How to build a business plan – identify your audience – Edward Muscat Azzopardi of SWITCH, interviewed by Monique Chambers.
Originally recorded and broadcast by CampusFM
Full transcript of the audio is below:
Monique: So welcome to the Entrepreneur Clinic with me, Monique chambers. This is the series on setting up your own business and launching new products. This week, my guest is Edward Muscat Azzopardi, the director of brand strategy, at Switch, Design and Brand Strategy. This week, we’re going to be discussing how to identify your audience.
Welcome Ed. So we’ve discussed with the previous guests about having a good idea, and actually how to protect that idea. But now how do you identify who’s going to buy your product or your service?
Edward: Identifying who is going to buy your product or service is essentially identifying your audience, like nowing who you’re talking to.
Edward: An audience needs a story or a story needs an audience, whichever way you’d like to see it’s one of the same thing. And I think in the case of you having a product or service that you want to sell to an audience, the first thing you’d want to do is figure out the story forget the product. So if you’ve come up with a product, if you’ve come up with a service, that means you’ve spotted a gap, you’ve seen that there’s a need for something, you’ve seen that somewhere, somehow someone is facing a situation where your product, your service, your idea would make this person’s life a little bit better.
So your product is your story. Your product is what you want to speak about is what you want people to want to wish for, to set around in their pockets for loose change to buy. That’s all it takes. I think identifying your audience would start with really doing a good soul search about your product. And normally that soul search could put you in a bit of an awkward situation. Because you would find yourself looking at what you’ve done and wondering whether it’s the right thing. Have I been talking to myself? Have I created a product that is extremely interesting and appealing to me and maybe a couple of my friends? Or is it something that a lot of people would want. And so this is where we typically say: do your research, figure it out. And your research would ideally be done in a way that’s relatively random, where you cast a wider net and the wider net is initially random. So when you are looking for an audience, you don’t want to waste time shouting from the rooftops and hoping that people will listen. You want to have a narrow audience so you can tune your story to that audience. And you can save time and money and effort by speaking to them directly in a voice that appreciates, in a way that understand, in a way that really motivate them to get up and do what it takes to actively purchase a product.
So to do that, I know it might sound like a bit of a paradox you have to cast a wider net because you have to go to what is essentially a random sample of the population and ask the right questions ideally from an unbiased to see who your first of all to see whether your product is actually relevant. In a way it is a little bit better to have it as appointment early on in the process
and figure out that maybe I don’t have such a large audience after all, then put a lot of money and time and effort into something that doesn’t actually have such a broad audience we’ve seen this happen. So you could approach finding an audience in a scientific ways and actually doing the research.
Monique: So do you do that research is it the type of thing people come up to the clipboard when you’re walking down the high street? Or is it the research that you send out a bunch of emails to anybody or something you know your friends you know friends of friends on Facebook? How’d you choose your random audience ?
Edward: You typically have an understanding of your market in terms of how wide a net to cast. So if I have developed a product that is only useful to a Maltese audience because it’s very specific to something we do here, then I know that the maximum potential market size is 400,000 people clinging to this rock. If I have higher aspirations then that will change the way I’ll be looking at an audience. But the mechanism to answer your question is in should I go off with clipboards, or should I send emails will depend initially on the total potential size of your market.
Edward: And then it depends on the amount of money you have available to throw at it, and how clever you are at doing it. Because we’ve seen cases where research has happened by packaging the question in a way that’s so interesting that people take that and spread it. So you could create viral research, we’d say we ask a question and package it in a very clever story. So the first bit of storytelling comes around the research question itself, and try and find a way of going out there. Sometimes it takes more sometimes you need to motivate people by using little carrots to say, do this, give me an answer, and you could possibly win or whatever. But the thing is, what you would like to do is go there and make the process as random as possible. Speaking to your Facebook friends for example.
Facebook tends to be a very local network, unlike Twitter, and Instagram and a lot of these other networks that are really global where the people you follow could be people don’t even know, they could come from all corners of the earth, Facebook tends to be a bit more insular, it tends to have 90% of your friends on Facebook could live in the same country, or anywhere else in the same city.
So again, you need to use mechanisms to make sure that your questions do go out there and reach the right people. And even designing the research itself should be given to someone who isn’t biased by your love for your product.
Monique: Or you. [Laughs]
Edward: Or you exactly. [Laughs] The results of the research are increasingly showing that demographics are a bit of a thing of the past as well.
Monique: Okay, so that’s something that we have heavily relied on in the past, you know, six foot men would always buy certain colored jeans and watch a certain kind of game instead. And now this is no longer the case.
Edward: It has become much harder to rely on demographics and that’s probably a good thing. Because the more people are connected, the more people are being exposed to the same story, irrespective of whether they want it or not. And that’s the model of your social feeds.
You can separate people into what would motivate them, you could separate people by what stories they like reading, what would make them change their behavior. And there’s very little to differentiate between, I don’t know, my mother and I, and certain practices or so to me to be more interesting to analyze my audience, by motivation, by sort of what in the past, we used to call psychographic profiling. But even that’s a bit of out dated term, what we’re looking at is the ability of the storyteller at this point, I keep saying story, because we’re looking at an audience and the audience is basically the recipient of my story. My story is my product. So when I say story I’m speaking about so I’m actually speaking about the product and all the bits around the product, what is the product, what are its features in what does it do? And what are its benefits? As in what can I do for me? How can I make my life a little bit better?
Now, the recipient of all this is ideally someone who will be motivated by it. So I should be in a position to reach those people who are interesting to me without bothering the people who aren’t without wasting time, money, and effort. And the people who aren’t.
Monique: Yes, you can tell by the number of emails you get in your inbox that you actually don’t answer how many people are actually wasting their time on you.
Edward: Exactly. That’s a way of looking at it. Although typically, you’ve shown a little bit of interest.
Monique: Unless they bought your name from some lists. [Laughs]
Edward: For a long time, that was an acceptable way of going about casting a very wide net. And they were nasty practices, buying lists, random people. The world has figured out that it’s not entirely successful. It’s much more interesting to have a smaller audience that makes a lot of sense, and a larger audience that you’re annoying.
So going back to what were referring to as research finding the audience would depend on going out there, figuring out who would possibly be interested, and then using any number of methods
to guess, or estimate the size of that audience. Now, all of this could be rubbished by the principle that you could create something that people didn’t know they wanted.
Monique: Bit like Facebook.
Edward: Exactly. This is a very good example of this, and many other products. Sometimes a product just lands and everyone is enchanted by it. And no amount of research beforehand could tell the world that yet there is a massive market for it. So if you’re so convinced that your product is brilliant, and revolutionary, then just be a maverick, go ahead and tell the story to as many people as possible or get people interested and find a clever way of making them tell your story. And that’s probably a better strategy. That’s probably the smartest message if you look back at Google, Facebook, a lot of a lot of Apple devices, a lot of products that we buy even though we don’t know why we want them or whether we need them. They are typically not based on research, there’s typically based on a very strong gut feeling by someone who knew they could design the product, put it on the market. And this would cause a stir.
Monique: And almost too embarrassed to have the previous model, even though the previous model may only be one year old. He’s like, you have to have the new one.
Edward: Yeah, let’s take that back to the very first product in this category, though. Before the iPhone, for example, there were a lot of smart-ish devices and then the iPhone came about and changed the way we thought of phones because someone decided that we need to have email on our phones, or we need to have a camera on our phones, and engineers decide what they would want and then impose it on the rest of us. And then every subsequent model could be based on research, could be based on Okay, do people want incremental improvement, the very first one is typically based on guts not the research and is based on the rock solid knowledge of what I’m doing will sell, what I’m doing will create a change in the market. And large number of these products come about as a result of two or three clever guys in a room, come about as a result of a very powerful startup that starts off in a tiny little bedroom somewhere, I think of Angry Birds, they new knew that people will be tossing beds on a smartphone before people thought they wanted to toss birds on a smartphone. They didn’t go out to the market and say: Is there anyone interested in? No, they created it. And a few years later, they sold for the GDP of a wealthy country.
Monique: It’s annoying, I wish to have that idea. And that gut feel.
Edward: Exactly. So especially with small companies that are still figuring out where they want to go, and whether they’re doing the right thing. I think the best examples for these people would come from a mix of examples that came from research and the mix of examples of came from gut. Just a powerful motivator to pursue what they know to be right and put it out there.
Monique: You just told me an interesting story before we were on air, but I think it would be good for the listeners to hear about Henry Ford.
Edward: Yeah when he was asked why he produced the Model T that was really revolutionary, because was mass produced know, not because it was the best vehicle ever, asked whether he’d have known the market would exists for that kind of device. He said, If I would have asked the markets they would have said that they wanted a faster horse, because the only thing they had at the moment as a form of transport was a horse and cart. So if you go to a market and say, What would you like in terms of the next iteration of transportation, they would say, a big horse, a faster horse, a lighter cart, but no one would say mass produced vehicle that’s based on an internal combustion engine. So he knew that would work. He had the gut feeling that yes, this will work. People will buy this.
Monique: And they did.
You’re listening to entrepreneur clinic on campus FM, with me Monique Chambers. And my guest this week is Edward Muscat Azzopardi. That’s a party from Switch, we are discussing how to build a business plan specifically how to identify your audience.
Monique: So how do you quantify the number of products, the number stories you need? So how do you put a number on it? How many do you produce?
Edward: Okay, so even if we look at the word product and the way we define it, a lot of what today you could consider product doesn’t have real inventory. We mentioned Angry Birds, we mentioned Google, we mentioned a number of things. For most of these, there’s no number of products that you are going to share.
Monique: Just service based essentially.
Edward: Yes. You will need to understand scalability because if your service or product is going out to a number of people and you need to service it, you need to have people there to fix it if it breaks, then it will make a difference if this if you’re serving a 100 people or 100,000, but you can scale up everything and your business model have to be scalable.
And the same applies for manufacturing, we tend to look at numbers in manufacturing in a way that’s a little bit different. Because there’s always a way of scaling up of manufacturing more, producing in a very sort of contemporary modern, that allows us to scale up and down as and when we need it. Luckily, if your product goes from something you cook up in the kitchen to something that you are selling by the millions, I think the least of your problems would be
figuring out how many to produce initially. What’s more interesting is how many people could I convince them they need it?
Monique: And how do you go about working that out. So how do you go about executing that.
Edward: The best way of doing is telling the story I think, is wrapping up whatever it is your product or service and packaging it in a way that people will be interested to hear what you have to hear. So here’s this object, service, whatever and it’s been designed to make your life better in this way. If that resonates, if that makes me feel like I absolutely need it, I gotta buy it.
If it goes a step further, if it makes me think I absolutely need this and everyone around me ought to have one or ought to do this or ought to play the game or install the software or buy these shoes or whatever it is, then I will become an ambassador of your story. I’ll take it as my own and that makes it much easier for companies today to tell their story to a wider audience to convince many more people to buy their product than they would have afforded to a while ago and we’ve gone from the 60s when it placed an ad from Primetime TV three times and reach 80% of your audience so essentially if I have enough money to place my ad on TV three times 80% of the population knows about my product, they’ll buy it.
Give me more money to put into more TV and just create the emphasizing industrial complex and then the whole thing became very distributed and became noisy and chaotic.
Monique: Too many TV stations too many products .
Edward: Exactly. A rubbish first version of the internet this was an extension of a billboard and an extension of the shop window, now people use the internet spectacularly poorly actually.
Now the way it works is it’s very much about a large compensation. So if I manage to appeal to the right people and get them to own that one story they will tell it to others, and they will convince others and they will sign up to my tribe and form part of my brand ambassadorship or stewardship, or whatever you could call it. So if a lot of effort is focused initially on creating a clever story and creating a clever hook, on creating a way in which I will convert as many people to the church of my product as I can initially, then I stand a better chance of it going out there. It has to be backed by a good product is has to be backed by a good service, mostly.
Monique: Yes. Otherwise, the story will turn into a nightmare stories. And that will spread as fast as the good news did.
Edward: Absolutely. If my ambitions are very very short term then that’s okay. Speaking from a purely practical point of view, I’m happy selling a 100 units and getting 1000 people talk about it, and then just let it die. You could have a rubbish product, the conversation could travel enough for you to move a few units before it dies out. But I don’t think it’s a clever strategy and normally if you tend to be in business for the long term,
Monique: And then potentially wanting to sell them the next version of your product, or then the new line in a product, not necessarily.
Edward: And even then, having made a mistake in the first place is sometimes a very good opportunity to go after the break. Clever reaction to your mistake. Sometimes the first part of a story could be mildly interesting, it doesn’t go far and wide. And then a company makes a mistake and reacts to it in a way that’s brilliant.
Monique: and the audience then forgive.
Edward: Exactly and then they will want to share, look at this, this is the company you didn’t know about that created the product you didn’t know about. I made a mistake either to know about and here’s how they fixed it. And then the story spreads. And suddenly out of fixing a mistake your story goes far and wide and so how could I have previously calculated the size of my audience without knowing this would happen to me. It still goes back to the basic premise of telling a story, package your product or service in a way that would make people stop for a moment to listen. It’s a very noisy place you give you sit for a moment in one place, and you have to wait for someone for 30 seconds they haven’t got your phone. And the first thing you do is open up whatever social Feed of Your choice and suddenly there’s a barrage of stories and that barrage of stories is different. If I were to do the same thing in six hours time, it’s going to be a completely different set of stories and a bunch of them have happened to me time and I’ve missed them.
Monique: But you’re right, it’s to see the reaction of the company themselves.
Edward: Yes, and what I’m saying is that because our lives are noisy, because the social feed is so often, your story has to be remarkable for anyone to pause on it and give us a moment of their time because we are bombarded by a lot of different stories it could be people posting photos of their cats, white cats getting the way. One of a terrible example is cats and coffee, so in between photos of cats and coffee, there will be stories that matter, stories that are interesting and that’s where you have to put the effort into it to create to create an audience where there was none.
Monique: And how do you create that compelling story to reach this floating audience? ?s there a formula to go by?Is it again 50% gut feel is there some of it based on your market research and what you talk about with your mates at the pub I mean how do you create your compelling story if you don’t have in a massive budgets having spent all your money on probably protecting your idea in the first place how do you actually come up with that?
Edward: I don’t think there’s a magic formula. If there were a magic formula or a rock solid formula then stories would be even more boring than they are already. But if I were to give a guess and again this isn’t you know a scientific mix of percentages I would say you would need a dose of luck because that’s what you always need so let’s leave the dose of luck on the side; so many things could happen; so does of luck is there. You need to first of all realize that humans don’t change, we are essentially storytelling apes. All we’ve done for centuries is be motivated by stories that could change the way we think, change we behave and if you selling a product or service that’s all you’re doing you’re telling people here’s the product I’d like you to change your days story to include a need for this product
Monique: That would be wake up you check Facebook when I’m having lunch I check Facebook 10 years ago wasn’t even on you know I didn’t even know existed
Edward: Medium itself doesn’t matter that much whatever it takes to convince you that you need whatever it is so when you wake up in the morning you have a sort of circle of daily needs; I need breakfast I need to have a shower I need to wear these clothes I need to do whatever I need to do. If I manage to include that list of needs that sort of the story of your day, if I managed to include my product or service you going to think every day oh I also need product X. At some point when you have the money to, when you have the time to, or whatever you would purchase.
Monique: You’re telling yourself if I had this, yes.
Edward: Exactly. And that’s it, get to work faster. Get to work faster as a human benefit. So the first part of the story has to be a human benefit you have to remember you talk to humans. A lot of time you see product advertising that includes absolutely no human reference; that leads people cold that would fizzle out after a while. So the first thing you have to do to get story that will work will go far is to prove that there buying your product will make your world a better place.
Monique: So it’s not necessarily just about identifying your audience it’s actually identifying your story and remembering your audience is human.
Edward: Yes. Remembering that your audience is human. And then on top of that, adding to the story I think the human bit that be something that’s interesting, appeal to one form of motion, make it funny, make it sad, make it tragic, make it clever, make it crazy, but do something to stand out because there’s a lot of noise. So human emotion ideally in a way that we get your audience to take your story and spread as far and wide as they can.
Monique: Absolutely. Well, thank you very much Edward for joining us. I’ve been talking to Edward Muscat Azzopardi this week from switch.