The idea of selling something you haven’t finished seems almost counterintuitive. It seems outdated. Nevertheless, some of the most astute artists, filmmakers, and internet business owners have been doing just that for years: raising money before the product even exists, using that money to develop it, and leaving with significantly lower financial risk than when they began.
We refer to the idea as a pre-sale. Fundamentally, it’s the process of presenting a concept, course, good, or service to prospective customers before the finished product is ready. Purchasers make upfront payments. That money is used by the seller to manufacture the item they have already sold. There isn’t a loophole. It’s a discipline.
Pre-sales have been used by Hollywood for many years. Before a single frame was shot, a filmmaker without a studio budget would approach distributors in various countries, such as the US, the UK, Germany, and Japan, and obtain commitments to buy distribution rights. A bank used those contracts as security for a production loan. The film was produced. The distributor was granted rights. The filmmaker refrained from risking their savings on an untested audience. It was and continues to be just good business.
The same reasoning holds true for much more than just movies. A small brand designing a tangible product, an author writing a book, or a course creator creating a curriculum all deal with the same fundamental issue. It costs money and takes time to build. Furthermore, there’s no assurance that once your creation is finished, anyone will genuinely want it. Both of those issues are simultaneously resolved by a pre-sale. Before making an investment, you determine the level of demand and gather the necessary funds.
Most people seem to believe that pre-sales are primarily about money. Indeed, the money up front is important. However, what early buyers tell you is the more overlooked advantage. People are motivated when they pay for something that does not yet exist. They have beliefs. They will tell you what they really wanted, which may differ slightly from what you had in mind. Early, straightforward, and honest feedback can help you create a better product than you could have in a room by yourself.
Pre-selling is not without genuine tension, though. Anyone who has received payment for a promise is aware of the unique significance of that commitment. It is not the same as a standard deadline. The longer the delivery takes, the more of a low hum of guilt it carries. When he wrote about his own pre-sale experiences, developer and product creator Dave Ceddia put it simply: the launch is exciting, but the work that follows is less so. That pressure serves as fuel for some. For others, it gradually reduces motivation in a subtle way. Before you start a pre-sale, it’s important to know which type you are.
The principles of operating one effectively are fairly simple. Create an easy-to-read sales page. Give early purchasers a significant discount or a bonus that they won’t receive later. Give it a deadline—a real date that indicates the end of the offer and the start of production, not a fictitious one. Keep lines of communication open with all purchasers.
Additionally, maintain the scope’s integrity. Promises made during a pre-sale turn into obligations as soon as payment is received. While it is possible to make changes to your product as you develop it, it is more difficult than it seems to break a commitment made to paying customers and can seriously erode their trust.
It’s difficult to ignore the fact that creators who regularly use pre-sales also typically develop audiences in different ways. When someone places an early wager on you, a relationship develops that transcends money. These early adopters turn into advocates—sometimes vocal ones—and their recommendations and word-of-mouth have a greater impact than paid advertising.
The reasoning is the same whether you’re creating a digital course, a craft product, or a service package. First, sell the concept. Use the funds and comments you get to build it. Introduce something that the market has already expressed a desire for. Success is not guarantyd by that sequence. However, it does significantly reduce the cost of failure.
