Earlier this week at Leto we've received a phone call about the potential investment. We were trying to raise money last year to expand our (service) business overseas. Situation changes since last summer, as we have few products that we've built in-house and promoting now, thus our investment deck that we've used is not relevant anymore.
After a brief discussion we've decided not to go ahead with it, and focus on our core business and in parallel polish and finalise our products. During that discussion we've started to brainstorm on our products, the value of these products in general, and how we can increase this value.
So getting back to the point, one of our products, tool that helps you to create proposals, at the moment is in beta stage, and we've placed the single price on it - $25 per month. To get one million US$ in sales over the year we need 3333 clients. 1,000,000.00 / 12 / 25. Simple.
The argument that my business partner had was that 3333 clients are hard to get.
Yes, it will be hard to convince 3333 people to pay for your product. It's still not impossible. There are 7 billion people out there. Forget about 6,7 billion people, as it's unlikely that they'd need it or simply won't have money to pay for it. From remaining 300 million people it will be possible to find three thousand decision makers that are willing to pay $25 per month if this tool saves them few hours to create a proposal. Even if their hour rate is $50, they would save $100 if the tool saves them 2 hours.
There are other techniques that you can use to maximise the value, such as price discrimination or offering discounts for prepayments - these can be manipulated to gain $1,000,000 in sales quicker, but I'll cover them in some other post.
With focused sales and marketing, even if there are only one million people and companies that can be considered as our potential customers - odds are still very impressive.