Key requirements for consumer technology -> TPCBP
- T – Traffic, Can you get cheap traffic for this vertical?
- P – Profit, Are there offers, products, services you can sell that will compensate for traffic acq. costs? or if relying on free traffic, can a low amount of traffic generate enough profit?
- C – Competitors, are big companies in this vertical? If so, how will you grab traffic that they aren’t or can’t? It is better if they are not in this vertical, it could be a blue sky vertical or your angle is just different.
- [B]P – The Buying Power of consumer and propensity to spend. If you are in selling airfare, for example, traffic is expensive to obtain, profitability is low as the commission is low, competitors are large, and additionally, the consumer is also bargain hunting and would not pay more as a consumers #1 concern is saving money and #2 is fewer layovers/timing.
If you sell supplements, the overall price is not high and the consumer may spend more than regular supplements as the overall cost is still low and they may not be consuming other supplements so its a new unique expense which they can handle the burden of as opposed to say another gym membership as they are already paying for a similar service.
Additionally, consider the product as well and go through the following questions before making a new product. Traffic = CAC:
Good, Do this.
If your product is junk, and the traffic is cheap, you will make money.
If your product is good, and the traffic is cheap, you will make even more money.
Bad, Don’t do this.
If your product is junk, and the traffic is expensive, you will lose money.
If your product is good, and the traffic is expensive, you will make a bit of money.