Book Summary: "The Embedded Entrepreneur" by Arvid Kahl

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THE AUDIENCE-DRIVEN MOVEMENT

The Audience-Driven approach is about making every business choice with your audience in mind, including what to offer in the first place.

An audience is everyone who should be interested in you, your business, and your products.

The Audience-Driven approach’s core principle is simple: you delay defining “the idea” and your product until after you have chosen and explored an audience for your business - because you can’t know what your future customers need without understanding them first.

AUDIENCE DISCOVERY

AN ACTIONABLE GUIDE TO FINDING YOUR AUDIENCE

Multi-stage validation:

  1. Explore which audience you want to help. Validate: Make sure the audience is interesting for you, is the right size, has exciting problems, and is willing to pay for a solution.
  2. Observe that audience and detect their most critical problems. Validate: Ensure the problem is genuinely critical, people are already looking for solutions, and it can’t be easily ignored or delegated.
  3. Envision a solution that solves this problem within your audience workflow. Validate: Make sure that your solution doesn’t have unintended side-effects and solves their problem without adding additional work.
  4. Think of the product.

STEP 1: AWARENESS — THINK OF POSSIBLE AUDIENCES

Tribes consist of people who share an interest, are highly interconnected, and follow the same leaders.

Ask yourself?

  • What tribes do you belong to?
  • What hobbies do you have?
  • What has been your lifestyle in the past?
  • What professions do you have?
  • What companies do you work for?
  • What is your significant other doing?
  • What groups do your parents and siblings belong to?
  • What are the social circles you frequent?
  • Reflect on your past experiences, even if they are not as recent as a few years ago.

During your search for potential audiences, reflect on the issues you feel strongly about, and consider who else might be interested in that.

STEP 2: AFFINITY — FIND OUT HOW MUCH YOU CARE ABOUT THEM

To find out how much affinity you have for an audience, ask yourself these questions, and quickly note down a 0–5 rating for each.

  • Do you believe that the members of this audience deserve to succeed much more than they currently do?
  • Do you imagine conversations with these people to be interesting, fruitful, and enjoyable?
  • Do you see a more profound reason, a passion that drives this audience’s members to do what they do?
  • Is the audience doing something meaningful?
  • Could the people in this niche be doing something more substantial?
  • Do you think you would benefit from learning a lot about the work in this niche?

STEP 3: OPPORTUNITY — FIND OUT IF THEY HAVE INTERESTING PROBLEMS

For each audience, do the following things to find out if they have problems that might interest you.

  • Find a few SaaS products in their space and see what problems they solve.
  • Find a community forum or social media group where your niche audience hangs out and go through their recent posts.

    • Water coolers
    • Facebook groups
    • Reddit
    • Twitter
    • Self-hosted communities
    • Slack communities
    • Formal communities
    • Event resources
    • Literature

I recommend spending a maximum of an hour for each audience on your list. Dive as deep as you can into the industry to see what problems and complaints you can surface. Make a note of what exists, what doesn’t exist, particularly what you thought would exist but doesn’t. This is an indicator of the potential transfer of knowledge that you might facilitate.

For every row in your audience list, take a few notes about the problems you encountered, and add another 0–5 value column indicating how interesting those problems sounded to you.

STEP 4: APPRECIATION — FIND OUT IF THEY’RE WILLING TO PAY

For each audience in your list, look for signs of the following:

  1. Purchasing agency: Can the people you’ll be selling to make their own decisions when it comes to buying a professional tool?
  2. Budget scope: What kinds of budgets can your prospective customers in this niche usually spend on products and services?

For every audience you think is likely to pay or can be convinced to start budgeting for a solution to their problems, add another 0–5 value to their row in your list.

STEP 5: SIZE — FIND OUT IF THIS MARKET CAN SUSTAIN A BUSINESS

For bootstrappers, a market has to be both large enough to sustain your business and small enough not to attract giant competitors.

For some founders, this will be $10,000/month in after-tax earnings, while others will need this to be much more or a bit less. Take that number, double it as a precaution to account for all the unknown unknowns in the market, and divide it by the price you think your audience would pay for your offering. This will be hard to discover, so look for similar products in the space or draw parallels to products in adjacent industries. That will be the number of customers you need to have, at least, to get to your desired income levels.

For each audience on your list, add another 0–5 value indicating if the niche is sized just right for your bootstrapped business aspirations. Five should be a perfectly sized market.

TALLYING THE RESULTS

In your spreadsheet, create one final column, adding the point values for each row. Then, sort the whole table so that the highest total point values appear at the top.

AUDIENCE EXPLORATION

TO BOLDLY GO WHERE NO ENTREPRENEUR HAS GONE BEFORE

The goal of the Audience Exploration phase is to understand your audience’s motivations and move yourself into a position where you can detect an unsolved problem that you can build a business around.

The Embedded Exploration phase ends when you have established yourself in several communities that your audience frequents and have started a note-taking routine about commonly experienced issues and challenges. If you’re planning to build a business on the side, this is a long-term activity that you can do while you’re working a day job.

During your Embedded Exploration in a community, you will be focusing on these activities:

  • Observe pain, problems, and challenges. Note down common themes and insights.
  • Learn how people communicate. Find the phrases and jargon they use that others don’t.
  • Look for people who sell successfully. How are they wording their pitches? What have they understood about your audience that you haven’t yet? If communities don’t allow selling: how do people involve others in their projects?
  • Engage with community members to find verifiable first-hand accounts and build relationships.

COMMUNITIES

The initial step of Embedded Exploration is to find the place of professional exchange: the proverbial water cooler.

Kinds of communities:

  • Goal-driven communities
  • Practice-driven communities
  • Interest-driven communities
  • Location-driven communities
  • Circumstance-driven communities
  • Hybrids

THE FOUR PRINCIPLES OF EMBEDDED EXPLORATION

  1. Find the community experts, follow them, and follow those who engage them.
  2. Find breakout communities and follow the conversation.
  3. Engage the Engaged. Reach out to people who are particularly active and insightful.
  4. Make notes of common themes and complaints.

COMMUNITY PLATFORMS

  1. Facebook:
  2. Invite-only groups: make a case for why you’re a good fit, use social proof.
  3. Ask people for other group recommendations and to invite you.
  4. Observe the frequency of problem mentions on a daily basis.
  5. Comment on people’s posts with engaging questions.
  6. Ask straightforward questions and provide context.
  7. Use Direct Messages to deeply engage with people who you have found to be helpful to your cause.
  8. Twitter:
  9. Find and follow influencers, then follow the lists they’re on and the lists they curate. Follow their most engaged followers, too, then repeat.
  10. Consistently follow conversations to explore the whole breadth of the Twitter community.
  11. Note down interesting conversations by copying the link to individual tweets.
  12. Leverage Direct Messages to build personal relationships with domain experts from your audience.
  13. Instagram:

Start at the top. Find the brands and well-known Influencers, and follow who they follow and interact with.

  1. Pinterest:

On Pinterest, users share images and links of things they want, like, and aspire to. Pinterest is less about the personal experience than communicating desires and insights visually.

  1. Cross-Community Communications:

Many high-follower accounts have started funneling the most active of their followers into private Messenger groups, onto Discord and Slack servers, all places where direct communication can happen without the involvement of the social media platform. Even though these services are also for-profit businesses, engaging an audience on multiple channels with different kinds of communication is a tangible way of distribution channel diversification.

You couldn’t get a more homogeneously aligned group of people talking candidly in a central location to learn about their problems and needs. If you find such a group, join it. These communities’ internal structure will also give you very interesting insights into how the community understands itself.

  1. YouTube:

Since video production is wildly more complicated than writing a tweet or taking a photo, content is released less often but has much higher engagement when it’s published. Subscribe to the right channels, and creators will reliably deliver new developments in any industry into your email inbox. This material may be protected by copyright.

  1. Online Communities:

You will find honest conversations between people who are not trying to establish personal brands. That naturally shifts conversations towards the central focus of the community.

  1. Reddit:

Most subreddit communities have resource collection threads as a sticky post at the top of their message feed. If you’re taking notes and bookmarking links, this will be a treasure trove. Besides actionable content that will allow you to do problem research, you will also find other external communities that you can join.

  1. Quora:

The question-and-answer platform Quora is a gold mine for Embedded Exploration. In the best case, you can quite literally ask the questions you want your target audience to answer, and those of them who frequent Quora will answer them for you. But even just as a research archive, Quora is incredibly useful.

  1. Slack:

For audience research benefits, Slack is a great place to “just hang out.” Since it’s a chat platform, you will read about the just-in-time discussion about problems that are immediately felt by your audience.

  1. Discord:

Discord is focused on providing an enjoyable experience for small groups of highly engaged users, both through a text-based chat system and through real-time voice chat.

  1. LinkedIn

LinkedIn being a professional network gives you the excellent opportunity to watch how other businesses create leads. By just observing what content gets created and how people interact with it, you will learn a lot about how people communicate in that particular industry. Take note of any professional jargon that you come across.

  1. Online Forums

Forums come from a time of conversational equality. It’s fine to stand out, but acting against the group’s interests will get you removed from forums very quickly. Build relationships, engage with other forum members, and you’ll find a great place to learn about their issues.

  1. Podcasts

Building a relationship with someone involved in your audience community on a weekly basis is a valuable thing to do. Not only will you have access to someone who has a lot of unique insight into the industry, but you might be interesting interview material for them eventually, which will be very useful once you grow your own following.

  1. Private Online Communities

When it comes to the quality of research, closely observing a private community from within can yield incredibly insightful results — at the cost of a lot of reputation-building and expected interaction.

  1. Offline-First Communities

Offline communities are wonderful for building real relationships with people who care about a subject matter.

  • Formal Communities
  • Professional Associations
  • Clubs
  • Conferences and Shows

If you’re interested in learning and embedding yourself in any kind of community, focus on these principles:

  • Reach out with intent and honesty.
  • Don’t skip a community because it’s hard to research.
  • First, listen. Then engage.
  • Do recursive community exploration.
  • Ask around at the nexus.

HOW TO TAKE NOTES IN COMMUNITIES

Provide:

  • Reason
  • Detail
  • Context
  • Followup

PRESENTING YOURSELF TO THE COMMUNITY

When you’re new in a community, people expect some level of initial effort after you join. Make it easy for people to get to know you. The real you. Don’t hide behind a pseudonym. Own your name and use it for your public work.

TRACKING INFLUENTIAL PEOPLE ACROSS PLATFORMS

If you find a domain expert you really like, try finding their other social media accounts, follow them there, and start exploring the followings and communities in which they are active.

THE CARDINAL RULE OF EMBEDDED EXPLORATION: DWELL, DON’T SELL

Every action taken by a member of the group should benefit all members of the group.

Don’t sell. Don’t market. Just learn — and share what you learn.

NEXT-LEVEL EMBEDDING: GET A JOB

You don’t have to take a full-time job to benefit from this insight. Freelancing, part-time jobs, or even interning will give you access to both the interesting knowledge and the people who hold it. It will allow you to attune your understanding of an industry to the reality of the day-to-day work within it.

PROBLEM DISCOVERY

FINDING PROBLEMS AS AN EMBEDDED ENTREPRENEUR

The goal of Embedded Exploration is to understand an audience enough to detect how you can help them. You’re focusing your attention on becoming an expert in the subject matter, the people, the relationships, and what drives your audience.

Problem Discovery is over when you have selected a problem to solve and started working on a solution.

PROPERTIES OF AN INTERESTING PROBLEM

If they feel some sort of pain you can relieve, that’s a problem. If they have a job that needs to get done or a goal you can help them achieve, that’s a problem. Even if you can help them gain more of something than they have now, that’s a problem that you can help solve.

Since problems are perceived strongly or weakly, we need to look at what happens at either extreme. People don’t pay for solutions to problems they don’t mind having. If a person doesn’t feel pain, they aren’t looking for a painkiller. They probably won’t even prepare for a time when they might have the pain in the future. But once they feel the pain intensely, they will look for a remedy immediately.

A critical problem is both important and urgent. It’s likely a painkiller, as vitamin-like problems are optional by definition. Solutions to critical problems are “must-have” products. A nice-to-have product solves a non-critical problem.

Three Kinds of Problems:

  • Time-related problems
  • Resource-related problems
  • Problems of the self

The Properties of Critical Problems:

  • Critical problems are painful
  • They cause real and measurable pain every time they occur
  • Critical problems are frequent and recurring
  • Critical problems take up non-negligible amounts of time - every time

People gladly pay as soon as paying for the solution is cheaper than continuing with how they attempted to solve their problems before.

As a general rule, people will pay for a solution:

  • if it saves them time
  • if it saves them money
  • if it makes them money

THE SHAPE OF A PROBLEM IN THE WILD

Prospect Awareness Scale:

  • Completely Unaware
  • Problem-aware
  • Solution-aware
  • Product-aware
  • Most-aware

People…

  • start complaining
  • asking for help
  • are looking for recommendations
  • are looking for alternatives

ON BUDGET AND PURCHASING AGENCY

Carefully observe your target audience for their understanding of who sets the budgets and who makes the ultimate purchasing decisions. These people are the ones you want to talk to if you ever intend to make money.

A WARNING ABOUT VALIDATION

You’re better off trying to quickly invalidate your assumptions than to validate them. Every theory that you can invalidate is one less mistake waiting to happen.

AUDIENCE-BUILDING

MAKING FRIENDS FOR FUND AND PROFIT

Once you have found the people you want to serve and empower, and you have zoomed in on a problem space within their lives, you will now both build an audience and build for that audience.

A PLATFORM OF CHOICE: TWITTER

If your target audience is on Twitter, too, all the better. If not, be present inside the founder community nonetheless. It will make all the difference.

THE GOALS OF AUDIENCE-BUILDING

Building an audience allows us not to lose everything when we start something new because our previous attempt didn’t work out.

The First Goal: Become a Domain Expert in Your Community

Every expert in the community is recognized as an expert because people trust what they have said before. It’s really about exposing yourself to a community, sharing your learnings and insights in a meaningful way that helps other people.

The Second Goal: Build a Product That Your Audience Needs

You learn, you validate, you build, you release, you observe.

THE THREE PILLARS OF GROWTH

  1. Engage with people. Don’t just yell into the void.
  2. Empower people. You can lift them up and multiply the eyes that are on their content.
  3. Provide meaningful, valuable content regularly.

Without this kind of intentional interaction, you would never learn about people’s problems. That’s why it needs to happen in public.

THE ABUNDANCE MINDSET

Let’s pull all this together: audience-building requires you to build two parallel brands, one for yourself and one for your product and your business. You want people to be interested in what you want to eventually sell and establish a reputation as a caring expert that you can carry with you beyond this particular business. Act from an abundance mindset, engage, empower, and provide valuable content and build in public to leverage the feedback mechanisms that being embedded in a community allows for.

IMPOSTOR SYNDROME AND BUILDING CAPITAL

Understand that by building in public, you are building capital; you’re building wealth. Even if you fail or disappoint some people, your struggle and your journey will mean something.

Start by being an ambitious learner. Share your journey, share your learnings, and become a person that people in your community want to engage with — because you lift up and unite everyone around you.

THE PRACTICE OF AUDIENCE-BUILDING

With consistency and persistence, you will show up on more and more radars.

Your journey deserves to be documented. Insist on telling your story and ignore those who dismiss it. Listen to those who embrace it and build relationships with like-minded people.

ENGAGEMENT

The practice of Audience Audition has two parts: the hunting phase and the gathering phase. You hunt for opportunities to engage, and then you gather followers by actively engaging with the original author of the tweet and their followers who are responding to it.

Your profile page should be an invitation: an invitation to become a friend.

Here are the main themes that I have run into and how I usually engage with them:

  • People look for help
  • People look for moral support
  • People look for distraction
  • People ask for alternative viewpoints
  • People want to refine their vague idea into something concrete
  • People want to share their journey

Any tweet you send out for your Audience Audition should do one or more of these four things: Expand, Focus, Syndicate, or Invite.

EMPOWERMENT

Growth is something that can be made visible. The act of empowerment will help you do that for yourself and, more interestingly, for others. That’s what the Opportunity Surface concept is about: taking time to invite in serendipity by doing as much as possible to connect with other people meaningfully.

  • Share insightful tweets by influential thinkers in your space.
  • Share articles that you have found on the web that your followers can learn from.
  • Help someone find beta testers for their prototypes.
  • Connect someone with an expert that can solve their question.
  • Show someone an example of what they are looking for.
  • Celebrate someone’s success with them.
  • Encourage someone who failed at something.
  • Expose someone to a different perspective or approach that they’re not yet aware of.
  • Inspire someone to take the plunge/to go ahead with something that they are dreading.
  • Reassure someone that the community has got their back and will support them.
  • Include someone in the conversation who should be part of it.
  • Give someone more reach because they are just starting out but have important contributions.
  • Expose someone who hasn’t yet found their community to your audience.
  • Help people deal with emotional stress by providing an outlet and showing how shared their pain is.
  • Validate someone’s work by encouraging them to make more of it.

VALUABLE CONTENT

The best and most encompassing definition of “content” that I could find is “information made available” — and I believe that is a pretty insightful definition. Not only do you need information, but you need to make it available for someone to consume.

Creating original content is great, but it’s not the only way to provide value to your audience. By allowing for accessibility, understanding that different people need to learn about things at different times, and re-using content made by other creators, you can generate immense value for those who are listening to you.

SETTING UP A TWITTER ENGAGEMENT, EMPOWERMENT, AND CONTENT SCHEDULE

A reasonable schedule (and a few tips) for a side-hustle that won’t demand more than a few minutes each day. Manual tasks:

  • Once a week, take 15 minutes to come up with 3–5 tweets and schedule them on different days, at different times.
  • Once a week, take another 15 minutes to find 10–20 interesting tweets from your timeline and schedule them between your original content.
  • Every day, retweet at least three interesting articles or insights.
  • Every day, quote tweet one interesting article or insight with a thought-provoking comment.
  • Once a week (and whenever you feel inspired), pick one person you admire for their work and give them a shoutout.
  • Whenever you see someone struggling or celebrating, retweet their message.

Automated tasks:

  • Automatically retweet your original tweets six hours after they are published.
  • Automatically retweet the 10–20 interesting tweets you have scheduled.
  • Once you have a few well-performing tweets, consider setting them to be automatically retweeted at random points.

BUILDING (FOR) AN AUDIENCE

If your personal brand is that of a domain expert, then your professional brand needs to consist of two parts: the experienced founder and the successful product.

While sharing the founder journey:

  • Share your assumptions and validation strategies
  • Share your decision-making
  • Share your failures and struggles
  • Share “mind level-ups”

While sharing the product journey:

  • Share milestones and metrics regularly
  • Share big events in the business, either good or bad
  • Share product growth and feature insights

AUDIENCE GRADUATION

Some audiences are more permanent than others. Over time, you will experience churn in your follower numbers: some people just move on. They graduate from you. You’ve taught them everything you know, and they now need something — and someone — else.

  • Grow with your audience
  • Carve out your expert niche and be consistent
  • Build an audience funnel
  • Understand your cohorts
  • Look at other influential people and investigate their strategy