Making Your Product Profitable Before You Sell It

Great companies and brands create profitable products long before they ever ship them. So, why is it that so many people insist on creating something, and then seeing if people want it? These days, this is the hallmark difference between those who sink, and those who swim.

It's not just solo entrepreneurs who make the mistake of spending lots of time and energy creating something before determining if the market wants it or not. Big companies make the same mistake. They assume they know what people want, and they fail.

The smart people make it big by selling out their products before they ship (see: Apple). I believe there is a lesson to be learned here. Let's look at a few examples of products selling out before they create and ship:

1. The Apple iPhone. Sure, Apple creates the product before it pre-sells the iPhone. But the company also has mastered the art of building up desire and anticipation before the product is available for purchase. Before it's ready to ship, they presell the hell out of it.
2. Tim Ferris' Four Hour Body. Like many authors, Tim Ferris made sure there was demand for his book by carefully crafting a compelling story to get people excited. Then he made it available for presell.
3. Threadless T-shirts. Designs are crowdsourced and voted by the Threadless community. The only designs put on a shirt are the ones that get the most votes from users. Seems to be working pretty well for them.

Essentially, all these people are ensuring that their products will sell before they spend a bunch of time and money creating them. Seems like a smart strategy, right?

It's one I've been using as well. I pay close attention to the feedback from my audience and buyers to shape the direction of my offerings. If no one wants it, I don't make it. It seems simple, but you'd be surprised how many people do the opposite.

So, how can you ensure that what you create is successful before you create it?

• Set up feedback loops inside your business. You can do this with auto-responders on your mailing list, in product surveys, etc. Keep your finger on the pulse on what your audience's biggest needs are, but keep in mind that it's up to you to interpret that data and take the appropriate action. Sometimes people will tell you what they want, but they really mean something different.
• Create a compelling story. Develop a narrative about the creation and evolution of your product for your audience to follow. Every good product creation story should have a clear beginning, middle and end. Have you ever noticed that in a TV series or movie at the end of every scene there is something that keeps you hooked and baited to find out what happens next? Every time you give people an update about what's going on, make sure you give them a reason to come back to find out what's happening next.
• Use social proof to demonstrate to people the demand of what you're creating. When people see that others are interested, it takes the burden of risk off of them to become interested, too.

Whether your product is physical or digital, there's a lot of opportunity for engaging your customers more, creating more of an emotional connection and having a lot more fun. It's also a lot easier to create something great once you know it's sold. Not to mention less stressful. So, how can you apply this with your next product?

Jonathan Mead helps others create work they love while getting paid to be who they are. He is a member of The Young Entrepreneur Council (Y.E.C.), an invite-only nonprofit organization comprised of the country's most promising young entrepreneurs. The Y.E.C promotes entrepreneurship as a solution to youth unemployment and underemployment and provides its members with access to tools, mentorship, and resources that support each stage of a business's development and growth.

[Image: Flickr user kevincole]