🗞 What's New: The $36B social commerce industry

The US "social commerce industry" is expected to hit over $36 billion this year, a 36% increase from last year:

• Social media companies are increasingly rolling out features that allow founders to sell products directly from the platform. If you're in e-commerce, pay attention to this new way to sell.
• Interviewing 12 people about your product can surface 80% of customer needs, according to a recent survey. Here's how to find and recruit participants to get the answers that you need.
• Founder Arvid Kahl hit $55,000 monthly with his edtech SaaS before exiting to produce content. Below, he shares his advice on successfully building an audience-driven business.

Want to share something with nearly 85,000 indie hackers? Submit a section for us to include in a future newsletter. —Channing

💰 The $36B Social Commerce Industry

from the Indie Economy newsletter by Bobby Burch

Fourthwall, an all-in-one business platform for creators, has raised $17M to help users tap into the rapidly growing social commerce industry. Welcome to the new way to sell!

Walls down

The news: Fourthwall secured $17M in funding from major investors, including Lightspeed Venture Partners, Initialized Capital, and Alexis Ohanian's Seven Seven Six. The company joins a multitude of firms, ranging from Mighty Networks to Koji, that are vying to serve the $100B creator economy and blossoming social commerce industry, where people sell products directly from social media platforms.

Fourthwall 101: Based in Los Angeles, Fourthwall offers tools to help founders and creators launch their own websites, open a shop, and provide memberships to their audiences. Fourthwall offers website builder basics, membership management, and audience engagement tools (such as personalized audio or video thank you notes). The company, founded in 2019, also allows creators to brand and sell over 200 products, including sweatshirts, hats, backpacks, posters, and mugs. It also offers digital products like PDFs and e-books.

Prices, ownership: Creators own their domain, branding, and data. There’s no fee to join, but the company takes a 5% cut of earnings and charges a credit card processing fee of 2.9%, plus $0.30, on all transactions. Fourthwall also takes a 3% cut on the sales of digital products.

Growth: Fourthwall reported that its total number of users grew 10x in 2021. It also reported that many of its users have already made more than $1M on the platform, but didn’t offer any specific data.

Why it matters: Social commerce is expected to hit $36.6B in the US this year, a 36% increase from last year. In China, social commerce is already extremely popular, as evidenced by its $352B in 2020 revenue. Insider Intelligence senior analyst Jasmine Enberg explained why the US should be looking to China to better understand this space:

What’s driving social commerce: The pandemic has certainly helped boost social commerce, but Smart Insights offers a few more theories. Social media is well-targeted, as users seek out specific people, activities, and brands. Social commerce is also relatively simple for customers: If they like a creator, they can buy from them right away without leaving the platform.

A slice of the pie

YouTube wants in: The world’s largest video platform wants to boost live shopping and social commerce spending in the US. YouTube recently launched Holiday Stream and Shop, a series of livestreams featuring celebrities and YouTubers selling products. In July, YouTube rolled out a new feature that made video ads more shoppable by adding product images beneath the ads.

Pinterest, too: Visual discovery platform Pinterest is also aiming to capitalize on the growth of live shopping. Pinterest launched Pinterest TV to allow creators to host live shopping shows directly on the platform.

Jaw-dropping: The Hustle reported that, in October, a Chinese internet star known as “The Lipstick King” sold $1.7B worth of products during a 12 hour livestream.

Funding keeps flowing: A few months ago, we dove into a CB Insight report that estimated that creator economy startups were on track to land about $2B in venture capital in 2021. Welp...turns out that was a gross underestimate. The Information reports that creator economy startups have already raised more than $3.7B from investors this year, and we've still got a few weeks to go!

What are your thoughts on social commerce? Let's chat below!

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📰 In the News

from the Volv newsletter by Priyanka Vazirani

🛍 Twitter is partnering with Walmart to launch a live shopping feature.

🏙 El Salvador plans to build the world's first Bitcoin city.

👶 More Americans are planning not to have kids.

🙅‍♀️ Facebook's AR could let people "reality block" stuff that they don't like.

🎶 Adele got Spotify to stop shuffling albums by default.

Check out Volv for more 9-second news digests.

🎙 Interviewing Users to Uncover Customer Needs

from the Indie Book Notes newsletter by Bhumi

This month, we're reading Deploy Empathy: A Practical Guide to Interviewing Customers by Michele Hansen, and we're back with more notes from the book. You can check out notes from the first half here. Read on for more top highlights for indie hackers!

When should you interview people about your product?

Interviews are used for both targeted research, which answers specific questions around a project, and ongoing research, which builds general customer understanding to inform broader decision-making.

The general rule is to interview at least five people before making decisions. If the problem is complex, interview a maximum of 15-20 people. Michele quotes a study that found that interviewing 12 people can surface 80% of customer needs. The underlying concept is to stop talking to people once you start hearing the same thing over and over again.

Short surveys for ongoing research

One or two question surveys are still valuable, and get higher response rates than longer surveys. Some good questions to ask:

• What did you use before you used [product]?
• How did you come across [product]?

The key is to ask questions that are easy to answer. For example, "What did you use before you used [product]?" is factual and easier to answer, as opposed to "Why did you switch to [product]?" The latter asks for emotions, thoughts, and decision-making.

Do not ask open-ended questions like "If you could change anything about [product] what would it be?" Asking this will almost always garner responses about people wanting it to be free or cheaper.

Recruiting participants

Use social media platforms and online forums to interview non-customers, and email or surveys to interview current or former customers.

Reddit:

There are awesome scripts in the book with exact copy for you to use for Reddit posts. Here's some general advice: Identify your niche and find subreddits for that niche. Decide who you want to talk to, and who you don't.

Write your post. Example: "Looking for people to talk to about the complexities of scheduling meetings. $10 Amazon gift card if you participate!" Send the gift card at the end of the call while you're still on the phone. Also, ask the interviewee to comment on the original Reddit post verifying that the interview was legit.

Twitter:

Here, the key is to find people who have experienced the problem and are already talking about it. You can do this by tweeting negatively about a competitor, or about the process itself. Once you find relevant people, research them by reading tweets or blogs, and reach out via DM.

Use the same process for LinkedIn and Facebook Groups.

Email:

This is for existing customers whose emails you already have. Michele does not recommend cold email outreach for research purposes.

Tips:

• 5-10% response rate is really good. It's a numbers game.
• When recruiting existing customers, play up the fact that you're the founder (or some important title that you've made up for this purpose), and are open to hearing feature suggestions.
• Keep it short. Share why you want to talk to them, and for how long.

How to talk to make people talk

Tips:

• Use a gentle tone of voice: Think late night radio host or therapist tone.
• Validate their experiences.
• Leave pauses for them to fill.
• Mirror and summarize their words.
• Don't interrupt.
• Use simple wording.
• Ask for clarification, even if you don't need it.
• Don't explain anything.
• Don't negate them in any way.
• Let them be the expert.
• Ask about time and money already spent.

You can check out the full post here.

How do you find people to interview about your product? Share below!

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🛠 Building in Public: Just Start!

by Ivan Romanovich

None of these tips matter if you don't ever start. At some point, you have to just get going! Start building, start learning, and start sharing.

Discuss this story.

👥 Arvid Kahl's Audience-Driven Business Approach

from the Listen Up! IH newsletter by Ayush Chaturvedi

Arvid Kahl founded The Bootstrapped Founder blog and podcast, and is the author of Zero to Sold and The Embedded Entrepreneur.

Before focusing on producing content, Arvid launched FeedbackPanda, an edtech SaaS. The business reached $55K MRR within two years under his leadership, and he eventually exited for a "life-changing" amount of money.

Arvid is a strong proponent of the audience-driven approach to business, and even wrote The Embedded Entrepreneur with the help of active feedback from an army of 500+ readers. He's built a large audience of bootstrapped founders and other indie hackers on Twitter, and aims to continue serving the startup community. Here are his top insights on starting an audience-driven business.

Idea first vs. audience first

Successful founders sometimes appear as though they already had a large audience just waiting for their product. But it's more likely that the founder embedded themselves in their audience first. Many were already an integral part of a community for a long time, and had an intuitive sense of the right problems to solve for that community.

Most failed products are built through an idea first approach. Here's what idea first thinking looks like:

1. The founder has an idea.
2. The founder builds a product.
3. The founder tries to find users for the product.

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

An audience first approach looks like this:

1. Find the audience you want to serve.
2. Embed yourself in the community.
3. Discover problems that the audience faces.
4. Build products to serve the community.

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

Many 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:

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

Four steps to an audience-driven business

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

Action items:

• Make a comprehensive list of potential audiences.
• Next, rank the audiences based on affinity: How much do you want to serve them?
• Give every audience a score out of five.

Remember, if the audience doesn't interest you, then you won't be able to build a solid business around them.

2. Audience exploration: The goal of this step is to get closer to your future audience, both proximally and empathetically.

Action items:

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

Be patient; this step can take a while.

3. Problem discovery: The goal of this step is to find, and validate, problems worth solving in a community.

Action items:

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

Accept the fact that you can never be completely sure. As a founder, you're always taking a risk. Validate as much as you reasonably can, but don't become obsessed.

4. Audience building: The goal of this step is to build a personal reputation as somebody who is really helpful in the community. The three main pillars of building an audience are engagement, empowerment, and valuable content, in that order!

Engagement is joining conversations that are already happening. Arvid calls this "audience auditioning." This is how you meet your earliest followers, your seed audience.

Empowerment is amplifying other voices in the community. Identify interesting people doing good work, and help them reach a wider audience.

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

Advice for indie hackers

Trust the concept of involuntary reciprocity:

Check out Arvid's interview on the Indie Hackers Podcast here.

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🐦 The Tweetmaster's Pick

by Tweetmaster Flex

I post the tweets indie hackers share the most. Here's today's pick:

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Special thanks to Jay Avery for editing this issue, to Nathalie Zwimpfer for the illustrations, and to Bobby Burch, Priyanka Vazirani, Bhumi, Ivan Romanovich, and Ayush Chaturvedi for contributing posts. —Channing