Grow Your Audience By Avoiding These 3 Mistakes | Ep 796

1-Page Summary

The Mistake of Launching New Products Instead of Refining the Core Offering

According to Alex Hormozi, creators often err by launching multiple new products rather than focusing on improving their primary offering. Hormozi dissects this mistake through observations and anecdotes.

Creators Sell More Products to Their Audience Instead of Perfecting Their Core Offering

Hormozi has witnessed creators with modest followings continually introduce new services, leading to dwindling audiences due to poor product quality. He notes that truly refining a product takes years of dedicated iteration. Hormozi deems simultaneously managing various products as "Entrepreneurial ADD" - a novice error that signals distraction to business-savvy individuals.

Creators Mistakenly Assume More Products Equals More Revenue

Creators often wrongly believe that adding a second, third, or more products will increase profits. However, Hormozi explains that subsequent products tend to be lower quality than the first, leading to diminished conversion rates and credibility dilution.

This Approach Usually Backfires

Hormozi warns that selling multiple products rarely boosts revenue automatically, as the second product is often second-rate. He describes a "vicious cycle" where each new, inferior product sells less than the last.

The Negative Impact on the Creator-Audience Relationship

Hormozi addresses how incessantly promoting new products can undermine the creator-audience relationship and harm the business.

Repeatedly Asking an Audience to Buy New Products Damages Trust

Creators risk losing the trust and goodwill built with their audience if they bombard them with continuous sales pitches, according to Hormozi.

Audiences Respond Better to Value and Quality Over Constant New Offers

Hormozi suggests audiences prefer value-driven content and exceptional products over a constant barrage of new offers, which can maintain audience excitement and trust.

Overextending Into Too Many Products Erodes Quality and Satisfaction

When creators overextend into too many products, quality suffers, eroding audience trust and satisfaction, Hormozi observes. This overextension can lead to cutting staff due to declining sales, harming the business and audience relationship.

Focusing on a Single, Great Product is the Better Approach

Hormozi advocates that creators should concentrate on a single product and grow its audience using a sustainable method, rather than the "launch and crash model."

Improving and Refining the Core Offering is Key

Instead of launching new products, Hormozi emphasizes that creators should sell their product to a small audience, gather feedback, refine the product, and repeat to ensure sustainable revenue growth.

Iterating and Improving One Product is More Sustainable

The podcast stresses the importance of enhancing one business or product through iteration, customer feedback, and continuous improvement as a more sustainable path than juggling several offerings.

Growing the Core Product's Audience is Preferable to Selling More to the Same People

Hormozi advises growing the audience for the core product via content, ads, partnerships, etc., rather than attempting to sell more products to the same audience. He posits that building a loyal customer base around a great product is more valuable than constantly selling new things to the same people.

1-Page Summary

Additional Materials

Clarifications

The "launch and crash model" is a business strategy where creators rapidly introduce new products without focusing on refining their core offering. This approach often leads to a cycle of launching new, inferior products that fail to sustain audience interest or generate significant revenue, ultimately causing the business to decline. It contrasts with a more sustainable strategy of concentrating on improving and growing a single, high-quality product over time to build a loyal customer base and ensure long-term success.
Sustainable revenue growth is the ability of a business to increase its income consistently over time without compromising its financial stability or core operations. It involves a balanced approach that focuses on long-term profitability and customer satisfaction while avoiding excessive risks or shortcuts. Sustainable growth often requires strategic planning, continuous improvement, and a focus on delivering value to customers to ensure lasting success. It is a key metric for assessing the health and viability of a business in the long run.
In a business context, iteration refers to the process of making small, incremental improvements to a product or service over time based on feedback and data analysis. It involves continuously refining and enhancing the offering to better meet customer needs and preferences. Iteration helps businesses adapt to changing market conditions, improve quality, and drive innovation. By iterating, companies can evolve their products gradually, ensuring they stay relevant and competitive in the market.
Diminished conversion rates indicate a decrease in the percentage of people who take a desired action, such as making a purchase, after interacting with a product or service. This decline in conversion can result from various factors, including lower product quality, mismatched audience expectations, or saturation of offerings. It signifies a drop in the effectiveness of converting audience interest into actual sales or desired outcomes.
In the context of product sales, a "vicious cycle" typically refers to a detrimental pattern where each new product released is of lower quality than the previous one. This decline in quality leads to reduced sales and customer satisfaction, creating a negative feedback loop. As sales decrease with each subsequent inferior product, the business may struggle to maintain its audience's trust and loyalty. Breaking this cycle often requires a shift towards focusing on improving the core offering rather than continuously introducing new, subpar products.

Counterarguments

Diversification can mitigate risk by not relying on a single product for revenue.
New products can attract different segments of the market, expanding the creator's audience.
Innovation often requires launching new products, which can keep a brand relevant and competitive.
Some markets expect frequent new releases, and not meeting these expectations can lead to a loss of market share.
A single product may not be able to meet the evolving needs of customers, necessitating new products.
Creators with a broad range of skills and interests may be able to successfully manage and refine multiple products simultaneously.
Additional products can provide value to the audience if they address different needs or complement the core offering.
A well-strategized portfolio of products can cross-sell and up-sell to the same audience, increasing customer lifetime value.
Some creators may have the resources and team to manage multiple products without sacrificing quality.
In certain industries, rapid innovation cycles may make the continuous refinement of a single product impractical.
Creators can use feedback from multiple products to improve and refine their overall offering more effectively.
A single product focus might limit growth potential in cases where market saturation is reached quickly.

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Grow Your Audience By Avoiding These 3 Mistakes | Ep 796

The mistake creators make of trying to launch more products instead of improving their existing offering

Alex Hormozi addresses a crucial error creators often make: opting to launch multiple products instead of refining their core offering. This mistake is dissected through various observations and anecdotes Hormozi shares.

Creators often make the mistake of trying to sell more products to their existing audience rather than focusing on improving their core offering

Hormozi has closely observed creators, noticing that those with a modest following who continuously introduce new services consequently see their audience dwindle due to the poor quality of their proliferating products. He underscores that truly perfecting a product or service can take years of devoted iterations.

His observations encompass a range of creators who amass a variety of products or run several businesses simultaneously without the necessary resources or concentration to manage them properly, actions he deems as "just stupid." Hormozi identifies this trap as a novice error or "Entrepreneurial ADD," which he believes might impress the unknowledgeable but would clearly signal distraction to those with business savvy.

Sharing an experience about a real individual who inspired his podcast theme, Hormozi suggests that creators consider focusing on a single business, emphasizing that it could become substantially more profitable if all resources were directed towards its improvement.

Creators may be tempted to sell a second, third, or even more products to their audience, thinking that more products equals more revenue

Elaborating on this notion, Hormozi discusses how creators with an audience who have found some success with a first product often wrongly assume that adding a second product will lead to greater profits. This second product, he highlights, usually suffers from lower quality compared to the first, which can result in diminished conversion rates and the dilution of the creator's credibility.

Furthermore, when the second product performs poorly, creators may mistakenly believe that adding a third product will correct their trajectory. However, Hormozi notes that this just exacerbates the problem, with each new product tending to be inferior and less successful than the one before.