d be the first person to say: “ hey, I want this, and come in on the beta.”

You don’t need a payment system. An account number is enough. Carl tells us how to show the benefits. He got 50% of the people talked with this script:


What I’ll give you in return for that[paying in advance] is 20% off that price for life, and I won't change the prices on you. You'll get to work with me and dictate features as we go. You'll get support. You can call my cellphone whenever you want, and I will personally help you implement this into your business. In exchange, the catch is that it's not going to be ready until May, and in the end I'll want to use you as a testimonial.

Dane show us how to do the math and present a return on investment:

So if we helped recruit one new agent a year, that would be worth $10,000 to you?" They're like "Yeah!" I was like "Great, so how does $200 a month sound? $2400 a year?" "Pfft, no, that's great. One agent and we've 5x our return." Now I'm selling a WordPress platform that most people use for free for $200 to real estate companies because I understood and could clearly define the problem better than anyone else.”

The goal is to get multiple paying customers before the product exists. You have guaranteed paying customers. There is virtually no chance of failing because you have a paying customer before launch. The concept generates the funding for development.




How can I charge for something that is not already built?Number one, you must believe that you have the integrity to fulfill what you’re saying you’re going to fulfill. So if you get money for something and you’ve told them you’re going to build this you’ve got to field that, and you’ve got to believe that you’re going to provide that.

Another way to take the pressure off you and off your client is an agreement for a full or partial refund in the case that the project does not succeed in development or in reaching its funding goals. Having integrity is key.



Learn Pre-Selling from the Pros






PHASE FIVE: BuildBuild the Product in 10-12 Weeks

5

After achieving some pre-sales ($10.000, $15,000 or $50,000) it's time to build the product. You must outsource it in order to continue pre-selling it and growing up your audience. You must try to sell the product to other people who have not been involved in the process. Call explaining the benefits. Inform the contact that the software is in beta development and that if they purchase now, they will get 10% off. There will always be some objections, but some will buy regardless. In this phase you must also start building a website.

In words of Dane Maxwell: “If you build a product in The Foundation before you’ve pre-sold it or you’re caught writing code because if you’re a developer, we don’t let you code inside The Foundation. You have to hire it out. There’s no way you’re going to write your own code, that’s not how a business owner thinks. If you’re caught building a product, before you even pre-sell, we kick you out of The Foundation. We don’t let you sabotage yourself.”

You must simplify it in order to build it up from 8 to 12 weeks. That will cost roughly $12,000 to $20,000. The more you pre-sell, the less money of your own needs to be spent.

You can pay a programmer or you can save money on development by hiring a programmer and giving him equity. A programmer's not going to give you equity unless they believe in the product, unless they see the revenue potential. Here’s what happens: when you recruit a developer, the more experience they have, the more likely they are to take equity. This is not always the case. But really good developers are keen on equity.





How to find a good developerYou can hire a programmer in Odesk, eLance, vWorker, find someone locally or send a proposal to India

• Normally you pay $600 to $800 a month for a programmer

• Ask for a good language (python, ruby).

• Write a good job description

• Include mockups

• Filter the programmers (independents are better than agencies)

• You can ask to put a word in the application or “If you are human, put “human!” in the application”. With this you know they have read the job description

• You can do some test programs and revise them. Pay them $30 to do a test program.

• The communication with the programmer must be good





PHASE SIX: Launch & Scale5

Ok, so you’ve launched the product and you have some paying customers. However, you need more new customers to continue development and be profitable.

You have to keep in mind and monitor the retention rate (drop off). It is true that the lifetime value of a membership website versus software — from a quantified perspective— is usually something like 10x - 50x higher.

You can use AdWords once you have revenue or continue using email to get new customers. You can Google-search top cities and then buy lists of email addresses. This is a little on the sketchy-side, but what you can do is to send an email with such tremendous value that you would get barely any spam complaints. So you might get that list of 3,000, and you might find the very best tip that you could ever give, to this industry and related to the pain your product solves. Then you would cold email them. For example: "Recruiting tip to recruit an agent. Hey, if you’ve been looking to recruit agents, try and do this XYZ thing on Facebook to agents, and you might recruit them. Hope this helps, signed Dane. P.S. If you have any agents in recruiting agents using the Internet, check this out."

You can go to meet-up groups to be where your customers are. You can use your website, which can get leads from Facebook and Twitter. So it’s basically ground and pounding the first 100 customers. It's all about going to where the customers are.








OUTRO: This is the RecipeIf you want to start something, be open to listening to what the challenges are and the pains that are presented to you. And when you find something and you hear a pain, jump on it.

And those are the main principles I followed these, and I think they can be replicated. Can they be replicated exactly? It’s going to take different forms. The process of just being open to solving people’s problems, no matter how they’re presented, that’s what you can replicate.

To succeed you must know why you are doing this. Know your mission, have integrity, have a good mindset and focus (no distractions).

You CANNOT accomplish this with only the help of this book. You must experiment with it in the Foundation. As I mentioned before, it is like learning a new language.

This book: Integrity: The Courage to Meet the Demands of Reality just goes to this model of leadership and how to be a leader in your organization and with customers. I think that doing the pre-selling model, integrity and trust are a huge thing. You can’t pre-sell people if you’re a sales-type person. You must have integrity to do it. It is key if you’re going to embark on this journey.







I’I hope you’ve enjoyed this eBook as much as I loved writing it. I can’t thank enough The Foundation’s founders and members for their continued support and shared advice..

I appreciate each and every one of you taking time out of your day or evening to read this, and if you have an extra second, I would love to hear what you think about it.

Please leave a comment at The Foundation Community, or if you’d rather reach me in private, don’t hesitate to shoot me an email.

Thanks again and I wish you nothing less than success! —Jon

[email protected]


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