How to go vertical if you already have a product
The Six Percent Entrepreneur
How to go vertical if you already have a product
June 14, 2021
In this episode, we talk about different routes a founder can do if they didn't hit the steps of the GPDS framework and already started working on an MVP.
I have a few startup founders that are reaching out to me that are a little bit worried. They heard my vertical method talk and if you haven't heard this talk, you should go check it out. It's at It's t-h-e, thevertical They've heard my vertical method talk and they've heard about the vertical method. And again, to recap the vertical method is a two-pronged approach where the first prong we are establishing founder market fit by picking a niche that's congruent with your core identity. And the second prong is to use the G.P.D.S framework which is to grow your customer list first, then you pre-sell a minimum viable mockup, then you develop your solution and then you scale your solution. And the order of operations for that is the most important. You can't skip the steps for your startup to actually launch successfully. 

So what we're saying is we are growing the customer list first. Instead of going and building the technology first, we are building the customer list first. Instead of doing crowdfunding campaigns first, we are growing the customer list first. It's important that you're growing the customer list first because your customer list is an asset. Now, some start-up founders are reaching out to me saying, Robin, I didn't follow that exact order and I just started building out my product first. Now, what do I do? How do I sell it? Do I niche down or do I abandon this product? What do I do? 

So, here are a few options on what you can do if you didn't hit those steps of the GPDS framework and you started working on your MVP. What I would suggest is think of your MVP as a sunk cost. Your MVP is something you've built. Forget about it for a moment when you're doing the vertical method start with that niche. Because we're trying to build a foundation where we are building a dream life for yourself, where you are serving your niche customers that actually vibe with you that love you, that you love back. That don't feel like it's work because they're your friends and family. That's how your customers should feel. 

So I would suggest abandoned the MVP and working that way. And then once you've identified who the snitch is then if you want to revive your MVP, then you can think about modifying it in a way that serves your niche. But most likely it probably won't serve your niche. And you'll probably have to start from scratch but not all is lost. 

So let's say that you are hell-bent on getting this product out. You spent a lot of money, you still feel that there's a market for it and you just wanted to try to get a return on your investment or at least try to save as much as you can on your cost. So I'm actually going to give you a way on how you can release this product in this brand new world, where we're going, where everything is going vertical, even if you have a commodity, there are ways that you can still go vertical. So here's how you do it. 

If you have a commodity, then the way you go vertical is by white labeling this commodity out to people who do own these customer lists. So let's say you own bedsheets, for example, if you're on bed sheets and you are hell-bent on selling these bed sheets, then you just white-label your bedsheets to people who are marketing to a very specific niche. So that way, if you have people that are marketing towards a hotel niche and maybe there are some hospitality supply influencers out there, well then they can just white-label your bedsheets and market it under their brand. They already have a following, they already have a customer list, and will be really easy for them to make that sale. It would be really difficult for you to try to market to their niche because that's an entire marketing effort that requires an entire marketing group that you don't even have. But this other person does have it. So you white-label your products out to people like this and you don't just stop there. You can white label that out to several different niches. It could be for hotel beds, it could be for hospital beds, it could be for retail Bed, Bath and Beyond beds. It could be for amazon retail beds. I don't know, it could be for people who enjoy unicorns and you just slapped like a unicorn label on there with some unicorn influencers' name and that unicorn influencer will be able to sell unicorn influencer bedsheets. I mean that's how the world is working. If it's a commodity, it's really these niches that are going to be able to sell it because these niches have a connection with their followers that a commodity cannot have. 

So let's look at the oil world, for example. Oil is a commodity and oil is actually white label. They're not doing it in a very vertical-oriented way. There's probably an opportunity for them to do it that way. But when you have Shell oil or Texaco oil or Exxon oil, you don't know who drilled that oil out. You don't know where that oil is actually coming from. There's no such thing as Shell oil, Texaco oil, or Exxon oil. Once that oil is out of the ground, it's mixed in with other oil shipping to different refineries and refineries will take in different types of oil depending on the style of oil that they can process, but it all gets mixed in together and Exxon has their own refinery. Chevron might have their own refineries and they might be buying and selling from each other. They definitely are buying and selling from each other. But all this oil is, this oil is a fungible commodity that can be traded among each other and when it goes to the gas station pumps, it's being sold as a different brand. 

These brands, they're not going vertical. So you might have a Shell gas station, Exxon gas station, they're competing with each other on price. Or they might have some kind of product differentiator that they made up. For example, Chevron with Tech Ron. But if they actually went vertical, they probably would have a little better, better way to attract people that will be interested in buying their gas. I do see how it might not be feasible because they have to have physical locations everywhere. This is not a digital product that you can sell over the internet or deliver over the internet because you need physical locations. Going vertical might be a little bit difficult in this case. 

But let's play this experiment in our heads and do it anyway, just to see the power of actually going vertical with a commodity. So let's say that there is a new gas station in town and all they do is they only serve people who have Harley Davidson motorcycles. Now, if you had a Harley Davidson motorcycle, you would definitely go to that gas station at least once a month or something. But if you needed to get your motorcycle service or if you needed to have anything done with your motorcycle, the people at that Harley Davidson gas station are going to know your bike better than anyone at Chevron or Exxon or anywhere else. And if you need that added peace of mind that you're getting the best care for your Harley Davidson, you're going to go to that gas station that only works with Harley-Davidsons. 

I also made another example before with the Apple store. So the iPad actually is a commodity. You can buy the iPad from Target from Walmart, from the Apple store, you can buy it from anywhere, right? It's a commodity. But if you were to white label the iPad under different brands, for example, let's say that there's an influencer for doctors where there might be this doctor influencer that teaches people how to increase revenue in their business. And if he had a white-labeled iPad, then he can put down custom apps and things that would be relevant for his target audience that the Apple store and Walmart, and Target definitely cannot do. But this doctor influencer can put all these special apps, could have special SOPS um standard operating procedures for these doctors to use this, this iPad in a way that will increase revenue for his medical practice. 

So if you have a commodity, I gave you two different ways where you can start selling it, you can detach yourself from what you've already built, and start going vertical and do it the right way and then try to see if you can salvage what you built and modify it for that niche. Or you can just if you are really stubborn, you can just white label it out to several different niches and that's how you do it. This is Robin Copernicus. Boom bam, I'm out. 

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