How to Tell if Your New Business Idea Will Work
So last night I had a close family member come to me with an idea for an online business. And I thought it was a pretty good idea, and so I had sort of informal coaching session with this family member. And I'm not going to tell you what the market was, but it was for a membership site. Let's just pretend it was, let's say scuba diving. It wasn't scuba diving. Let's just pretend it was for an example.
And so it was an idea to create a membership site that was really very community driven. That might or might not have some content. And she wanted to know what I thought of this idea. And people come to me with all kinds of ideas just all the time. And a lot of them… some of them are good, some of them are bad, some of them are in between, some of them I'm not sure.
So this is a market that I know just this much about. Not very much about. But I went through a thought process. I walked her through a thought process of how to go about attacking this market. How to go about thinking about, and getting started. And that's when I thought you might be interested in hearing about the thought process.
So the first thing wasn't to worry about product. It wasn't to worry about list building or positioning, or anything like that. It was to research. And so we did just a little bit of research. And then I said, your marching orders, go forward and do all this research. And then you can come back to me, come back to me in a day with this research done, and we can come up with a plan from there.
And so the idea was basically, you need to know the landscape before you jump into a market. And I've been successful in a bunch of markets, and my students and clients have been successful in thousands of markets, and every market is different. Every market has different dynamics. And so we started with YouTube. And we just typed in… I'm like, give me the most common search term you could ever have for this.
And we typed it in. And we found that (we looked at the top videos), and the top videos had anywhere from 500,000 to 2,000,000 views for a single video, for a single how to do this thing in this market. Let's just pretend it was scuba diving. How to put on your scuba tank or whatever. Two million views. And I was like, okay, this is a big market. Right off the bat we know it's a big market. I exist in a market (and I do very, very well in a market) where many of the top channels get 5- or 10,000 views. And so a million views, that's a big market. So, okay, we know we've got a viable market.
So the next thing we do is just look at the top channels, and some of those top channels, and then take a look at their actual website. So just look in their little about in their channel. First, like, wow. This person, they not only have 2 million views in their videos, but they've also got 300,000 subscribers on their YouTube channel. That's impressive – it's a lot of people.
So then I click through their website. We get to their website, and the website wasn't awesome. It looked nice, but when you got to the website, you couldn't tell what's this website about. Who's it for, and what's it going to do for… This was not obvious. When you just looked at the top of the website, it wasn't obvious.
Then there were these… lots of ads, like across the bottom there's this sort of semi-transparent ad from one of these big ad networks. And then on the sidebar there's other big ads for the ad networks. And nowhere on the page was there a place to subscribe to an email list. So this tells me something right off the bat. This is one of the top people that gets the huge following on YouTube. And their website, it's by someone who doesn't know how to market. You can't tell what the website's for. They don't have a good headline. They don't have any real benefit in that top page for why you're at that website. It's got images, but you can't even tell why you're supposed to click on those images.
They're not collecting email addresses, and they're running these big, ugly ads that are really just going to torque off anybody coming to this site. They're going to hate having these ads. You can click a button to make the ad go away, but then if you load another page, the ad pops up. It's a horrible user experience, and it tells me that their revenue model… I mean, they did have some things for sale, but it was hard to find the things for sale. There are images. It was a horrible sales process. They're not collecting leads, they're not collecting email opt ins.
So that means they're being driven just by ads. By ad revenue. And ad revenue, especially from ad networks these days, it's almost impossible to make a living doing that. I mean, five years ago, 10 years ago you could do that. Nowadays you can't. So then I went, so basically this is a market that gets lots of traffic, lots of interest, but one of the top players here in terms of a YouTube channel. It's like almost a hobby for them.
Then you go and look back, and I don't know, they've done 20 million views on this channel. So rough rule of thumb, I think these days is you can make about $2,000 in YouTube ad revenue per million views. So if this person's got 20 million views, maybe they've made $40,000, but their channel's five years old. So over five years, they've made about $40,000. It's not horrible, but it's still, we're looking at probably more or less a hobby channel. Right?
And so this is just looking at one channel. So what I told my family member here is, you've got to do this for the top 20 channels. Look at the top 20 YouTube channels. Then go find the top 20 forums. Then go find the top 20 Facebook groups. And then the top 20 Instagram channels. And maybe Pinterest. Every market is different. So where people hang out is different.
So in this market, those channels that had 300,000 YouTube subscribers, they only had 30,000 Instagram subscribers. So that tells me right there, this is not an Instagram market, this is a YouTube market. Different markets are different. So your market's going to be different.
And so then, go to the forums. Look at the forums and find out, assuming… not all markets, not all niches have forums, but many do. If there is a forum, go there and see what the sticky topics are. See what the hot topics are. You can sort in most forum softwares to see which threads had the most views. Which threads had the most replies. So that can start to tell you about the really hot topics in that market.
Then you want to go find out if there are people that really know how to market in whatever this niche is, that are selling stuff effectively. So go do some searches on Google, and find the top 20 sites that are listed and do that same analysis. Go there and see – are they collecting email addresses? If they're not collecting email addresses, unless it's a pure eCommerce play, then they don't really have a business. They don't know what they're doing. Anyone who's serious in this business is making serious effort to collect email addresses and build an email list.
Join the email list, set up a special email address that does nothing but… You set up a new Google email address. Go to Gmail, set up a new email address, and just join every list you can. And watch what they're sending in terms of emails. Watch who they're promoting. Figure out where their revenue is.
So really, I'm going through a lot here. And I know I'm spending a lot of time doing this. If this is useful, let me know in the comments, and maybe I'll do another video on the next step behind this. But this is what we're talking about, is some forensic intelligence. Some covert intelligence. But learning about your market – it's learning about the size of it. It's learning about the hot buttons. It's learning about the revenue channels. It's learning about the relative marketing skill of the players in your market.
So this is the first step in starting this business. It's not about right now what product you should get. It's not about how to build a list. It's not about how to build your authority and your positioning, it's about figuring out what the playing field looks like. Who are the players? How are they running their businesses? Are they making money? Are they people that could possibly be partners? Is this a market that's driven by advertising? Is it a market that's driven by joint ventures? These are the things you need to figure out before you can go anywhere. And it will inform everything you do in your business. Right down to whether you should start your business or not.
So, I know I covered a lot of ground. You can watch it again. Like I said, if you're interested in this type of video, if you're interested in what are the next steps beyond that… scroll down, leave a comment for me, and let's go get ‘em this week.