How Does Selling Before You Build Affect Your Business's Reputation?

I asked chatgpt

There are many examples of successful companies that sold their idea before the product existed, before build started. By 'sold' chatgpt did not interpret this as a payment made in all cases.

Here are a few examples:

Free, with a constraint. SaaS later. Intitial funding was not from subscribers.

• Dropbox: The founders of Dropbox created a 3-minute video explaining their product idea before they even built the product. They shared the video on the internet and got over 75,000 sign-ups in one night, which helped validate their idea and secure initial funding.
• Instagram: Before Instagram launched, the founders created a landing page with a video explaining their product idea and asking people to sign up for early access. The page generated thousands of sign-ups, which helped validate their idea and generate interest in their product.

Commission

• Airbnb: The founders of Airbnb sold their idea of a home-sharing platform by creating a simple website and taking professional photos of their own apartment. They used these photos to attract early adopters and secure funding to build the platform.
• Groupon: Groupon sold their idea of a daily deals platform by creating a simple WordPress site and emailing their friends with daily deals. The idea took off and helped validate the market potential for the platform.
• Square: Square, a mobile payment platform, sold their idea of a credit card reader that could be used with a smartphone by creating a simple video that explained the concept. The video helped generate interest in the product and secure initial funding.
• Mailchimp: Mailchimp, an email marketing platform, sold their idea of an easy-to-use email marketing tool by creating a simple landing page and offering a free trial. The page generated significant interest and helped validate the market potential for the product.
• Indiegogo: Indiegogo, a popular crowdfunding platform, sold the idea of a new way to fund creative projects before it even existed. By sharing their vision for a platform that allowed anyone to raise money for their project, they were able to secure initial funding and launch their product.

Physical Item

• Pebble: Pebble launched a Kickstarter campaign to fund their smartwatch before the product was even built. The campaign raised over $10 million, which helped fund the development of the product and validate its market potential.
• Warby Parker: Warby Parker, a popular eyewear brand, sold their idea of affordable, stylish glasses by creating a simple landing page and offering a free try-on program. The page generated thousands of sign-ups, which helped validate their idea and secure initial funding.
• Tesla: Before Tesla built their first electric car, they started by selling their idea to investors and customers. By sharing their vision for a sustainable, high-performance electric car, they were able to secure funding and generate interest in their product.
• Oculus VR: The founders of Oculus VR sold the idea of a virtual reality headset to investors and gamers before they even built a working prototype. This helped them raise initial funding and generate buzz for their product.
• Nest: Nest, a smart home company, sold their idea of a learning thermostat by creating a simple video that explained the concept. The video helped generate interest in the product and secure initial funding.

These examples show that selling your idea before the product exists can be a successful strategy for validating your product concept and securing initial funding.

I use dealroom.co if I want to understand what funding a startup received and their business model adoption.

Kickstarter, Patron is different. They are transparent around intent and purpose. If you misuse these vehicles then expect a loss of reputation.

Kickstarter you need to be transparent with your budget. If you failed in your budgeting you can explain that. If you failed in assumptions you made, you can explain that.

if you're accepting preorders

• If you accept preorders without a condition you need to deliver. If one cannot deliver then a candid conversion that is transparent is required. You may get excused for this once, max twice by your followers. Depending on your reputation.
• If the reason given for refund is 'the quorum was not reached (sufficient preorders)' and this was not stated upfront as the dependency to proceed or not -- I personally would certainly see you as not very experienced. Even that is excused once in indie world. Be transparent and candid and you can preserve the faith the pre-sales has put in you.

If you're protecting yourself from loss of reputation by creating new brands for each product idea then what's it costing you to spin up new brands?

• Failure is not bad. Failure is great, an opportunity to learn fast.
• Repeated failure of the same thing is a different story. You know what they say "doing the same thing over and over and expecting a different results" = insanity
• Any protecting of anything is inauthentic and that will definitely cost more than hit on the credibility.

I did read your post, and am shaking my head. Why on earth make it soo complicated? Why not be true to self, build in public, course-correct with feedback from early adopters? Not a tough exercise. It does take courage.