Hopefully, I've convinced you by now that pre-sales are the key business idea validation indicator.

In this lesson, I'll drive you through my 4-step pre-selling framework.

Define a Pre-Selling Goal

The first step is to define your pre-selling goal. This is what needs to happen to consider your business idea validated.

You may be familiar with the concept of "SMART goals." This also applies to pre-selling.

Your pre-selling goal has to be specific, measurable, achievable, relevant, and time-specific. Let's dig deeper into each of these characteristics:

  • Specific → You need to be clear with yourself on what will validate or unvalidate your business idea. You don't want to leave any space for ambiguous circumstances in which you don't know whether you have achieved your goal or not.
  • Measurable → You must set a specific number of sales or revenue that will validate your idea. You can be transparent with your customers and tell them you'll only be working on the business if the goal is achieved; anyway, it's not a problem if you don't explicitly mention this.
  • Achievable → Be reasonable with the number of sales or revenue set as your goal. Don't forget pre-sales are, mainly, a way to validate your business idea, not to get a life-changing sum of money. It's impossible to define a standard number or range of sales or revenue that makes sense for a pre-selling campaign because it depends a lot on the business, industry, customer type, and product or service pricing.
  • Relevant → When using pre-sales as an idea validation indicator, the only relevant metric is the number of sales or revenue; the rest are vanity metrics. Do not add other goals into the experiment, mainly if they are related to website traffic or newsletter subscriptions. Just focus on the money.
  • Time-specific → Define a timeframe for your pre-selling experiment. If you don't achieve your established number of sales or revenue by a specific date, your idea isn't validated, and you must not move on with the development of your product or service. This doesn't mean you have to forget about that business - we'll see what you can do in these scenarios later in this lesson.

You can use the following formula to define your pre-selling goal: "If in [Time] from now I've made [Number] pre-sales, I've validated my business idea."

For example: "If in 2 weeks from now I've made $500 in pre-sales, I've validated my business idea" or "If in 1 month from now I've made 10 pre-sales, I've validated my business idea."

When pre-selling Scouth, my second business, my brother and I set the following goal: "In the following month, we have to make 3 sales."

If you're building a B2C SaaS that's sold for $10/mo, 3 sales in 1 month is probably not enough validation. Scouth, instead, is a B2B service-based business in which each sale brings over $1k in revenue.

Build a Minimum Viable Offer

The second step of the pre-selling framework is to build a Minimum Viable Offer.

This is the simplest offer you can build that's enough to make a sale. MVOs take MVPs to the next level, though their purpose is the same: to minimize the risk of the project by keeping the investment small and quickly discovering what works and what doesn't.

MVOs can take a lot of different shapes, including in increasing order of simplicity:

  • A basic functional prototype
  • A landing page
  • An explainer video
  • A mockup
  • Or even a document or email explaining the product or service

I recommend you build a landing page where you can explain the product or service and include some images or videos showing how it'll work.

Having said that, if you believe you can pre-sell your business idea with a simple email describing your product or service, you don't need to create a landing page.

Jason Quey, the founder of GrowthRamp, pre-sold $3,000 in licenses for a SaaS that tracked the ROI of content marketing, just with a Google Document and a link to PayPal.Me.

You might be thinking that it is impossible to build an explainer video or mockup if your business doesn't exist and it's just an idea. Many founders design simple layouts of how they imagine the product or service working and animate those mockups to make them look functional.

This famous demo video of Dropbox went viral and made them go from 5,000 to 75,000 subscribers overnight and it was a fake prototype.

Pre-Sell your MVO

The third step of the framework is to pre-sell your MVO.

There is an infinite number of strategies to get customers for your MVO. I won't talk about them now, as the whole section 3 of this course is about them.

Analyze The Results

The final step of the framework is to analyze the results of your pre-selling experiment when it is the deadline that you defined in your goal and make a decision.

There are four paths that you can take:

One → Move on with the development of your product or service. You can only take this path if you have achieved the goal you defined in step 1. You must stick to your goal throughout the whole pre-selling and decision-making process. Even if you almost reached the goal but did not, you don't have to go down this path.

If you:

  1. Didn't achieve your goal but almost did it.
  2. Didn't achieve your goals but you feel really optimistic about the business idea due to your discoveries throughout the pre-selling experiment.
  3. Couldn't work on the pre-selling process and want to give it another shot.
  4. Achieved the goal, but you're still unsure about your business idea.

You have to go down one of these two paths:

One → Don't do any business changes and persevere with your pre-selling experiment. You must set a new pre-selling goal instead of simply extending the timeframe of your original experiment.

Two → Re-define your value proposition, pricing model, or target customer and carry out a new pre-selling experiment. This is the way to go if, in your pre-selling process, you made any uncomfortable discoveries about your business idea.

If you:

  1. Didn't achieve your pre-selling goal and didn't find anything really positive about your business idea.
  2. Achieved your goal but don't feel like working on your business idea because of what you found out in the pre-selling process.

You have to move on with your next business idea. Explain what happened to the people who pre-ordered your product or service, if there are any, and refund them.

In the following lesson, I'll explain the different types of pre-sales that exist, which is also an essential factor to consider when defining your pre-selling experiment.