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A.T. Gimbel - How Do I Develop a Product or Service to Sell? - Part One - AI Summary, Mind Map & Transcript | Entrepreneurship & Innovation Institute | YouTubeToText
YouTube Transcript: A.T. Gimbel - How Do I Develop a Product or Service to Sell? - Part One
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The core theme is a practical guide for entrepreneurs on how to develop a successful product by focusing on rigorous problem validation, market understanding, customer discovery, and business modeling before investing heavily in product development.
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so previously at LED product and go to
market functions for the healthcare
division of LexisNexis as well as
leading roles in corporate strategy and
mergers and Acquisitions at the company
prior to that he was in Consulting with
Bain and Company serving clients across
multiple Industries with a focus on
growth strategy processes Improvement
and Customer Loyalty he has also worked
for several startup companies in sales
and operations roles at holds an
industrial engineering degree from
Georgia Tech and an MBA from Harvard
Business School I'm going to hand it
over now to at to continue our conversation
conversation
great well thank you Risha for having me
here excited to uh talk things
entrepreneurship and product development
I've made uh many mistakes and have lots
of learnings over the years so happy to
share a few of those with you here put
together just a short presentation
um so let me pull that up here
make sure folks can see that
yes all right
well great so
so
really you know as Risha said talk a
little about how to develop a product
and how do you do that simply uh and
build something that customers want and
so I'll get into that in a minute but
let me just give you
um a little bit more color uh from so
you understand why I'm talking about
some of these things and experiences so
a little bit just for just further
background grew up in Florida I came to
Atlanta to go to Georgia Tech and loved
Atlanta since then
um but as I was telling Richard earlier
was involved in some startups in college
uh but back you know when I was in
school that was frowned upon it was well
why don't you go work for Home Depot or
coke uh and and so there weren't many
resources so I'm glad to see there's
some more resources uh around like that
Risha and her team team have for that so
dabbled in some startups as an engineer
though and I realized I knew nothing
about business and so that's what's led
me uh to do some Consulting with a
company called company
and then being there ended up being
there close to 10 years before and after
business school just love the people and
learning but always still dabbled in
startups on the side I think once you've
got some of that itch uh to be in
control and build a startup it's hard to
let that go so always loved doing that
and then when I left Bain I got a unique
opportunity to go be part of a team that
was building a corporate startup it's a
little bit of The Best of Both Worlds of
a company that was a big data analytics
company and they were starting a
healthcare business within that
so you get a little bit of those Best of
Both Worlds if you get to act like a
startup but yet the financial backing of
a parent company and not having to go
out and raise money on a shoestring
budget so that was a neat experience got
to be part of the team that worked with
the CEO to set the strategy LED some
Acquisitions ran some of the product
lines uh for a couple years and so we
took that from nothing uh to 100 million
dollar business uh in four years so it's
a neat little ride to see a lot of
different stages of the startup you
would see because it's it's very
different at Zero versus you know 5
million versus 50 million versus 100
million and so I got to see a lot of
different things
there and so that led me to come join
Atlanta Ventures a little over five
years ago uh just helping support
early stage entrepreneurs and we do that
in three areas the first is we have a
studio where we co-found our own
businesses from scratch with
entrepreneurs so we're all entrepreneurs
ourselves we love starting businesses
we've got a spreadsheet of over 100
ideas and it's just meeting with great
entrepreneurs who are passionate about a
space uh and doing Discovery and going
to build together
the second area is we support
entrepreneurs with early stage investing
and software recurring Revenue
businesses to help them with you know a
couple hundred thousand up to a couple
million dollar checks uh that have some
early passionate paying customers then
the third area is just lots of resources
and events for entrepreneurs I'll share
those at the end we've got blog posts
founder stories podcasts tools and
templates uh one I'd encourage you all
to check out there's a weekly one called
five and Thrive literally five minutes
it highlights three or four startups in
the Atlanta area doing something
interesting whether it's a new product
launch or a exit or a raise or hiring so
it's a great way to stay connected uh
with folks and then last thing I'll say
in the upper right I've got uh three
three boys at home so that keeps me busy
on the home front and endless learnings
on uh how to talk about entrepreneurship
uh and be a part of that being part of
their lives as well so all right enough
about me you guys are probably tired of that
that
so you jump in here got a couple areas
and this may be a little
counter-intuitive but I'm going to spend
a fair amount of time about how to build
an effective product that has nothing to
do with actually building the product
and the reason is I think this is one of
the number one mistakes that I've made
and that I've seen entrepreneurs make
all the time is they rush to go build product
product
and why is that it's normal it's natural
as an entrepreneur you're all doers
right you just want to go see it and go
build it and show progress right and
when you're building a product I can
show progress I can show research hey
look at my app look at this version of
this look at these cool features I can
show that I'm making progress
but our experience is most entrepreneurs
build too soon and so I'm going to talk
through what are some of the steps that
help you really vet that idea before you
build anything and why that's so
important so I'm gonna start there and
I'll jump into a few things of how you
tie the product into the go to market
because product is a part of a broader
go to market motion go through a couple
examples and then we'll wrap up but as
questions come in uh Risha or anybody
feel free to call to call them out foreign
foreign
all right
so first area here
is this is a framework that we use in
our studio as we're starting a business
an idea and this is one that spends a
lot of time it's very iterative but I
think this is Mission critical to
finding a great idea that's even worth
building a product for and so I highly
encourage you to spend time going
through a process like this there's
other Frameworks and tools out there you
know feel free to use one that makes
sense to you but let me talk you through
how we think about it and I'll give you
some of the examples and Lessons Learned
so this framework revolves around the
problem the market the customer and the
business model so I'll start with the
problem this is the first thing to do
if I see 10 entrepreneurs especially
early ones and ask them what problem are
you solving they don't have an answer
I've got this product that has this
these cool features and look at this
thing it can do or I've got this AI
blockchain crypto insert buzzword startup
startup
but they don't really understand the
problem they're solving and this is so
critical because at the end of the day
you could build the coolest Tech but if
it's not solving a problem nobody's
gonna buy it and so what does it really
mean to understand the problem you've
probably heard of the term customer
Discovery but it's a term you we use
where you're going around and you're
literally talking to potential customers
and you start that process
in an unbiased way
and you're literally just asking people
hey what are you working on you know
what's going well what are some of the
projects you're doing you know what
challenges do you have
um oh you have this challenge here you
know tell me more just lots of why
questions going deeper and really
understanding some of the things like
how often does it happen man this
happens every day and and we have to
deal with it we're like yeah this
happened you know several months ago
like how frequent is the problem
then I like to look at
what do they do about it
they'll be going through those saying
this is the problem well what did you do
about it oh well it happens all the time
you know we just let it go and do it the
next day or it's like man we're up till
three in the morning trying to fix it
because it's Mission critical for our customers
customers
and so you're looking for some of those
signs of a problem that's frequent
that they're already trying to solve and
I think that's an important one is to me
if they're not already trying to solve
it it's probably not a big problem
there's a lot of things in life that are
what I call annoyances
they're an annoyance but not worth my
time to do something about it versus a
problem that somebody's already trying
to solve is a great sign that it's a
real must-have problem
and so as you find that it's something
they're already trying to solve I don't
care if they're trying to solve it with
pencil and paper or an Excel spreadsheet
or a phone call or Post-it notes the
level of tech doesn't matter but it's
the fact that they're already trying to
do something and so that leads to
another set of questions you ask well
well tell me more about what your
solution is you know why do you use
Post-it notes why does that work why
does that not work why do you use an
Excel sheet did you ever look at
software to try and solve this or tools
out there yes oh well what did you look
at what did you like what did you not
like why did you purchase it you know
yes or no if you used it you know how
was the experience right or like why did
you never even look to try and solve the
problem so lots of questions really
around the problem
in in the last piece I'll say on the
problem is
something that's mentioned unprompted
and you hear from multiple people and so
what this means is that there's a lot of
biasing you can do in the customer
Discovery process
I can go say hey Risha you know it is
such and such a problem and she may say
yes but I've already biased her by
asking her about that specific problem
versus I ask her hey Risha what are you
working on you know what are some of the
challenges and she mentioned something
and then I talked to Denise and Bob and
Michael and they all say the same things
unprompted those are all great signs
that I'm on to a problem
this must have Mission critical part of
their everyday life and workflow
and as I'm doing this problem customer
Discovery if you've noticed I haven't
mentioned anything about pitching a
potential solution or building a product
I'm just talking to potential customers
about what their problems are and
looking for some of those ones that are
must-have and that are mentioned across
multiple folks
so that's sort of the the problem area
the next area is on the market so I'm
starting to feel like I understand
there's a problem around you know this
this this theme well now let me move
into a little bit of some of the market research
research
so what does this mean one of my
favorite tricks to do is just go Google
some keywords about what the problem
you're thinking of and see what pops up
sometimes you'll see a list of 10
competitors all pop up great go look at
each of their websites how do they
describe the product or what they're
doing what's their problem you can
probably view demos online do you notice
some commonalities or differences is
there a white space does it look already
saturated or you start searching some
keywords and nothing comes up that's
relevant hey maybe this is a brand new
market or opportunity uh to go do
something so you can do some things like that
that
and then there's some tricks around just understanding
understanding
this Market where has it been and where
is it's going like if I look back
what sort of happened in the last you
know five to ten years on this space
what's happening today you can read some
industry articles or you know folks who
are experts in their blogs or thought
pieces and then where do I believe it's going
going
um because one of the things around the
market is I see a mistake I see a lot
entrepreneurs make is they build
something that could be a great business
but it's just a small Market or a market
that doesn't have these what I call
external Tailwinds to grow and you can
build a great business in that but your
upside is capped and it takes just as
much time or effort to build a small
business as a big business
and so I encourage folks to spend the
time when you understand the problem how
big is this problem not just today but
how big could it be in five to ten years
from now because you could be in a
little small Niche that has an
opportunity to expand over the next five
to ten years
or you could be in something that's
already got some Tailwinds in growing
and so one of the things I like to look
for you know we use in our studio is the
concept that what is something that five
to ten years from now it's a no-brainer
it's going to happen but it just hasn't
happened yet today for certain reasons
whether it's regulatory or consumer
sentiment or the product Tech's not
quite there yet and so looking for some
of those signs that this Market could be
a good one to get and that has some of
those external Tailwinds you know it's
like take
um you know nobody could have predicted
covid but obviously remote work was
happening before covet
but when those Tailwinds kicked in it
really accelerated a lot of remote work
things right or you know obviously the
the rise of the internet you know 20
something years ago or smartphones 10
years ago there were those external
Tailwinds that accelerated something
that was already starting to happen so I
look for some of those and then lastly
around the market I think through
how am I going to be positioned in the
market to win versus competitors and so
I care less about what they're doing but
more about where am I going to be
positioned am I targeting a different
customer segment
um is my product going to uniquely do
something different that theirs doesn't
do what is my competitive advantage and
there could be lots of reasons why but
what is my advantage going to be
so and there's an iterative process
there like I might start doing some
market research and have to go back to
the problem
but now or I've I've got a good handle
the problem
I've got an understanding this could be
a good Market to be in the next thing I
go to uh is down on the customer side
well now I'm going back to some of those
same people I've started the customer
Discovery with
and really diving deeper into
now tell me a little bit more about so
you've tried this problem before and
this didn't work why this what about
something like this now you start
introducing some potential Solutions or
ideas to see how they react to the
importance of that solving the problem
and again I'm looking for consistency to
the point where I've got a unique Target customer
customer
and a Target customer is not it's for
everybody a Target customer is very
specific go as niche as you can on
whether it's demographic psychographics
geography you know stage what how
specifically can you identify a Target
customer that's got one problem that you
can deliver 10x better
and so this stage of the process is
really honing in on I got this problem
in Market but like how do I really hone
in and focus on this customer and this
problem to know how to go build the
first version of the product and so I
still built nothing at this stage
one way I know that I've now as I'm in
the customer stage I'm looking for what
I call authentic demand and that's a
term that you've probably heard from
from folks before but one way I think
about authentic demand is
people are already leaning and ready for
this problem to be solved so when you're
talking to customers and this is an art
versus a science
you're asking lots of questions and I've
been on those those customer Discovery
calls where I'm asking questions and
they're literally just answering my
question yes oh that's an issue yeah we
have that yeah that sounds great
and they're not really leaning in versus
there are others they're asking
questions like when is this ready how
much can I buy uh you know work where is
this available at and so you're looking
for some of those signs of authentic
demand that they're leaning into those conversations
conversations
then once I've found that then I go do
some product mock-ups
and this is still not building a product
no development
and based on your capability it could be
a drawing on pencil and paper or
PowerPoint of what it could look like
you could use a tool like figma or
something else you could do some no code
Solutions depending on your but it's not
something that's working it's something
to show them this is what it could do
and to me the number one true sign of
authentic demand is if you show them
something like that they say yes let's
go build this together
and so when you have authentic demand
you will have customers that will buy or
sign up or degree to partner to build it
with you because they know whatever
you're doing is better than what they're
doing today
and they want to be a part of helping
you build that because that makes a
difference uh in how it can impact you
know their business and so now I get to
this point where I've got three to five
customers leaning in that say Hey I want
to build this with you and I'll talk to
some more later about how to
specifically do that but they're what I
call development Partners they will pay
for the product before it's built
because they want to build it with you
and so now you've got the signs of I've
got a problem I feel good about the
market in my point there I've got
customers willing to lean in now let me
go do one more thing before I start
building and that's that we're on the
right is some of the business model side right
right
and so all this means is just now
starting to map out hey if this works
like I think it's going to work what
could this be right hey I think I could
charge people a hundred dollars a month
and I think it would cost me ten dollars
a month to make the product all right
there's some some margin there and I may
need some tech folks or some marketing
folks and all right this would start to
break even when I get to you know uh X
number of units sold or or you know a
million dollars in Revenue whatever me
and you're just doing some of that math
because there's been times where based
on these customer conversations that are
leaning in they're like oh yeah man yeah
we'd love to to use that but the price
they're willing to pay let's just say
ten dollars a month and it costs you
fifty dollars a month all right that's
not an economic equation that's going to
work or scale up and so there's some
revisions that may need to happen there
and these are all assumptions
every financial model I've ever built is wrong
wrong
that's okay that's normal but you're
trying to test what assumptions are
going to matter and does this make sense
and am I happy with the outcome If This
Were to be successful because as we all
know it's hard to build a business
um and most don't succeed but you want
to make sure that if it does succeed
you're building something that's that's
going to be a good outcome uh for for
you and your team so you keep going
through this cycle uh and iterating
through problem Market customer and
business model and this is all
pre-building the product but if you do
this right you will be that much more
confident in the problem you're solving
in the authentic demand in the customers
ready and it will help you build a
better product
80 to 90 of the features you build in
your first product are going to be
wasted I know from experience that's
just how it is right you think you want
all these they want all these things and
they'll tell you they want all these
things but it's most waste but as you go
through this process and build with
folks you'll have much better success at
being efficient in what you're building
uh and how you're building so let me
pause here on this framework but I think
this is important I know some stuff in
the chat here let me pull that up uh and
see a few ones here
so 80 um and I can run through this for you
you um
um
one question that we have is what if the
problem is already solved by someone
else and you're just trying to sell your own
so what if the product is already solved
by somebody else and you're trying to
sell your own
so I would go deeper into that statement
and so I would push
how do you challenge that statement and
so if I go back to the the framework I
talked about here on the market side
part of the market side of the framework
is back to that why am I going to be
different than competitors
and you have to believe you have a
competitive differentiation versus those
it could be I have a better product it
could be I have a better location it
could be I have you know a Services
component that makes a difference it
could be I'm targeting a different
customer segment right there's plenty of
products out there that like hey there's
this big I take a CRM you know
Salesforce has these massive crms for
big companies and they do all these
great things right but there's a lot of
small niches
that need just a basic CRM and so yes a
CRM is already built and out there but
you're targeting a different segment
with that
and so one of the things I would
encourage you to do there is what is
going to be your differentiation because
if you're the same as everybody else
it's a hard slog to move forward
but why am I going to be different and
find either a different Target customer
segment or a different geography or a
different product feature something that
makes you different and helps you
compete and be different uh than what's
out there
good question thanks A.T
um another question we have is what are
some Industries you don't advise getting into
into
that's a loaded question
um yeah I'd first answer that with one
of the most important things I think for
entrepreneurs to do is find a space
you're passionate about
could be Health Care could be fintech
could be supply chain could be climate
change doesn't matter but the point is
when you find a space you're passionate
about my experiences those entrepreneurs
are that much more motivated to spend
the time deal with all the ups and downs
and really care about solving problems
in that space
the entrepreneurs I see who just go
after an idea I think could be a big
business tend to wash out much more than
those who are truly passionate about the
space because this is hard and it's a
long journey this is a you know
seven to ten year commitment of your
life if you go build a business into
something so you want to make sure it's
something you're passionate about so I
would encourage you first whether you
think it's a good industry or not uh you
know find something you're passionate
about and or have expertise in or want
to build expertise in
um but specifically to the industry
function you know some Industries are
different right I mean there are some
that Hardware plus software or you know
Hardware in general is hard right you
got to constantly build units and push units
units
um businesses where you have a lot of
one-time Revenue you go sell a deal and
then the next year you got to go sell
the same deal versus something that's on
a recurring or subscription I think
recurring subscription type businesses
are easier to scale up once you get
those going
um you know there are certain industries
where just the the margins are low or
the customers don't have much money to
spend versus an industry where they have
more money to spend or the customers
feel that that pain or demand so you
know but even within any industry
um as part of this framework you're
looking for problems or niches where
it's real and must have and you can find
a good one but I would say the passion
is more important than finding a good or
bad this this framework will help you
figure out if it's good or bad based on
where you're going after but find the
space you're passionate about and start there
there
banks at
um we have a few more questions but I
wanted to kind of tease them first and
you let me know whether you're going to
tackle it later okay now so one talks about
about
um kind of finding a technical team and
possibility of that I don't know if
you're attacking that later as well and
the other one is about
um business idea protection
um tied to market research and whether
or not you're going to tackle that later
or you want to talk I'll I'll tackle the
mail I'll tackle them now
um so on the on the technical side you
know Founders run the gamut right from
those that are fully Technical and can
do their own coding to folks who have no
idea what a coding language means right
and that's normal
you will over time if you build the
business need some technical capabilities
capabilities
the good news in today's world as I
mentioned like with figma or some of the
no code tools there's a lot of tools out
there that you actually don't need to
have deep technical expertise to start
an early version that you can show people
people
and move through some of these steps so
I don't think it's a requirement as big
a requirement as people think out of the
gates I can do all of this research
right here in the framework in customer
conversations with zero technical ability
ability
and then as you start moving forward and
building something yes you may need some
technical side right
now there's different flavors of that
some folks find like a technical advisor
that's kind of there just to help them
think through it and work through it
some folks find a technical co-founder
uh that they trust and can help build
with them
some folks use like an agency or
development shop to go get a first
version out there some folks hire some
you know Junior programmers at Georgia
State or Georgia Tech to go get a first
person out there there's plenty of ways
to do that but one thing I will say as a
founder you want to be conversant in the
language what I mean by that is you need
to know enough about tech to be
dangerous to be able to ask the right
questions and so I would encourage you
to attend some events funny stuff you
can read online just to understand some
of the basics of how coding and
development technology work because
there are many horror stories of folks
who think they can just Outsource the
tech and they either have co-founder
problems or they give it to an agency
and the agency tells them it's 15 grand
and then you know a couple weeks in they
tell them oh it's gonna be another 50
Grand and then they still don't have
good code so there's lots of horror
stories that can happen if you don't
know how to ask the right questions and
you can do that like I said either
through your own knowledge which I would
encourage some but also advisors that
you can trust and Georgia State probably
has some resources I'm guessing the
folks you can talk to and can set you up
there but good question but short
long-winded way to say you don't need it
to go prove an idea
um but it will become important down the
road but one thing you can do now while
you're still
early on in your career and building
ideas is start being understanding of
how some of those things work just so
you can ask the right questions and know
how to manage it
all right and then the the other
question Risha remind me
um so the other one was market research
how do you protect your idea
um within that space while you're trying
to um tie into what you were talking
about before yeah great great questions
this is another good point I'm glad I'm
glad somebody asked this
there's different schools of stock some
people are very protective of ideas
others are very open
and here's at's you know two cents uh
for what it's worth way more
entrepreneurs are overprotective of
their idea and it doesn't matter
here's a secret
I guarantee you somebody somewhere else
in the world has the exact same idea as
you there are no unique ideas out there
somebody else is working on it and so
it's naive to think that your idea is
that special now I'll put a caveat right
if you've developed some groundbreaking
new technology that allows us to drink
sea water or something like that that's
never like that may be a little bit
different but for the vast majority of
business ideas out there somebody else
is already probably doing something like that
that
and so what does that mean I see a lot
of entrepreneurs that get bogged down
early before they even doing these steps
because they're so hesitant to talk
about their idea and so they go try and
file all these patents which is time and
money they go try and be protective so
they don't get the good feedback that
they would get by doing this process in
my experiences most of those
um are not as successful they waste a
lot of time and money on things that
don't frankly matter
um even if you have all the patents and
trademarks and stuff and I'm not saying
you you don't necessarily need to do
that but
there's still going to be lawsuits or
could be or not down the road whether
it's whether you have it or not
um so there's I I encourage folks think
about what's the bare minimum I can do
maybe file provisional patent you know
but like what's more important is
getting the feedback and if you don't if
you're not comfortable sharing the
feedback with the market and and testing
the problem you're not going to get the
feedback you need to know that you've
got the right customer segments and
authentic demand and and folks that are
leaning in and so I would encourage you
challenge any hypotheses that in very
few situations does all that stuff
matter for the vast majority of
businesses people start
we're fully open like all of our ideas
we'll share them with anybody we don't care
care
um it's all about the execution not the idea
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