From: alexhormozi
If you’re looking to start a business but feel broke or unsure where to begin, a structured approach can help you define your business, identify your target audience, determine how to serve them, and craft a message to attract your first customers [00:00:00]. This five-part framework, with two bonuses, aims to guide you to make your first dollar [00:00:31].
Step 1: What is Your Business? (The Three Ps Framework)
Most businesses originate from one of three “Ps” [00:00:43]:
- Pain [00:00:49]
- This refers to something you’ve personally experienced and had to overcome [00:00:52].
- Example: A friend with nine kids developed a system for efficiently preparing their daily lunches, which became the foundation of a potential business [00:01:04]. If you can solve a problem you’ve faced, that’s a starting point [00:01:28].
- Profession [00:01:30]
- This is based on your current or past day job skills [00:01:33].
- Example: A registered dietitian learned a complex insurance billing system at a hospital due to long hours. She then quit her job and started teaching other dietitians how to bill insurance, turning her professional skill into a business earning almost a million dollars a year [00:01:37]. Any professional skill can be leveraged as a consultant, independent contractor, or by teaching others [00:02:42]. Solving a very specific problem is a business [00:02:10].
- Passion [00:02:54]
- These are subjects you’re inherently interested in, the articles you read, YouTube videos you watch, or podcasts you listen to in your spare time [00:03:00].
- Example: The speaker was deeply interested in fitness, reading related blogs daily. Friends even offered to front him money to start a gym because of his obsession [00:03:09].
“If you solve one very specific problem for somebody that is a business” [00:02:10]
Overcoming Initial Beliefs: The “Best Bad Idea”
It’s a common misconception that you need to pick the “perfect” business idea on the first try [00:03:51]. The reality is that choosing any idea is the crucial first step, as it initiates an iteration process based on feedback [00:04:06]. The goal is to get your “best bad idea” out there as quickly as possible, then refine it over time to make it “less wrong” until it becomes a good idea [00:04:17].
Step 2: Who Are You Going to Serve?
Once you have your “What,” the next step is identifying your “Who” [00:04:45]. There are three categories of people to serve:
- People like you [00:05:25]
- You know their pains and aspirations because you’ve experienced them yourself [00:07:12].
- Example: Sara Blakely created Spanx because she couldn’t find underwear that met her personal needs, eventually building a billion-dollar business [00:05:31]. This approach often leads to “missionary” businesses, driven by a genuine desire to help and improve the customer’s experience [00:07:34].
- People you’ve helped before [00:05:50]
- This could be formally or informally, even if you weren’t paid [00:05:57].
- Example: The speaker made his first dollar when a woman at the gym, seeking fitness advice, spontaneously paid him $100 after he helped her with food and recipes [00:06:01].
- Underserved markets [00:05:07]
- This is a more formal market analysis, looking for growing markets with high demand and unmet needs [00:05:09].
Narrowing Down Your Avatar
To clearly define your target audience, consider these five “frames” and select at least three to narrow down your “who” [00:08:18]:
- Age [00:08:26]
- Gender [00:08:26]
- Profession [00:08:26]
- Problems/Pains [00:08:32]
- Interests/Passions [00:08:34]
Example: “35-year-old male accountants who are bored at their jobs” [00:09:00]. Example: “45-year-old women who are struggling to move up in the workplace” [00:09:38].
The goal is to be narrow enough that when you describe them, they immediately feel you’re talking directly to them [00:09:49].
Overcoming Initial Beliefs: Specificity and Price
A common belief is that being too narrow limits your earning potential [00:09:54]. However, the more specific your target audience, the more you can charge [00:10:00].
- Broad time management PDF: $19 [00:10:09]
- Time management for salespeople: $199 [00:10:22]
- Time management for outbound salespeople: $1,999 [00:10:30]
- Outbound time management system for garden and power tools sales: $10,000 [00:10:41]
Being highly specific creates a “blue ocean” where you have almost no competitors, allowing you to set your price [00:11:15].
Step 3: How to Serve Them? (Upside & Downside)
This step involves understanding what your solution offers, both positively and negatively.
How Part 1: The Upside (Good Stuff)
Describe all the positive outcomes and experiences your clients will achieve or avoid by using your product or service [00:12:01]:
- How much easier their lives will be [00:12:13].
- How guaranteed the outcome is [00:12:18].
- How much faster they will get what they want [00:12:24].
- How it would feel to experience their dream scenario [00:12:28].
This aligns with the four elements of the value equation: easy, guaranteed, immediate, and exactly what they want [00:12:35].
How Part 2: The Downside (Bad Stuff to Avoid)
Motivation fundamentally stems from either gaining something desired or avoiding something hated [00:13:39]. This part focuses on the pain, sacrifice, and suffering your solution helps them avoid [00:14:51]:
- Risks they will avoid [00:14:59].
- The slowness they won’t experience [00:15:04].
- The pain, sacrifice, and suffering they won’t have to endure to achieve their desired benefit [00:15:11].
Specifically, address:
- Good things they would normally have to give up (but won’t with your system) [00:15:44].
- Bad things they would normally have to start doing (but won’t with your system) [00:15:50].
“You want them to be like, ‘I can’t believe they know this about me,’ because you know it about you and you just describe it back to them.” [00:14:43]
How to Gather This Information: The “Three-Letter Method”
If you haven’t personally experienced the pains, the best way to gather this information is to ASK [00:16:51]. Conduct interviews with your target audience:
- What problems are they struggling with? [00:17:10]
- How long have they struggled? [00:17:11]
- What makes it painful? [00:17:12]
- Describe their ideal experience if it were done right [00:17:18].
- What good things do they have to stop doing that they don’t want to? [00:17:21]
- What bad things have they had to start doing with past solutions that they hate? [00:17:25]
The answers to these questions will inform both the “good stuff” and “bad stuff” you’re going to address [00:17:39].
Step 4: Putting It All Together (The “Osim Money Mad Lib”)
Combine the “Who,” “Good Stuff,” and “Bad Stuff” into a concise statement:
“I help [Who] get [Good Stuff] without [Bad Stuff] through [Unique Mechanism - optional, see Bonus 1].” [00:18:01]
- Example (basic): “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]
- Example (more advanced): “I help non-fiction business authors get on the Wall Street Journal bestseller list without looking cringe.” [00:19:04]
This sentence helps your target audience immediately recognize you’re talking to them and addressing their specific needs and desires [00:19:22].
Bonus 1: The Unique Mechanism
A unique mechanism differentiates your solution from others in the market [00:19:49]. This is your “special sauce” that makes prospects believe your process is the missing piece to their success [00:20:27].
It typically takes the form of:
- A checklist: A list of things someone has to do to achieve a result [00:21:10].
- A sequence of steps: A specific order of actions to follow [00:21:26].
You then “wrap” this process and give it a name, making it your proprietary process or unique mechanism [00:21:40].
- Examples: P90X’s “muscle confusion,” Weight Watchers’ “point system” [00:22:15].
- Your example: The “five-step niche narrowing nunchuck” (referring to this video’s framework) [00:21:02].
This mechanism acts as the vehicle that takes your customers from their current state to their desired outcome [00:22:43].
Bonus 2: Getting Your First Five Customers
To acquire your first five customers, use this simple system based on the sentence you developed in Step 4 [00:23:41]:
- Greet someone (e.g., “Greetings,” “Hello”) [00:23:48].
- Mention something specific about them that’s a compliment [00:23:50].
- Insert the “I help who get good stuff without bad stuff” sentence [00:23:53].
- Ask them if they know anybody who could benefit from that [00:23:57].
Repeat this process for four hours a day or until you reach 100 people [00:24:04]. Consistently applying this warm outreach method will lead to your first customers [00:24:13].