670: (Solo) Why Great Products Lose to Better Offers - and How to Fix Yours

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1:03Hey guys, Nathan here. Welcome back to another episode of the Founder to Founder solo podcast where I share everything that I am learning in the trenches, building businesses for the past decade, speaking to so many hundreds and hundreds and hundreds of successful founders. So I want to talk about something that I keep seeing again and again and again, and I'd be doing you an absolute disservice, especially as an e-com founder, if I didn't share this with you. It's not talked about enough.

1:29Nathan Chan:Hear the stories, learn the proven methods, and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.

1:42Alex Omosi talks about, you know,$100 million offers, and it's so true. It's one of those things that I wish someone had told me earlier in my journey, and I've spoken to so many founders who generally have a great product. The quality is there. The branding is solid. The ads are running, yet they can't scale. The conversions are not where they need to be. And honestly, every, every, every single time we dig into it, and this goes for a lot of our members inside founder operators, every single time, it is not a product problem. It's an economics and offer problem. It's not the ads. It's not the funnel.

2:18It's not the content. It's not the creative, it's the offer. So let's dive in. So here's what most founders get wrong. They spend months on the product, they nail packaging, quality, price point, and then they start running ads. And you might get some success, right? But then, oh my God, every time, like the product and the offer, it can't scale. And it's because the economics don't match. So the offer is the complete package of what someone gets when they buy from you, how it's framed, what it includes, making sure you've got a really high, nice, juicy AOV so we have enough margin to buy and scale, right?

2:52The brands that are winning have cracked this. The brands that I see, that I speak to, that are spending$100 ,000 a day, like our friends IM8, like our friends at Manscaped, the list goes on. These are some recent shows. You can see them on this podcast. They have cracked the offer, right? Like you look at what Danny Young has done with IM8. It's one of the most talked about supplement brands right now in the market. And on paper, it's a supplement. It's a powder you mix into water every morning. There are thousands, tens of thousands of supplements. The market is completely saturated, but the offer is not just the supplement.

3:30It's 92 clinically dosed ingredients in a single drink backed by scientists from some of the most respected medical institutions in the world, co-founded by David Beckham. They've got this incredible bundle. Their AOV is like over$150. They've got a subscription that simplifies your morning routine. Every element is designed to make the yes feel easy and the value feel undeniable. And they didn't stumble into that. That is being strategically engineered from the ground up. Every part is so deliberate. And the founders that are doing exceptionally well, They just get this. So this is what an intentionally built offer looks like.

4:13And this is something that one of our founders, he's one of our instructors on the Founder Plus platform, Jordan Menard. You know, he speaks to this really well. We had Jordan on the podcast. He's the co-founder of Instant Hydration. He's like a super respected operator in the D2C space. He's managed over 3 million in ad spend, built his own brand. And the question isn't, what are you selling? It's what's the most compelling version of what you're selling? What makes someone feel like they'd be crazy not to buy? And that might be how you bundle your product. The guarantee you offer, the framing, the unique mechanism, the unexpected extra that just nudges people to consider actually buying.

4:50I talked about unique mechanisms before. This is part of your offer as well. But most founders spend 90 % of their time on the product and no time on the offer. And they wonder why their conversion rate is flat and their ads are not performing and they can't scale. So this is something that we spend so much time with our members on in founder operators and so many members that we speak to, prospective members. They say, guys, can you help me? My ads aren't scaling. And we see in their AOV is like$40, right? You need an epic bundle. You need something that will increase your AOV. I cannot stress this enough.

5:26Let me give you an example. One of our members, Emma, you know, she joined founder operators. She runs an incredible brand. It's called Sisu. It's a magnesium spray and it is amazing. It helps people sleep better. And you know, we three hexed her AOV and she didn't even need more traffic to her store. We three hexed the size of her brand. Isn't that crazy? By just massively juicing up her offer. Imagine how much more profit she makes from that. So guys, I want you to take one thing away. If you're going to focus on one thing, your ads aren't working right now, your marketing's not working right now.

6:03start with the outcome not the product what does your customer actually want to achieve i was speaking to another founder that's looking to sign up to founder operators and she sells seats and i'm like oh okay and she's telling me about their survival kits that they sell for 150 180 dollars i'm like oh my god that's the thing that's going to make ads work start with the transformation right a survival kit you know it's going really really well during these times right not just the features of what you're selling, then think about what makes it risk-free, a strong guarantee, clear returns policy, social proof, reducing friction.

6:39How can you bundle things in so you can increase the perceived value? We want to make your AOV at least, at least 60 US dollars plus, at least, but the higher the better, right? And have a dedicated landing page that speaks that offer and really sells using direct response marketing. So guys, this is your takeaway for today. You can have the best product in the market and still lose to a competitor with a better offer because you need to get your unit economics dialed. You need to get your offer right because what people are buying is not just a product. They're buying the whole package, the certainty, the value, the feeling that this is the obvious choice.

7:16So when you get your offer right, everything else gets easier. I can't stress this enough. When I sit down with Nick Schack, you guys know who he is. He's our lead instructor at Founder Operators. I've had so many convos with him and he always says to me, man, the times you've been able to spend like 100, 150 ,000,$200 ,000 a day, it's when the founders crack the offer and you've got to crack it. It is such a needle mover. Getting the right offer can change the trajectory of your business. Obviously, we would love to help you do that. We'd love to help support you. Join us at Founder Operators.

7:47Go to founder.com forward slash operators. If you take anything away, get the offer right and everything gets easier. I hope this episode has got you thinking about that. I can't stress this enough. And as always, guys, we'd love to hear your feedback. If you could rate and review this podcast on Spotify, Apple Podcasts, or wherever you're listening, it would have been the absolute world. We work overtime to give you the best content and insights from the greatest founders of our generation. I appreciate you guys. I'll see you in the next one.