This is the summary of a book with quite a long subtitle, it is called Choose: The Single Most Important Decision Before Starting Your Business. It is written by Ryan Levesque. The book revolves around Information Technology (specifically the internet) based businesses. If we narrow down further then we can say that the book has almost all of its focus on the “Information” side of the business. This is why the author suggests starting an “education and expertise” business. Therefore this book will be more beneficial for entrepreneurs in education and expertise related niches. So, if you are thinking about starting a YouTube channel, blog, e-learning course, freelancing, etc, then the teachings from this book can help you a lot.
This summary does not cover the complete book, but only my favorite takeaway i.e. “The Five Market Must-Haves”. It is important to know your market’s must-haves because without knowing them you may end up choosing the wrong market, a market where your business is destined to fail.
But before getting straight to the Market Must-Haves, it is important to understand why you should start an internet-based business and what is so special about the education and expertise niche. We will answer both questions.
Why the Internet-based business?
The biggest advantage an internet-based business provides is the Scalability. The Internet can provide a bigger scope to even traditional businesses. For example, a physical shop selling clothes in a physical market can serve only the people around the market. The people living in the town are the only potential customers for this shop. On the other hand, an online store on an online marketplace like Amazon and Flipkart can sell its clothes to reach the whole country. The boundaries of the city do not matter to such a store.
The businesses selling non-physical goods have an even larger scope. They can sell all over the world. Businesses dealing in apps, ebooks, software, etc come into this category. As an example, have a look at the app below. It is a simple app that has a collection of wallpapers, it costs merely ₹10 and it has been downloaded 10K times. Had the creator of this app opened a physical store of games and software, do you think 10 thousand copies of anything could be sold at all?
The same is the case with services. Teaching is a service. If you look at this course, it teaches you designing PowerPoint presentations. It is sold at variable prices but so far, more than 30 thousand students have taken this course. 30 thousand is a big number. Suppose you were a person with expertise in creating PowerPoint presentations and you start a normal physical coaching class, how many students could you find that want to learn your PPT skills?
Now let’s come to our second question
Why education and expertise business?
There are a few reasons which make the education and expertise business more lucrative than other online businesses. The first reason is cost-effectiveness. When you are earning money by educating people online, then the only objective that you need to care about is – “the creation of great content”. No matter what form you are choosing, 80% of your success depends on the content. If you know how to explain things properly, you are already halfway to victory.
No matter what form of content you choose, there will be ways to create it in a cost-effective manner. For example, written content can be produced through ebooks, PDFs, blogs, or through any other medium, the cost of producing it will be almost zero. Similarly, video content can be produced by shooting or by creating presentations but the production cost will always be lesser than any other kind of business. My own YouTube channel is education-based and I do not incur any cost at producing videos, and I am earning through it.
The other benefit of education and expertise based business is that you do not need to be an expert in what you want to teach. You just have to start from the basics and as you keep learning and teaching, you will automatically start becoming a pro in your field. I personally believe that teachers only have expertise in teaching, not in their subjects. And if that is not the case then why aren’t all the teachers teaching business management in colleges are not big businessmen? If they know how to do business then why are they doing a job?
Additionally, it has been said that if you read three good books on a topic then you will become an expert when compared to 99% of the population. So it is not hard to become a pundit if you are ready to invest your time.
I believe now the base has been laid and you are ready to take the next step, i.e. understanding the 5 market must-haves. Even when the topic says “must-haves”, the author agrees that it is not necessary for you to have all the 5 factors present in your business. The business can work with only 4 or maybe 3 factors. Therefore use these “must-haves” as suggestions to consider, and not as “must-strictly-haves”.
An Evergreen Market, not a fad
On the basis of demand, markets can be divided into two categories
- Fad Market
- Evergreen Market
A fad market is the one with a short-lived demand. A new fashion of leather jacket comes, and you start observing that everyone around you is wearing the same kind of leather jackets. Suddenly you start seeing yourself as an old fashioned person because you are wearing the same old woolen sweater. Ultimately you end up buying a new and trendy leather jacket out of peer pressure. You keep wearing it for a few months and then you realize that most of the people around you are now wearing pullovers, and you start feeling out of fashion once again. So in this case, the new trend of leather jackets that came just for a few months was a Fad.
Anyone who started the business of producing leather jackets after seeing the huge demand is bound to shut his business after the fad goes away. During the same time, businesses producing formal pants and shirts would not see any fluctuations in their expected sales. Formal clothes always had the same demand and there are no signs that people will stop wearing them when the time demands it.
The same principle of evergreen market applies to the education and expertise based businesses. No matter whether you are blogging, vlogging, teaching people online, or selling ebooks, you should be creating content that remains in demand for a long period of time.
For example, more than a year ago, I created a video on the book called “Influence: The Psychology of Persuasion.” I am getting views on the videos since the day I published it. Interestingly, the number of views on the video are increasing every month.
Where are the views coming from? More than a quarter of the total views come from people who are searching for the book. It means that there is a constant demand for the book all the time and I am pretty sure that demand will keep coming. How can I be so sure? I am confident because the book was published in 1984 and is still being searched after 3 decades, so the book itself is evergreen.
Instead of this book, if I would have created a video on something new that came out to the market at that time, then the scene would have been different. Suppose I talked about a mid-range smartphone that came out that month (September 2018), then do you think people would have been equally interested in that video in 2020?
Therefore whenever you are building an information-based business, make sure that the information provided by you will stay relevant for a prolonged period. Cooking, reading, traveling, health, and fitness are some niches that will never fade away. Even the coming generations will be looking for content related to them
An Enthusiast Market, not a one-time problem-solving market
On the basis of purchasing frequency, markets can have two kinds of customers
- Customers who make a purchase just once and never come back
- Customers who purchase products again and again
Suppose you operate a business that sells house construction material. You sell cement, pipes, switchboards, construction equipment, and everything else needed to build a house. All the customers that make purchases from your store are the people whose houses are under construction. Once the house is built they do not need your products for a very long time, many of them would never come back. Therefore your sale completely relies on new customers. This is so because you are in a market where most of the customers need a one-time solution for their problems and they move on once that problem is solved. What will happen when your area does not need any more new buildings?
To avoid the above problem you need to go to the Enthusiast Market. An enthusiast market is the one where customers are very interested in a particular activity or subject. The enthusiastic customers in such a market make repeat purchases and if you can cater them then you can make money from them for a long time.
We can take the health and fitness enthusiast market as an example of an education and expertise business. People who like to stay healthy are constantly exercising, buying healthy foods and supplements, trying new apparel, accessories, and equipment. Whenever something new comes into the market, they try it. They buy new sportswear, sports footwear, as soon as the old ones are worn out. They buy health supplements every month. Most of them buy new accessories and equipment whenever a new edition comes out.
Tarun Gill is a fitness influencer. He started with a YouTube channel that educates people about building a fit body. His YouTube channel has close to a million subscribers. He also has an Amazon store that recommends what to buy and he earns commission whenever someone makes a purchase through his recommendations. Since the market is filled with enthusiastic customers, he always has the chance of selling new products again and again to his loyal followers. Since they trust his expertise, they actively seek his advice on what fitness products to buy. And not only the commission, but he earns ad revenue from the same followers when they watch his new videos. If he starts selling his own products, then I am sure that he will be able to sell them too.
He is able to do it because of his fans, but how can you get fans who want to listen to you? Keep reading and you will find out.
A Market with Urgent Problems
An evergreen market will make sure that the demand will always be there. An evergreen enthusiast market will make sure that the same customer will be making repeated purchases. Now you need to ensure that those repeated purchases are made from your business.
You can make repeated earnings from your loyal followers. To gain a loyal following, you need to go to the market with urgent problems. Imagine you have excruciating pain in your tooth. The pain is so bad that you are ready to do anything to make it go away. So you go to a dentist and the dentist says that the tooth needs to be cleaned up and the cavity has to be filled. You agree with the doctor and let him perform the procedure. After the procedure, all your pain is gone and you start feeling normal within two days.
What will be the effect of this incident on you? You will start trusting the dentist and whenever you face any dental problem, you will go straight to the same dentist. Whenever you will see someone facing dental problems, you will recommend your dentist. In this way, you became a loyal follower because he solved your urgent problem. Therefore, you need to solve people’s urgent problems to make them your followers.
In the field of education and expertise, you can solve the urgent problems of businesses. Imagine a business that sells all its products through a website, and suddenly the website starts facing some problems, it will start losing money the moment the problem starts. If you can fix the problem, the business will become your loyal follower. Freelancing can give you many such opportunities for solving urgent business problems. You can be a business analyst, a web developer, a software developer, a social media manager, all such fields face urgent business problems. Solve the urgent problems and make people your loyal followers.
You can also choose to only educate people about solving urgent business problems. Again, you can write blogs, e-books, create courses or videos topics related to urgent business problems. In this way you won’t have to do the work by yourself.
Please note that these were just a few examples. Urgent problems are not limited to businesses. You have to keep looking and you will definitely markets with urgent problems.
A Market with future problems to solve
This is a no brainer. How will your followers be useful to you if they won’t face any problem in the future? Even the construction material seller that we discussed earlier was solving people’s moderately urgent problems, but if the customers will never face any problem in the future then they will never return.
The fitness enthusiasts we talked about earlier will always have future problems. After getting the perfectly shaped biceps, they would want to work on their legs. After building muscles they would want to lose or gain some weight. They may want to work on their body fat ratio. There will be endless new objectives once they reach their previous goals.
We can say the same for the example of businesses that we discussed. There is no business that does not face any problem. As long as there will be future problems, your loyal clients will keep coming back to you and you will keep generating income from them.
A Market where your potential customers have money
When you want to buy vegetables for your home, there can be many places where you can buy them. You can buy from a hand cart pusher who will come near your home, in your locality. You can also bargain with him if you feel that the vegetables are overpriced. In the worst case, you will end up paying a few bucks more than what you would have paid in the nearby farmers market. But you should not forget that you are buying the vegetables from the comfort of your home.
The other place where you can buy vegetables is the nearest supermarket. But the prices will be higher for the same vegetables. The prices of organic vegetables can be even 2-4 times more than regular vegetables.
In the ideal scenario, nobody should buy from the supermarket due to the high prices, and the handcart pushers should be able to put the supermarkets out of business. But is it true in reality? Who do you think is making more profit? The supermarkets or the hand cart pushers?
The supermarkets keep earning profit from overpriced vegetables because they are serving affluent customers. These customers do not bargain and do not ask why the prices are high. They just want to make sure that they are getting the best quality product and they are ready to over-pay for the same.
In the field of education and expertise, if you are teaching school students, creating courses for them, or selling them something to help their studies then you have to keep your pricing according to their purchasing power. As you know students rarely earn money, their purchasing power will always be lower. Whereas if you are serving people who want to save their taxes or who are looking for investment advice then you can easily charge high fees for your advice. Such people already have the money and you are saving it for them. If they trust you then they won’t think twice before paying you.
As an example, you can find many stock market advisors on Twitter who suggest trades. While the advice they give publicly is free, you have to pay a fee to know about lucrative deals. People first try their free advice and if it works for them then they take the memberships.
These were the five factors that you should consider before entering a new market while you are trying to earn through your expertise or by educating people. But it is not necessary that all these factors should be present in your target market. Whatever business idea you have, apply these filters to assess the profitability