How Veterans Can Rapidly Turn An Idea Into A Business | HSLD Podcast Content

How to Turn An Idea Into a BusinessThis post is based on the podcast – How Veterans Can Rapidly Turn An Idea Into A Business.

Welcome to High Speed Low Drag, the podcast for veterans and soldiers transitioning into the civilian world.

War veteran John Lee Dumas interviews other veterans who are crushing both business and life, revealing the path they took to achieve outstanding success. Veterans, are you prepared to ignite?

John: Veterans, are you interested in owning your own business?

Join me, Antonio Centeno and Tom Morkes, all successful entrepreneurs and veterans, as we talk about what it takes to build your own business from scratch by leveraging the skills you developed while serving your country. And you’ll have the support of a community of veterans that are committed to helping you succeed.

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Tom: Hey, everyone, Tom Morkes here alongside Antonio Centeno, co-host of High Speed Low Drag podcast. Now, we want to welcome you back to another episode. Antonio, how is it going?

Antonio: It’s going great, Tom. And I’d like to point out that we’re actually not right next to each other. We’re on opposites or different areas of the country.

Tom: Yeah, I’m in Indianapolis right now, sunny Indianapolis.

Antonio: I didn’t realize you were that close. You’re in the Midwest as well.

Tom: I am in the Midwest right now. I’ll be headed to Michigan next week.

Antonio: Where in Michigan are you headed?

Tom: West Michigan. Well, I call it the west coast. So, in Holland, Michigan, on Lake Michigan.

Antonio: Very cool.

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Tom: Yeah. Well, that’s very interesting and fascinating for both of us. But today, we want to focus on a particular question that was asked from our mastermind group and it was on how to launch a product and then once the product has launched, how to scale it. So, the question is concerning how do you actually get maybe something that might be considered a minimal viable product out the door and how do you know when to ramp up production and take it to the next level in terms of maybe style or in terms of content, things like that. Antonio, do you want to go ahead and take it away?

Antonio: Yeah. I’ll just share my personal example of how you test the market, how you really, I mean — And I’ve got a background MBA from the University of Texas, yada, yada, yada. What they would tell us, and I remember in business school, is let’s do the market research. Let’s spend a year, let’s spend $50,000 to $100,000 and let’s dive in. Let’s do the analytics. Let’s bring groups of people together and ask them how they feel about this product.

Now, that’s cool, I guess, if you’re Dell Computers or if you’re, I guess, McIntosh or you’re Apple. I mean, if you’re one of these big companies perhaps and you’re looking to launch a multimillion dollar product and you have to spend the investment before you build it, that probably works. But for most of us who are just starting off, the easiest way to test the market is to put a price on something and try to sell it even if it doesn’t exist yet.

customerIn a sense, get the customer to buy before you build it. And the easiest way to do that is to create a sales page and to get that sales page in front of potential customers. So there’s a number of things with that. You may be asking: Okay, how do I find my potential customers? What do you mean by a sales page? Is it legal to even sell something before you build it? You have to be careful. There are certain things you can’t necessarily be trying to sell. I don’t know, a certain type of printer that’s going to revolutionize before you sell because that could take years to actually build out.

But if it’s a service, if it’s something that is normally sold before you deliver it or if it’s coaching, if it’s consulting, if it’s a product that actually — And Kickstarter is a great example. It’s a very recent example of crowd funding, of, in a sense, doing exactly what we talked about but they get a percentage of it. However, many of us online who are familiar with sales pages and how to do this, I’m looking at Kickstarter, I’m like, “Man, I’ve been doing this for years.” Welcome to the club kind of thing.

Tom: Exactly.

Antonio: But the point is there’s a number of skills that are required and I think we could start at the very beginning and we could talk about what’s going to go into this. And ideally, if you’ve got an idea — And we’ll just use some of the examples of some of the guys where we’ve got in our group. So who do you think in our group we can use as an example? And we’re talking about the guys over High Speed Elite.

Tom: Yeah. There’s a few. We’ve got Trevor who’s working on a number of different projects. I guess I won’t share the names just yet as he’s just starting to build it. I think the way he wants to approach it right now is it’s going to be something along the lines of how to — Essentially a program or platform for people to achieve excellence, something along those lines, and using his background.

Antonio: In shooting?

Tom: He has a couple of different ideas. One was in shooting but maybe that’s a good one to talk about.

urlAntonio: Yeah. He’s a shooting example. That’s something when he’s going to go within. And I have to admit I’m a big fan of just throwing it out there. Because to be honest, a lot of us think we need to keep our business plans in beta. There’s a great story. There’s a guy named Sabeer Bhatia. He’s the founder of Hotmail. For a year, he kept his idea for Hotmail secret. In that case, I think he had a good point because he was passing it around to different venture capitalists over in Silicon Valley and he knew this thing was going to explode. And it did. And he was able to sell out for quite a bit of money once he got it going.

But I think for most of us, we’re not really creating anything that we have to worry about anyone coming in and stealing. We don’t have that, as much as we’d like to believe we do, it’s more about execution. And most of us, we don’t need to be in stealth mode for most our ideas. We just simply just need to execute, make it happen. But let’s use Trevor’s example. I think he talked about — Basically, he’s got a lot of experience with sniper units. And in a sense, being able to — He knows how to shoot.

I don’t think he’s Gunny Hatchcock level but he’s probably, for the Army — You guys, I hear, are pretty good. So we’ll go ahead and say that he’s got some skills. And his idea, let’s say, is to help hunters take it to the next level, how to ensure that when you see that 30 point buck, that you do not, in a sense, miss your once in a lifetime opportunity and you’re able to zero in and basically — How was it our friend Gunny Highway would say? You could shoot a flea off a dog’s backside from 200 meters.

So maybe Trevor is going to give them the skills so at 500 meters they can actually hit the target and get a kill shot at that distance and he’s going to bring in — This is how in the military we would account for temperature, for wind, for all of these other things that you need, time of day that you need to pay attention to. And these are the techniques, the breathing, in a sense, the controlled firing from different positions, from prone, from standing, and what you’re going to be able to do. And he’s going to run them through.

Now, what he could do is immediately the first thing he has to identify is what is the pain point that he is solving? So, Tom, you’re familiar with that term, right, pain point and solving that in a business situation?

Tom: Yeah, absolutely. And I’m a big proponent of lean canvas and business model canvas, something that allows us to map the stuff out in one page. Obviously, that’s what we’re going through in the course right now and having everybody develop their lean canvases. But when it comes to the pain point, for something like that, it’s funny because I did talk to Trevor. Immediately, it sounds like a great idea because, as context for this, I didn’t know because I’m not a hunter at all.

I’ve never gone hunting. But hunting is a sport or is an activity that people put a lot of money into. So these people go on these big game hunting and things like that. They’ll pay upwards of $20,000 or $10,000, $20,000, $30,000 whatever, to go on these excursions, to go try, like you said, I don’t know, hit a buck or something like that, hit whatever listed really priced animal. So they put a lot of money into that. If they can’t shoot and they miss the animal, they just spent all that money and they have nothing. They walk away with nothing.

And oftentimes, they only have one chance to hit this thing. So to me, that is the pain point. It’s the idea that you could put $20,000 or $30,000 into something and come away with nothing.

hunterAntonio: Tom and I love it because I was just thinking about Wisconsin hunters. So all of a sudden, I’m thinking like, man. Because if that’s his target market, to be honest, they’re more interested in drinking beer and having a good time. I don’t know if for them, and we’ve got so many deer here, I don’t know for them if it’s what it would be worth really to pay for this advanced level of training. However, if he’s targeting and he specifically goes after men who are doing Safaris or women that are doing Safari, that in a sense, they want to know that they’ve got the right skill set when they show up to be able to–

I’ve got a buddy. He’s actually the godfather to my daughter Arianna and his name is James [0:09:24] [Indiscernible]. And that gentleman, he grew up traveling to Africa and going on these really high end Safaris. I mean, he’s got a trophy with over — I think he’s got to have at least 150 of his favorite animals. He bagged quite a few more. But I’m talking all types of crazy stuff. But one of the things he loves to show me is his little animal, looks like some little deer. It’s got its little horns. He talks about how they tracked this thing for days and he got one shot. I mean, I don’t remember the exact range that he was able to make this kill.

But when he talks about all this, I’m like, “Wow.” He talks about how he felt it was almost like a lucky shot because it’s such a far distance. And, I think, for guys like that, it’s pretty darn important. Now, he’s got to know really where are those guys going to be? I think, getting back again to the point, he’s not going after the casual hunter. He’s going after the hunter perhaps who is looking to spend a bit more, is going to be traveling outside the country. And so, to him, to spend $1000 on marksmanship training is actually nothing because his entire trip — These trips cost $20,000 to $50,000.

These are not inexpensive trips. And it’s not for everybody. I’ve never been on a Safari that charges — Or I’ve never been on one at all. For me, I’m not. But there is that group. There is that audience. And he’ll want to see is there a market for it? Is this a pain point? He’ll want to speak with guys and ask them straight up. Is this something that you would be interested in and you would actually pay for?

Tom: Yeah. That’s a good point because here’s the thing. When you look at it from the outside, I see that and I immediately think, “Yeah, of course, it’s a pain point.” Of course, it’s a problem that people would need to solve. But it’s important — That’s an assumption, when you realize it. Even though it seems obvious, it’s still an assumption and we have to challenge those assumptions. So my assumption would be that, of course, it’s a pain point. Of course, these guys spending this much money to go hunt animals would want to be able to actually shoot them and hit the target, right?

But the reality is, there’s also this possibility that’s an assumption. So we have to go and find out if that’s true or not. And what you might end up happening is if he starts to engage in this conversation, people at that level, they might even think that they don’t need it, that they’re good to go, that they don’t need that training immediately. So here’s the important part of this and I think what we’re getting at is that by treating everything as an assumption and going out and trying to find whether it’s true or false.

And if we can confirm it, we can go ahead and may take the next steps to develop this product or we can say, “No, let’s bag it,” because this demographic doesn’t recognize it has a problem. And if they don’t recognize that problem, you can’t sell them a solution. Does that make sense, Antonio?

magazineAntonio: It does. I mean, some of us are pretty hard headed coming out of especially the Marine Corps. We think we could always find a way to overcome, get around. The thing is, you want to go for the low hanging fruit. You don’t want to try — When I’m looking for advertisers, I don’t try to bring on advertisers who had never advertised. One of my assistants, her whole job is to go through magazines of various — From Men’s Health to Esquire and we’re constantly tearing out people that — We’re tearing pages out of people that are already advertising.

Because guess what? They understand the value of it. I’m not going to have to sell them on the idea of advertising. I simply have to sell them on the idea that advertising with me is the right deal. So you want to be looking for people who are already spending money which, again, this Safari guys are spending. The thing is, for this one, I get excited thinking about this. But it’s also how technologically savvy are these guys. Is an online sales page even going to be right? I would think that it would be but it may be something that you find this demographic. They actually want to be catered to. So $1000, honestly, they may look at that and say, “Well, honestly, I want more. I want three days of solid training.”

Tom: And I’ll pay you $10,000 for it.

Antonio: Exactly. And I want you to recreate this situation. I wanted someone that show up, I’m not looking like a fool. And also, you may realize that actually they’re not concerned about bagging the animal or not. What they want is they don’t want to show up and have in the group, because they’re showing up for some of their other peers, guys that they’d been maybe hunting with or working with for a long time. It’s their first Safari. And they’re doing it with a group of other businessmen.

They don’t want to look like the green guy. They don’t want to look like a novice. And so, what they are actually paying for is a little bit of advanced information. So you may realize you have to actually really cater to their specific needs.

Tom: Yeah, which is interesting. So then my thought would be. I guess, taking it from there, we spitball some ideas in terms of what is the problem. And then taking it from the vantage point of assuming or just saying it’s an assumption and we have to go find out if it’s true or not, if the assumption is valid or not. And so, let’s say, hypothetically, we find out that these high end hunters, these people spending a lot of money to go hunt do actually have a problem or recognize they have a problem and need, which is being able to bag an animal, so they need to be able to accurately shoot an animal. They understand that that’s something that they need help with.

My question would be like, like you said, if it’s a difference between — So my thought would be or my next question for you, Antonio, would be what do you do? Do you actually try to put it online or do you get on the phone trying to find these people or do you talk to companies that already facilitate these trips and try to get in front of their audience? What’s the next step from there?

go onlineAntonio: To be honest, I don’t know. I would say all three things that you just mentioned are very viable options. I mean, if this is a young man in his 20s, in his 30s, then online. He’s probably going to be very tech savvy. If the gentlemen that you’re targeting, if they’re in their 50s, 60s, 70s, all of a sudden, you’re realizing that, “Hey, I may need to go really old school.” It may be something that literally I need to show up to the club that they hang out at and meet them in person and have a conversation.

If they’re super busy, let’s just do it over the phone and get a warm introduction from a — And that’s where you may realize that there’s all of these companies already that are catering to these people but aren’t offering this service. And it would be something that I would come in under their umbrella. They, of course, would get a cut. But I would be able to — Maybe you speak with them. You may find the guys that are in the business actually understand more of their needs because they listen to these guys. I mean, they take them on Safari for a week and they listen to them complain about what they wish they would have done before.

And all of a sudden, that allows you to craft. Ideally, what you’re doing is you’re collecting a list of all the problems, the things that drive them nuts, so that you understand their problem better than they do. And when you can explain to somebody their problem in greater detail than they can, they assume that you have the answer, the solution. So you’re not just creating a solution and then trying to find a customer. You’re listening to the customer and you’re crafting your solution to meet not only what their needs are but you’re making sure that it’s what they want.

Sometimes two different things. Because people want something but you always, you need to give them what they need that is going to satisfy, really help fix their problem. But you need to also realize that they may not, in the same words, they may say that, “Yeah, I want to be a better shot,” but what they’re really saying is, “I want to be more comfortable with my weapon and fully understand its capabilities so I’m not a green novice when I show up there in Africa.”

Tom: Yeah, exactly. And I’m doing a quick search on Amazon in the Kindle store under hunting just to see what I come up with. I don’t know. I think this would be interesting. I’ll continue to check this. But one of my thoughts too would be that knowing — Once we say we can validate that pain point, that it is real, then we mentioned a couple of ways to approach the solution, right? One is maybe a sales page online. One is trying to connect with these people one on one. Another avenue is potentially going to these companies that already facilitate these trips.

And then one of the things also is looking in terms of what are additional ways that we could potentially test out this idea, package it and market it? I think Amazon and the Amazon bookstore, it already has a massive platform out there. People are already on there looking to buy things. I think potentially him, Trevor, even creating a book and selling it on Amazon would be a great test, simple test, that wouldn’t take a lot of time or money for him to put together and get it up there and see how well it does organically in the Amazon bookstore to see if there’s enough demand for something like this.

That’s just one, another alternative to putting your idea out there. But now my thought — And if you have any comments to that, Antonio, I’d love to hear them. But to segue from that, say we do put something out there just like a book, any book or something like that, you do get some sales from it or do you get some interests. What are the next steps? How do you know when to try to scale something?

Antonio: Well, I would say that our goal, and at this early point, depending on if you’re really — I don’t know if the base or the customer base is big enough. I mean, the goal would probably be at the $10,000 course sales and to realize that’s where you want to get to. The book on Amazon would be probably a great way for you to bring your thoughts together to see if there is any market at all. But it would also be — And don’t look at this — Even if you were only to get maybe like five to 20 sales a month, it would actually still be well worth it because you would then, whenever you’re speaking with somebody say, “Oh, yeah, I wrote a book on it,” or “I’ve got a book out there.”

It’s a business card. It’s a great authority. And taking a step back to the sales page, it’s not just about — It could be a sales script. In a sense, what you’re doing is you’re testing that market to see if there is a market for it. When are you going to scale? When are you going to start taking this up to the next level? When are you going to start spending money on advertising? I would say once you get the first person that’s willing to open up their wallet and pay for you to do this and when you look at that — I mean, because let’s just say you do get that person that pays you $10,000. But here’s the deal. They want you to fly out to where they’re at.

They want you to be there and to give them that coaching. And at the end of that, you may find that it’s not really worth it. It’s not really scalable because I spend $3,000 on travel and lodging. They required a lot of me and I don’t know if at the end of the day I made $2,000 to $3,000 and if my goal — You just may find that’s not the right business model for you for what you want to do. However, you may find that, “Wow, I was able to–”

They travel to me. I’m down here in Texas, which I know Texas has a lot of open land. They’re also very friendly with guns. So that’s why I chose Texas versus, let’s say, Illinois or something like that.

Tom: Yeah, Chicago.

Antonio: Yeah, yeah, Chicago. You’re not going to be able to be in this business. But down in Texas, on a ranch, you could bring it in and literally you could have it so these guys are flying in and you treat them like — You’re just calling this a vacation. You’re bringing them out to your ranch. You are putting them up for three to four days and you look at this — Your cost is, let’s say, $2,00 to $3,000 and your profit is $8,000 and you’re bringing in, to even make it more fun for them, you’re bringing in five guys at a time. That’s a very viable business model.

All of a sudden, you realize your costs are $15,000. Your total revenue is $50,000. That may be a business you’re pretty happy with. You’re in it a few times. You get comfortable with the numbers and then like any good franchise, once you got those numbers right, that’s when you start to figure out, can I scale this? Can I take it to the next level? Because I’ve got $600,000 a year business here. Now, can I take it into a $1.2 or a $3 million dollar business?

But those are good problems to have. And then probably beyond the scope of this conversation today. I think the point we wanted to cover on today and zero in on, Tom, is really it’s about testing that market. Because it’s hard. It’s scary. Because guess what? It will probably happen on most of your assumptions. Can you guess, Tom, what’s going to happen that is not going to feel good?

Tom: It’s wrong.

Antonio: Exactly.

Tom: It is an assumption. It is not — Yeah. What you think is a great idea is just nobody else cares about or they’re not just willing to pay for it or they just have other solutions. They have other ways to work around it. There’s so many things that when you start looking for these or when you start — You come up with an idea for something and you start to try to test it on the market, I mean, obviously, I think that the ultimate wrong way to go about it is to put a lot of money and time and effort into building it and then trying to sell it because that’s the recipe for disaster.

I think we live in a time period now with the access to technology we have and connection to be able to connect with these different groups, different tribes. We talked about that in prior conversation. But that you have access to anything. You can touch any group you want and you can interact with them. But it’s so easy now to actually truly validate an idea before you can move forward with it. And when I say validation, I really do mean coming up with the wireframe or the outline or something that’s tangible enough that you can then actually sell to someone.

And kind of bring this back to the beginning of the conversation. This is something that you said that you can sell essentially a promise, in some ways. It’s probably a bad way to put it but that you’re selling somebody whether it’s an early adopter, something like that, on this idea that you have with a promise that you’ll build it out of the course of the next few weeks or months or whatever it is, whatever the agreement is. But I’ve seen this done time and time again for software and service.

Obviously, we did it to launch High Speed Elite, introduce High Speed Low Drag. I’ve done a number of other projects. But also, when you look at the core fundamental of that, that’s exactly what a presale is in a lot of ways. If I want to pre-order a video game or a book, that thing is not confirmed to be built yet. So my question now would be — I don’t know if this is worth getting into, but I’m curious. Say you put something out there, some people buy but not enough to make worth your while, what do you do?

Antonio: Well, it’s something that you’re going to have to — That’s a tough decision. And you’re going to have to say, “Do I believe in this enough that I want to give this another shot and test it?” The hard part and one thing I am resisting a little bit sometimes the Amazon sales is you can’t reach out and further talk to those people that purchased. It’s anonymous. That’s why I like to sell products from my own website or to sell them over the phone.

I mean, if you’re getting some people to buy but not as much and you’re really worried, then speak with the people that are buying. Find out why this is viable. Find out why they bought. Would it be something like what value did they get with your testing? Well, maybe you are undercharging. Maybe you literally need to be charging twice as much, three times as much money because it’s worth that. And those are things you’re going to have to dive in.

And I think that’s beyond this video because I think that is a hard place to be, is when you are starting to make money but it’s not enough. But that’s a good problem to have.

Tom: Great stuff, Antonio. Great to hear that from somebody who’s been there, done that as well. I think this is incredible advice for any kind of bootstrapper whether you’re active duty right now and you have an idea that you’d like to see if it’s possible while you’re serving and you only maybe have a couple of hours every night or some freedom on the weekends to test something out. This is a kind of advice you need to adhere to.

And for those veterans who have gotten out of active duty service and have a part time or full time job that still just don’t have the necessary resources or a ton of money and time to put towards something like this, this is the way to do it. So start out with an idea to test it out in the market in a very small way but in a very real way you get real feedback, as in you can really challenge the assumptions you might have about an idea, product or service.

So I hope you enjoyed today’s podcast. If you guys have any questions or any comments, what I’d love for you to do is check us out on iTunes and leave a review and leave your comment or question. We source questions directly from our audience. Everything we talk about in every one of these podcasts is a question from our audience. And we’d love to get you involved. So that wraps up another episode of High Speed Low Drag Podcast. I’m Tom Morkes alongside Antonio Centeno. And we will see you guys next week.

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