Start your business once you find five people who would purchase your product.
A lukewarm “maybe” doesn’t count. You need an emphatic “YES.” Look for five people, then start building. Crucially, the percentage of people who say yes doesn’t matter much, but you get extra points for getting five “yes” answers for a niche software-based product that doesn’t exist yet.
I call this signal to build the “Five Finger Trigger.”
It works because niches on the Internet are bigger than you think, even after you account for the fact that niches on the Internet are bigger than you think. If you can find people in real-life who want your product, thousands of people online will likely want it too, provided that it serves a global audience.
Don’t judge the merit of your idea based only on what you see in your day-to-day life. It’s too limited to reflect the scale of the market you can reach online,¹ never mind the opportunities that exist solely in the digital world. Moreover, people are more likely to express their weird interests online than offline, so you can build a successful online business with interest from a smaller percentage of people than you think. That’s because a small percentage of the very large number of people who use the Internet is a big customer base.
Note that the Five Finger Trigger applies best to software businesses.
That’s because it assumes a low cost of building a prototype for your product. For example, if you know how to code, you can build your first software product by yourself for less than $100. Software is inexpensive, so the most expensive variable is your time. You can find your first customers for cheap by writing online or running a small batch of advertisements on Google or Facebook.
In contrast, this model doesn’t work for starting a solar panel company because it costs millions of dollars to build a prototype, and “five friends said they’re down” isn’t the kind of certainty that venture capitalists are looking for.
Once you have five interested people, build the product for yourself. Don’t do market research. It’s vastly over-rated at the early stages of product development, especially when your costs are low, your risks are small, and the market of potential customers is so big. Besides, selling your first product will teach you more about your customers than years of market research. Move fast and build what you wish already existed instead. If you do, your intuition will be smarter than the suggestions of your customers.
When you launch, share your product with your group of five. If you can delight them despite the inevitable flaws in the early versions of your product, keep building. If they don’t like it, try another prototype. Ask what they don’t like, and narrow into the pain point you want to solve. At this stage, if you use the product — because it helps you, not because you’re its creator — keep going. If you don’t use it because it genuinely helps you, take a step back. No matter what you do, keep your costs low and your team small in the early days.
As an example of large-scale successes you may not hear about in “real life,” my friend Nathan Barry started an email marketing service for online creators called ConvertKit. Instead of following other people’s suggestions, he designed the platform for his personal writing process. Even though probably no one at your Thanksgiving table has heard of it, the company now earns more than $20 million in annual recurring revenue.
I used the Five Finger Trigger to start my business too.
I never thought I’d become a writing teacher and only started Write of Passage after five friends asked me for online writing advice in the same month. The idea for the course was theirs, not mine — I wouldn’t have made the course without that critical mass of requests for advice. With their encouragement, I skipped the market research phase and built the course I wish existed when I started writing online. But others expressed concern. One mentor who runs a major investment fund doubted Write of Passage’s validity, even after it became a profitable business. He told me there wasn’t a market for online writing education. In retrospect, he underestimated the scale of the Internet and the number of people who wanted to write online because he runs and invests in businesses tied to the physical world.
People like my mentor underestimate the number of Internet businesses in the economy, in part because these numbers aren’t reported in the media. According to one recent article by Will Schreiber, “Of the 3,000+ software companies acquired over the last three years, only 7% got TechCrunch, Recode, HN, or other mainstream tech coverage.”
Creating online gives you personalization and scale. The Internet feels both bigger and smaller than the physical world. It feels bigger because it exposes you to an order of magnitude more people, opinions, and events. But it feels smaller because it’s so easy to find exactly what you’re looking for.
To be sure, the Five Finger Trigger is easier to pull when you have an online audience. Both Andrew and I benefited from a loyal group of readers who doubled as the target market for the products we sold. Those small audiences helped us grow our businesses without paid marketing in the early days, the bulk of our audience growth came after we launched our products.
So if you want to start an online business, don’t worry if you don’t see your idea validated on a massive scale. Look for five people who would purchase your product. Once you find them, pull the Five Finger Trigger and commit to creating.
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¹ The Internet is the best matching tool ever invented. Uber matches drivers with riders, Craigslist matches buyers and sellers, and Tinder matches young singles.