Bill McCloskey

Bill McCloskey is the founder of Only Influencers and eDataSource.

Entrepreneurs Corner: Validating Your Idea Part 2

Entrepreneurs Corner: Validating Your Idea Part 2

In last week’s article I discussed the concept of validating your idea. Today, I’m going to demonstrate what I mean by example and talk about the process I went through in validating two business ideas, one I built and one I didn’t.

Example One: Deathbook. 

The Idea: A “memorial” website that would never expire and never cost users a penny. 

The Business Model: Revenue generated from links to the pharmaceutical industry and related Memorial products (i.e. Flowers). 

The Pitch: When there is a death in the family, many of the deceased personal papers, interests, and belongings disappear. Things like personal letters, and other events that were important in key moments of a persons life are lost. Deathbook (as a working, not the final,  product name) would solve these problems by allowing family members to create a free and never expiring memorial page where photos, documents, videos, and remembrances from friends and family members can be permanently posted in a permanent memorial page. Each page would contain a link, linking the cause of death to treatment options for that cause. For instance, for Joe Doe, it says he died of liver cancer at age 64. The link would provide treatment options for liver cancer, links to pharmaceutical brands, and statistics (who else on Deathbook died of liver cancer, what is the average age that someone dies of liver cancer, etc). 

Classic memorial sites cost money to maintain and stay published. Other than immediate loved ones, the majority of the traffic to the memorial site will occur soon after death and to a less degree on the anniversary. Deathbook on the other hand costs nothing and will never expire. Engagement is created via alerts: sign up for alerts when anyone who graduated from your high school or college in a particular year dies. Get an alert anytime someone with your last name dies, your home town dies, or relations die. And because it never expires, generations from now will be able to look back and actually see and hear what their grandparents and great grandparents looked like, and sounded like. 

Validating the Idea: I spent about 6 months validating the idea and the first step in that process is to discuss the idea with every one I could. Initial feedback was great. Everyone LOVED the idea, including the business model. I investigated the funeral industry where I thought my first leads would come from and had lunch with someone whose family were in that industry. After spending 6 months interviewing and refining the idea, I decided NOT to go forward with the idea. 

There were two main reasons. One had to do distribution and one had to do with Barrier to Entry. My interview with the person from the funeral industry was not positive. The funeral industry is very traditional, family run, and extremely hesitant to new ideas, especially technology ideas. My initial ideas around Go To Market Strategy included heavy reliance of the funeral industry for early adoption and now that seemed unlikely. This, of course, was not an idea killer by itself: other methods of gaining customers could be worked out. But then I slammed into a wall that I couldn’t see over or around. That wall was Facebook itself. 

When I started on this idea, Facebook was still really new. It did not have the role it currently controls in our daily lives. But it was clear to me, it eventually would grow and could easily replicate what I was doing into their current offering. THEY could easily become the Deathbook I was imagining and leave me in the dust to become the next Myspace. 

Example Two: Email Data Source 

The idea: The first competitive intelligence tool for Email Marketers. 

The Business Model: a SaaS Annual Subscription. 

The Pitch: Companies purchase competitive intelligence about every aspect of their competitors marketing programs (tv, radio spots, print ads, banner ads) except email. By archiving marketing email campaigns, insights into a companies creative, frequency, cadence, and segmentation could be studied. Additionally companies can monitor the partners the company works with to deliver emails and they can monitor their own affiliates, which are often working rogue and without the brands awareness. 

Validating the Idea:  The idea itself was suggested to me by one of my clients at the time, a large New York agency. One of their clients wanted to monitor their competitors email campaigns so could I find them a vendor? After spending weeks attempting and failing to find anyone who monitored email campaigns, I decided that it sounded like a great idea for a business: I already had a potential customer if I could provide the service. 

Again I interviewed people in the email marketing industry, told them my idea, and got their feedback. Everyone I spoke to gave me encouragement that there was indeed nothing like that in the industry and that it was needed and people would buy it. And the idea had a built in Barrier to Entry: the data. Because email is here and then gone, our database became the only database that was collecting data that could not be replicated by anyone. Even if a competitor were to start today, they could never catch us. We’d always have more data. 

So, I had an idea, one that I had a potential customer ready to buy, I had a strong Barrier to Entry, and I could finance it. Feedback in the industry was positive and the related competitive intelligence companies where thriving. So I went ahead and built it, and today, 14 years later,  it is called eDataSource. 

Title: Entrepreneurs Corner: Validating Your Idea Part 2
by
About: Validating Business Ideas
Audience: Entrepreneurs
Publisher: OnlyInfluencers.com
Copyright 2017, Only Influencers, LLC
 

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Sunday, 26 February 2017
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