Development

Importance of gaining profit on the product’s first days

Slava Baranskyi, a former marketing director at the Petcube startup, co-owner of Lifehacker.ru, CMO and co-founder of the LIVE.LOVE project will give an analysis of sales strategy. Slava told about sales on all rounds of launch and development of the product. He presented his personal experience as examples.

5 concepts about sales before the product launch

1. Sales are not the way to make money on the first stage, it’s a way to test a product.

It’s essential to sell a product long before it becomes a perfect and sophisticated tool. A typical mistake of business owners is to invest time and money into a site launch instead of starting to sell and testing its feasibility (is it possible to sell anyway?) on the target audience. MVP (minimum viable product) helps to find that out.

The problem of startups is that they imagine a new reality and then create a product within it. For example, developers suddenly decide that people need to search for a sexual partner. They start development of a site, create a server, an application for Android and iOS, then modify it, and after all that, the design becomes out-of-date. Eventually, the project has not yet sprung to life, along with the concept that may be unnecessary, but a large sum of money has already been wasted.

Slava Baranskyi

When we invented Pure, at the very dawn of this product there was a hypothesis that on sexual dating sites people use the chat function frequently. In other words, everybody attends these sites with the objective of developing a sexual relationship as well as flirtation, but it all comes down to endless discussions. We suggested implementing a direct matching method: either you make a decision and you meet with the chosen partner or you stop communicating.

For Pure, we took a prototype that cost us $0 (except for our time), and just showed it to people. We asked: do you like it, what do you think of this button, what about voice calls, will it make a big difference if it costs $1 or $10? This is called sales because we were finding out if people were ready to pay for this service.

Pure is a dating service, an application where you anonymously search for a sexual partner. It is available for iOS and Android. To meet someone you must make an application. The application is valid for one hour and then it is automatically deleted.

2. Sales are a test of a team

When the team is ready, everybody is full of enthusiasm and passion and is ready to develop a cool product. However, when you propose your teammates to try to sell your idea, you will see who is interested in making money.

At this moment, everybody invents an excuse: they won’t buy it, it’s too early, the interface needs an upgrade, the product needs modifications and fixes, it’s too expensive, too cheap… The benefit of early sales lies in the truth that it shows, who is really suitable for the team. You test how people are interested in being result-oriented.

3. Sales should always go ahead

It’s critical to sell at the first stage, as sales help test the viability of the concept: you understand whether people are ready to pay money for an idea or not.

In the Somnenie Talks project, we began to sell tickets at the lecture about a healthy lifestyle. The aim was to find an audience and test an assumption that the topic of yoga, wholesome nutrition, and psychology in our vision is something that is worth paying for. That was a verification of the prospective project LIVE.LOVE. We started with sales. The first thing that we did was distribute an invitation: “Buy a ticket for”. We tested it with money right away.

Slava Baranskyi

Now, when the project has already started, we have gathered several groups of people who are within LIVE.LOVE Swim и Run initiatives are engaged in amateur sports, preparing to swim across the Bosporus and run a half marathon in Vienna.

Somnenie Talks is a charitable project including lectures dedicated to a healthy lifestyle and an amateur sport. It was founded in 2015. In July, 2016, this project turned into the LIVE.LOVE website and a training commercial product LIVE.LOVE Challenge — a sports training program for newbies.

4. Good sales initiate many benefits, they let investment into a project grow faster

As soon as you increase the project cost, you gain profit, which can be invested into interesting solutions. In this case, the rate of the business growth increases.

In Lifehacker, we developed projects from scratch. First, we sold an idea, then we spent the collected funds on hiring a team that implemented the idea.

A good example is a sub-blog adidas.lifehacker.ru with articles on sports with regular and interactive infographics. When we were selling it to adidas, we had no idea how such infographics are made and what they should look like. But now the website page is attended by about 7 thousand users every day, taking into account that it has not been updated for over a year. Now, for adidas group in Russia, this is one of the stable sales channels on the Internet.

Lifehacker is a blog about productivity, vision, health, and sport, as well as effective use of gadgets, sites, and technologies. The blog has over 8 million unique visitors per month and over 20 million page views (according to Google Analytics, July, 2016).

5. I don’t believe that the price plays a decisive role for products

Slava Baranskyi mentions that when talking about the sale of new solutions, any price is possible. One determines the price based on the audience’s response. As soon as the product value rises, its price goes up too.

The price doesn’t mean anything because the product is a solution for the problem of your target audience. If the solution is good and keeps improving, people are ready to pay for it. We checked it many times on both training products and advertising media. First, the X price is established, then it may rise after taking into consideration the consumers response.

To sum up, the first sales are:

  • A test of the idea;
  • Verification of the team (those who don’t want to sell go away);
  • Price evaluation.

Sales help throw away trash from head, product, and team.

Slava Baranskyi

If you want to make sales on an e-marketplace platform, you must closely assess all the risks. Such projects are highly profitable, but they demand a lot of marketing efforts.

A marketplace is the most profitable niche on the Internet, but it brings in money only because it is very complex. It is filled in by three groups of people, the vendors, the consumers and a third party that manages the marketplace. There is only one nuance. It is crucial to the be first on the scene, because the biggest marketplace in its niche pushes out others within its global competition. It’s a war until the last warrior, that’s why Amazon, Airbnb, OLX or GooglePlay has no competitors. Anything that emerges, does not survive.

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