Duane Adolph
November 3, 2011, 03:36 PM
Hi Gordon,
Thanks for the detailed reply about the "Perfect" Product.
2 thoughts.
Thought #1 "Perfect" is a moving Target. It will vary greatly depending on the Needs of the individual or business.
For example, If a business needs cash fast...then the "Perfect" Product criteria would look like dramatically different to a business that is cash rich.
Thought #2
As I read over your reply...I realized that I actually see the BUSINESS itself as the PRODUCT.
So that being the case, These are the key elements of the Perfect Product/ Business for me. No specific order just thinking off the top of my head.
1. Control (A business that is ONLY an Ebay business would violate this criteria since Ebay could close down and leave you with no business. Same with some "affiliate models" people are using.)
2. Must have a Recurring Revenue: (Michael Ross mentioned that in Australia the top 3 billionaires had business with a recurring revenue model)
3. Evergreen - how long can I sell a particular product/service
4. Scalability - How quickly can I ramp up distribution and at what cost
5. A High Barrier to Entry (Think I heard Buffet refer to this as a Moat)
6. An Urgent problem - does this product/business actually provide a solution to a market pain
7. Comprehension - Do I understand this business/product or model
8. Do the numbers work - High Margins, High ROI
Thanks Gordon I had to think about that one :-> Anybody else??
Duane,
You raise a good question and I think we all should express our opinions as to what makes a PERFECT product...so I'll begin.
The product I saw being used on a ranch outside of El Paso has been around since 1955 (if memory serves). There have been over 75 million units sold (my best guess). MOST of these units to less than 100 customers, maybe a lot fewer.
Profits are made every step of the manufacturing process because the inventor of the product has ownership, a Toll Position, on everything it takes to get a completed product.
He never sees the steps, never handles the products, does NO shipping or receiving...his ONLY work part is to protect his product and to send invoices and collect checks from a few reliable, pay on time, customers.
Many, if not most, of his customers have automated reordering systems, which means he gets a check cut routinely, without fuss or muss. His customers order the product into the tens of thousands at a time, so his checks are substantial...BIG checks coming from dozens of customers every month.
So, what makes this one of the PERFECT PRODUCTS in my book is;
the owner simply protects his toll position, without much effort and allows the marketplace, with it's automation at work, to fulfill orders routinely...and has been around 5 decades.
What is YOUR Perfect Product Duane...and everyone else?
Gordon Alexander
Thanks for the detailed reply about the "Perfect" Product.
2 thoughts.
Thought #1 "Perfect" is a moving Target. It will vary greatly depending on the Needs of the individual or business.
For example, If a business needs cash fast...then the "Perfect" Product criteria would look like dramatically different to a business that is cash rich.
Thought #2
As I read over your reply...I realized that I actually see the BUSINESS itself as the PRODUCT.
So that being the case, These are the key elements of the Perfect Product/ Business for me. No specific order just thinking off the top of my head.
1. Control (A business that is ONLY an Ebay business would violate this criteria since Ebay could close down and leave you with no business. Same with some "affiliate models" people are using.)
2. Must have a Recurring Revenue: (Michael Ross mentioned that in Australia the top 3 billionaires had business with a recurring revenue model)
3. Evergreen - how long can I sell a particular product/service
4. Scalability - How quickly can I ramp up distribution and at what cost
5. A High Barrier to Entry (Think I heard Buffet refer to this as a Moat)
6. An Urgent problem - does this product/business actually provide a solution to a market pain
7. Comprehension - Do I understand this business/product or model
8. Do the numbers work - High Margins, High ROI
Thanks Gordon I had to think about that one :-> Anybody else??
Duane,
You raise a good question and I think we all should express our opinions as to what makes a PERFECT product...so I'll begin.
The product I saw being used on a ranch outside of El Paso has been around since 1955 (if memory serves). There have been over 75 million units sold (my best guess). MOST of these units to less than 100 customers, maybe a lot fewer.
Profits are made every step of the manufacturing process because the inventor of the product has ownership, a Toll Position, on everything it takes to get a completed product.
He never sees the steps, never handles the products, does NO shipping or receiving...his ONLY work part is to protect his product and to send invoices and collect checks from a few reliable, pay on time, customers.
Many, if not most, of his customers have automated reordering systems, which means he gets a check cut routinely, without fuss or muss. His customers order the product into the tens of thousands at a time, so his checks are substantial...BIG checks coming from dozens of customers every month.
So, what makes this one of the PERFECT PRODUCTS in my book is;
the owner simply protects his toll position, without much effort and allows the marketplace, with it's automation at work, to fulfill orders routinely...and has been around 5 decades.
What is YOUR Perfect Product Duane...and everyone else?
Gordon Alexander
