How to build an audience-driven business👨‍👩‍👧‍👦 | Arvid Kahl - The Embedded Entrepreneur

Listen Up! IH - Episode 33

"Just give and help and support."

👆 That's Arvid Kahl's message to fellow Indie Hackers.

Arvid is a man of many gifts. He founded the bootstrapped founder blog and podcast, and is the author of two books, Zero to Sold and The Embedded Entrepreneur.

Before focusing on producing content, Arvind was the founder of FeedbackPanda.com- an ed-tech SaaS. The business reached $55K MRR within 2 years under his leadership and he exited the company for a "life changing" amount of money.

He is a strong proponent of the audience driven approach to business. So much so that he wrote his last book in an audience driven manner.

The Embedded Entrepreneur was written with the help of active feedback from an army of 500+ alpha readers.

After the success of Arvind's earlier SaaS startup and his first book - Zero to Sold - Arvid built a large audience of bootstrapped founders and indie hackers on Twitter.

He had already embedded himself in the startup community. He knew he wanted to serve that community. He identified their problems and he even wrote the book as a resource to solve their problems.

During the writing process, he took constant inputs from the community to improve the book.

This is probably the most "meta" book ever written!

It received massive success across Amazon, Gumroad, Goodreads, and even Product Hunt.

The Embedded Entrepreneur is an actionable guide on how anyone can start an audience-driven business. Plenty of indie hackers agree - it's a must-read for every startup founder.

A brief summary and lessons from the book👇

Idea first vs Audience First💡

On the outside looking in, successful founders sometimes look as if they already had a big audience just waiting for their product.

Ready to throw money at them.

But that's not actually true.

It's more likely that the founder embedded themselves in their audience first. Or they were already an integral part of a community for a long time, and had an intuitive sense of the right problems to solve for them.

They followed an audience-first approach to their business and considered themselves embedded entrepreneurs.

The audience-first approach is the opposite of the idea-first approach.

This is what "idea-first" thinking looks like:

The founder has an idea.
The founder builds a product.
The founders tries tries to find users for the product.

Founders following this approach end up with a solution, and then go looking for a problem.

An audience-first approach roughly looks like this:

Find the audience you want to serve.
Embed yourself in the community.
Find problems for the audience.
Build products to serve the community.

So by the time you have a product, you already have some validation that it is actually solving a genuine problem for the audience.

This is what Arvid says about why he wrote the book -

"I wrote a book because I want to show to people that the idea-first approach can be reversed and you can actually start with who do I want to serve?"

Most technical founders, coders, and indie hackers fall into the trap of building the product out too early.

Once they have a sliver of an idea, they start to code it.

But Arvid feels that coding should come much later in the life of a business -

"Coding is like the fourth step in building a business. The first one is figuring out who to serve. What do you need to serve them with? Then how you can actually serve them in a way that fits into their lives? And then what can you serve them with? Then you start coding"

The fundamental difference between the idea first and audience-first approach is that in an audience-first approach, you delay coming up with an idea as much as possible, you make sure the need for the product is validated, the community wants it and is willing to pay for it, and only then do you actually start building.

Let's get into the meat of the book.

4 Steps to an audience first business📘

Audience Discovery

The goal of this step is to become aware of the people that you could potentially help.

To discover your audience, look at the roles you already play, the communities you're already a part of professionally and personally.

Professionally you may be a software engineer, newsletter author, podcaster, indie hacker.

Personally, you may be a parent, a football fan, a coffee aficionado, a power lifter.

You can even go into your family and friends and their professional and personal interests.

These are all the potential audiences you can serve, as you intimately know them.

Action Items -

Make a list of all these audiences, make it as comprehensive as possible.
Then rank these audiences based on affinity.
Give every audience a score out of 5.

Audience Affinity is how much do you want to serve an audience. Does it get you excited or will you get bored listening to their problems and challenges?

Do you really want to build solutions for these people?

This is a crucial step, because if the audience doesn't interest you then you won't be able to build a solid business around them.

Once you're done, the next step is audience exploration.

Audience Exploration

The goal of this step is to get closer to the to your future audience - proximally and empathetically.

The idea is you go into the communities where your audience already hangs out right now.

Just go in there and be there.

At this point, you just want to observe and understand people.

Understand the right lingo of the community, identify the key influential people there.

Don't promote your product or service right now.

This step is just to learn as much as possible.

Follow what Arvid calls the cardinal rule of embedded exploration - Dwell, don't sell.

Action Items -

Find communities where your audience hangs out.
Observe and understand the communities.
Learn their jargon, identify the influencers.

Be patient, this step can take a while, but it ensures that you're building the right product in the long term.

The next step is about problem discovery.

Problem Discovery

The goal of this step is to find and validate problems worth solving in a community.

A critical problem is a painkiller, not a vitamin.

It's both important and urgent for the user, critical problems lead to "must have" products. Non-critical problems lead to "nice to have" products.

Its important to observe the complaints in a community at this stage.

Complaints can be ranked on a scale depending on who is raising them -

Similar to Eugene Schwartz’s awareness scale in marketing.

Completely Unaware people - don't know they have a problem, confused by why stuff takes so long.
Problem aware people - they know there's a problem, don't have a solution.
Solution aware - they know there are solutions, but don't know which is the right one
Product aware - know all the solutions in the field, you have to explain how yours is the ideal for them.

Action Items -

Listen to problems and complaints.
Note down the solutions being recommended, and how are they priced.
Do community members have the budget or willingness to pay to solve this problem.
Validate the problems as much as you can, speak to people who raised them

Warnings about validation -

Invalidate your riskiest assumptions first.
"Leave the building" - Speak to as many people as you can. Ask them "mom test" questions.
Accept that you can never be sure - You're always taking a risk. That's entrepreneurship!

Once you've identified and validated the problem, the next step is audience building

Audience Building

The goal of this step is to build a personal reputation as somebody who is really helpful in the community.

This step is basically a crash course in Twitter as that's where Arvid's primary audience resides.

As a founder, you want to build your personal brand that will color the brand of the products you build.

The audience you build this way will outlast your current project and will stand by you even when your startup fails.

That's invaluable.

The 3 main pillars of building an audience are - engagement, empowerment, and valuable content.

In that order!

Engagement

Engagement is joining the conversations that are already happening on Twitter. Not tweeting into the void with no followers, but following influential people and adding meaningful responses to their Tweets.

Arvid calls this "Audience Auditioning".

That's how you meet your very early followers, your seed audience.

Empowerment

Empowerment is where you amplify other voices in the community. You identify interesting people doing good work, and help them reach a wider audience.

You empower other people in the community at this step.

Valuable Content

If you do the first two steps right, you should have a base audience that you can serve. You can now focus on producing content that meaningfully helps this audience.

Content that helps them grow themselves and solves their problems.

That's what Arvid does best!

At this point, you would have successfully embedded yourself in a thriving community.

You would have an audience that will be willing to buy from you.

And you would be building products and services that solve their burning problems.

You will be an embedded entrepreneur.

And that's how you build an audience-driven business.

Arvid's advice for Indie Hackers🤗

Understand and trust the concept of involuntary reciprocity.

"I think one of the core lessons that I didn't understand until recently is this concept of involuntary reciprocity. The fact that if you give enough for free to people, if you just spend enough of your time to help them and to make their lives easier to solve the problems for, and with them without asking for anything in return, they cannot help but helping you back at some later point."

"Just give and help and support."

Final Notes📝

The book is extremely actionable and it's more like a "workbook" than a "textbook". You should read it and work with it every day if you're serious about building an audience first business.

You can buy templates from Gumroad that can help you at every step in your journey. Find out more on the book site - The Embedded Entrepreneur.

Some examples of embedded entrepreneurship that you can read about -