From: alexhormozi
This article outlines a five-part framework designed to help individuals, especially those new to entrepreneurship, identify a business to start, define their target audience, determine how to serve them, and craft an initial message to acquire their first five customers [00:00:00]. This process has proven effective, with more than one out of two people starting a paid community on School.com making their first dollar [00:00:19].
The “What”: The Three Ps Framework
The foundation of determining what your business will be about is the “Three Ps Framework” [00:00:36]. Almost all businesses originate from one of these three categories [00:00:43].
1. Pain
This refers to a personal challenge or pain you have experienced and successfully overcome [00:00:49]. For example, a friend who developed an efficient system for preparing lunches for her nine children identified this personal pain point as the genesis of a potential business [00:01:06].
2. Profession
Your profession encompasses your current or past day job skills [00:01:30]. Any skill for which people exchange money in a business can be leveraged [00:02:33]. An example is a registered dietitian who, out of necessity, mastered complex insurance billing and then taught that specific skill to other dietitians, generating significant income from a very narrow solution [00:01:42].
3. Passion
Passions are topics that consistently capture your interest, such as articles you read, YouTube videos you watch, or podcasts you listen to in your free time [00:02:54]. For instance, an individual deeply interested in fitness, constantly consuming related content, was encouraged by colleagues to open a gym due to their evident obsession [00:03:09].
Don't Seek the "Perfect" Idea
It’s a common misconception that you must select the perfect business idea on the first attempt [00:03:51]. The initial choice is merely the starting point for an iteration process fueled by customer feedback [00:04:06]. The goal is to reach your “best bad idea” quickly and then refine it over time until it becomes a good idea [00:04:17].
The “Who”: Identifying Your Ideal Customer
Once you have identified your “what” using the Three Ps, the next step is to define “who” you will serve [00:04:45]. Potential target audiences fall into three categories:
1. People Like You
This is often the most effective starting point because you inherently understand their pains, demographics, aspirations, and dreams [00:05:25]. Solving a personal problem for yourself, as Sara Blakely did with Spanx, can lead to a massive business [00:05:31]. This approach fosters a “missionary” mindset, driving a deeper care for the product and customer experience [00:07:34].
2. People You’ve Helped Before
This includes individuals you’ve assisted, whether for money or as a favor [00:05:54]. The speaker’s first dollar earned came from spontaneously helping a gym acquaintance with her diet, demonstrating that informal assistance can reveal monetizable skills [00:06:01].
3. Underserved Markets
This is a more formal approach, involving identifying growing markets with unmet demand or emerging trends [00:05:07].
Refining Your Customer Avatar
To clearly define your target audience, consider five frames [00:08:18]:
- Age [00:08:26]
- Gender [00:08:26]
- Profession [00:08:26]
- Problems/Pains [00:08:31]
- Interests/Passions [00:08:34]
You should pick at least three of these to narrow down your avatar [00:08:42]. For example, “35-year-old male accountants who are bored at their jobs” [00:09:02]. The goal is to be specific enough that when you describe your customer, they feel you are speaking directly to them [00:09:49].
Narrowness Does Not Limit Income
A common belief is that narrowing your focus limits potential income by reducing the number of people you can sell to [00:09:54]. However, the more specific you are, the more you can charge [00:10:00]. For example, a general “time management” product might sell for 10,000 due to its highly specialized value [00:10:05]. Specificity reduces competition, creating a “blue ocean” market where you are the sole provider of a solution [00:11:06].
The “How”: Defining Your Solution
The “how” defines the solution you provide, encompassing both positive outcomes and avoided negatives [00:11:56].
How Part One: The Upside (Good Stuff)
This describes all the positive achievements and experiences your customer will gain by using your product or service [00:12:01]. Consider how your solution makes their lives:
- Easier: How much less effort will they expend? [00:12:13]
- Guaranteed: How certain is the desired outcome? [00:12:18]
- Faster: How quickly will they achieve their goals? [00:12:24]
- Exactly What They Want: How does it align with their ideal scenario? [00:12:28]
These four elements represent the positive aspects of the value equation [00:12:35].
How Part Two: The Downside (Bad Stuff)
This focuses on the undesirable experiences or sacrifices your solution helps the customer avoid [00:13:34]. Motivation is driven by either gaining something good or avoiding something bad [00:13:41]. You should be able to describe:
- Risks avoided: What negative consequences will they no longer face? [00:14:56]
- Slowness avoided: How does your solution prevent the slow, painful process they might otherwise experience? [00:15:02]
- Pain and sacrifice avoided: What difficult actions or beloved activities do they not have to give up or not have to start doing with your solution [00:15:11]?
How to Gather "How" Information?
If the pain is not personal, the “ask people” method is crucial [00:16:51]. Conduct interviews with potential customers by asking questions such as:
- What problems are you currently struggling with? [00:17:10]
- How long have you struggled with them, and what makes it specifically painful? [00:17:11]
- Can you describe your ideal experience if this problem were solved? [00:17:18]
- What things do you have to stop doing that you like, or start doing that you hate, when trying to solve this problem with other solutions? [00:17:21] The answers to these questions will form the basis of your “good stuff” and “bad stuff” descriptions [00:17:37].
Putting It All Together: The Business Statement
Combine all the elements into a concise statement using the “Mad Lib” formula: “I help [Who] get [Good Stuff] without [Bad Stuff] (through [Unique Mechanism])” [00:18:01].
Example: “I help 45-year-old women who just had kids get back into their high school jeans without giving up time with their family.” [00:18:54] The more specific you are, the more your target customer will recognize themselves and their needs in your message [00:19:25].
Bonus 1: The Unique Mechanism
A unique mechanism is what differentiates your solution from competitors [00:19:47]. It’s the “special sauce” that makes a prospect believe your solution is the missing piece to their success [00:20:27].
This mechanism is essentially your proprietary process, which can be presented as:
- A checklist: A list of things someone must do to achieve a result [00:21:10].
- A sequence of steps: A defined order of actions to follow [00:21:26].
Once formalized, you name this process, making it your distinctive method [00:21:40]. Examples include P90X’s “muscle confusion” or Weight Watchers’ “point system” [00:22:15]. This unique mechanism acts as the vehicle guiding customers from their current state to their desired outcome [00:22:42].
Bonus 2: Getting Your First Five Customers
To acquire your first five customers, implement a simple outreach system:
- Greet someone [00:23:48].
- Mention something specific about them as a compliment [00:23:50].
- Insert your combined business statement [00:23:53].
- Ask if they know anyone who could benefit from that [00:23:57].
Perform this process for four hours a day or until you reach 100 individuals [00:24:04]. Consistent application of this method will lead to securing your first five customers [00:24:13].
For further assistance and a community-driven approach to building a sustainable business model, visit school.com/games [00:24:28].