Building products that don't focus on profit

Is there ever a reason to build a product that doesn’t focus on profit maximization?

I know what you’re thinking. You’re thinking I’m crazy. I get it. After all, it’s stupid to build or sell a product where you’re not focused on profit, right?

Or maybe you’re thinking that I’m going to suggest building social products – products with a social agenda (not social like Facebook, but social as in missional).

Nope, not talking about that.

First, let’s talk yearly numbers.

1. Number of people who stop by my site (in a year): 450,000

2. Number of people who come more than once: 200,000

3. Number of people who share via twitter: 15,000

4. Number of people who get email posts: 2,100

Notice the narrowing of that funnel? It starts wide and shrinks.

I don’t have exact data for the middle part of the funnel, but it goes something like this:

1. Number of slide presentations where my site is referenced (on slideshare): hundreds

2. Number of WordCamp speakers that reference my site: tens

See how the funnel keeps narrowing?

And let’s then look at the last groups.

1. Number of people who buy my ebooks: hundreds

2. Number of people who buy one-time phone calls: 40

3. Number of people who buy coaching: 20

Do you see the funnel?

It’s how I monitor engagement. I know better than to sell expensive coaching to a person who has only read a single post on my site.

So I pay attention to:

1. who visits

2. who visits more than once

3. who shares my content

4. who references my content in their content

5. who wants a lot of my content in their email

6. who buys my eBooks

7. who wants phone calls

And when I know what segment they’re in, I can evaluate if it makes sense to leave them in that segment or help them consider moving to the next one.

This is not a strategy for the hard-sell. It’s simply an awareness of this truth:

The people who will buy my most expensive offerings are the people who have invested already.

Here’s another take on it

So, might there be a reason to build/sell a product that isn’t focused on profit maximization?

I think the answer is yes.

When the product (and its purchase) allow you to leverage it as a simple way to create flow in a segmentation strategy that helps you identify those segments most ready and willing to invest greater amounts of money on your more expensive products.

I sell a $10 eBook. And I don’t do it to make money. I do it to help me isolate parts of my market that are willing to spend more than $1 with me. And that takes my audience from hundreds of thousands to hundreds. It’s a remarkably helpful segmentation

Am I crazy? What do you think?

#newproducts #productdevelopment #segmentation