BEST Way to Create Authority in a New Market | Spotify Video Exclusive - Build with Leila Hormozi

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Podcast Summary: Build with Leila Hormozi

Episode: BEST Way to Create Authority in a New Market
Host: Leila Hormozi
Date: July 29, 2023

Episode Overview

In this episode, Leila Hormozi explores the challenges and strategies involved in establishing authority and trust when entering a new market—especially when introducing an innovative product or service. She emphasizes the critical importance of education, clear communication, and personal credibility when the market lacks familiarity with your offering. Using real entrepreneurial experiences and analogies, Leila shares actionable insights for building unshakeable authority from the ground up.

Key Discussion Points & Insights

1. First-Mover Challenge: Educating the Market

First Mover (Dis)Advantage:
- When you’re first to market with something truly innovative, the audience doesn’t know how to value or use your product.
- “If there's nothing for the market to compare your product to, they have no idea what to value your product. So why would they buy something that they don't know how to value, let alone use?” (00:28)
Example - Allen AI Software:
- Leila shares a personal example: launching an AI-based lead working product, "Allen."
- “People had seen things like manychat and SMS flows... but nobody had ever seen a machine that literally had AI built into it that would generate authentic responses to humans in real time.” (01:12)
- Early adoption was hindered because potential customers didn’t understand the product’s value or predictability.

2. Education as the Core Sales Strategy

When the market is uninitiated, sales require deep education about both the solution and the space itself.
“We had to have way more education during the sales cycle than any other kind of company because we’re not just educating them on our product, we’re educating them on…the market in itself because it didn’t exist.” (01:45)
Customers need comparison points to feel confident in what a product can deliver:
- “When people don’t have something to compare it to…they can’t predict what the product’s going to do for them.” (02:15)

3. The Need for Clear and Concise Communication

Overemphasis on product education and clear articulation is often necessary.
“You have to have an overemphasis on education for the buyer, and you have to be able to communicate in very clear, concise ways what that product does and the benefit for them.” (02:28)
Even if the product is perfect for the customer, without clarity, they won’t buy:
- “Otherwise they’re just not going to buy it, even if it’s exactly what they need.” (02:45)

4. Authority & Credibility: The Critical Trust Factor

Selling is easier if you already have authority—even if it’s not in the exact same field.
“It’s really difficult if you’re coming from a place of you have no track record, you have no authority, why should they listen to you?” (03:07)
Transference of Authority:
- Leila illustrates the “hairstylist dilemma”:
  - “She’s an expert on hair. But because of that, for some reason, you think she can solve your marriage problems, your work problems... It’s the same with…a sale.” (03:32)
- If you’re seen as an expert in anything, new customers are willing to trust you in new domains.

5. Strategy for Newcomers: Create Authority First

With two unknowns—new product and new vendor—customers hesitate. Eliminate one unknown by building personal brand authority.
“If you have no positioning in the market and you’re trying to push something new, you are new, the market is new. There’s two new unknown variables. You need one to be known.” (04:16)
The easiest route:
- “Try to make yourself known, try to make yourself an authority so that then the new thing that you’re pushing, they trust you, and so by proxy, they trust the thing.” (04:22)

Notable Quotes & Memorable Moments

“If there’s nothing for the market to compare your product to, they have no idea what to value your product. So why would they buy something that they don't know how to value, let alone use?” — Leila Hormozi (00:28)
“We had to have way more education during the sales cycle than any other kind of company…” — Leila Hormozi (01:45)
“You have to have an overemphasis on education for the buyer, and you have to be able to communicate in very clear, concise ways what that product does and the benefit for them.” — Leila Hormozi (02:28)
“It’s what they call the hairstylist dilemma… for some reason, you think she can solve your marriage problems, your work problems… it’s the same with, like, a sale.” — Leila Hormozi (03:32)
“You need one to be known. The easiest thing to do is to try and make yourself known...” — Leila Hormozi (04:16)

Timestamps for Major Segments

00:00–01:10: The challenge of launching products the market doesn’t understand
01:10–02:30: Case study—Allen and the requirements of market education
02:30–03:10: The necessity of communication and the cost of poor messaging
03:10–03:40: The role of personal authority and the “hairstylist dilemma”
03:40–End: Bridging unknowns by building authority in oneself

Key Takeaways

Pre-education and over-communication are vital when selling brand-new products.
Personal or company authority bridges the trust gap when both you and your product are unknowns.
If you make yourself the “known” variable, customers become more receptive to what you’re selling—even if the category is entirely new.

This actionable advice and real-life perspective empower entrepreneurs to overcome the silent barriers faced in early-market innovation and to build enduring credibility that powers growth.

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[00:00]
A
If you are the first to market in a certain sector, you have to be able to absolutely communicate to a level that many can never do what your product does and what it is valued for and how valuable it is. Sometimes the market isn't ready for an idea. And what's really tough and what a lot of people that are very innovative come against, is that the market is not educated on their product. If there's nothing for the market to compare your product to, they have no idea what to value your product. So why would they buy something that they don't know how to value, let alone use? And so what a lot of people come up to is there's first mover advantage. On the other side, it's first mover disadvantage, which is if you are the first to market in a certain sector, you have to be able to absolutely communicate to a level that many can never do what your product does and what it is valued for and how valuable it is. So I can give you an example, which is our company called Allen that we started three years ago. It was a software that used AI to work leads for companies. People had seen things like manychat and SMS flows where they had automated messages that came in, but nobody had ever seen a machine that literally had AI built into it that would generate authentic responses to humans in real time. And so people had no idea how to value it. They didn't understand what it did, they couldn't predict it. And because of that, many people got, they didn't want to use it because they didn't understand it. And what we didn't do well in the beginning, and we had to learn as we continued to roll out the product, was that we had to have way more education during the sales cycle than any other kind of company. Because we're not just educating them our product, we're educating them on what our product does and the market in itself because it didn't exist at that point, right? There was nothing to compare it to. When people don't have something to compare it to, they don't know what the patterns of that product are, so they can't predict what the product's going to do for them. Oftentimes it. If you have a new really innovative product, that's what's missing is you have to have an overemphasis on education for the buyer and you have to be able to communicate in very clear, concise ways what that product does and the benefit for them. Otherwise they're just not going to buy it. Even if it's exactly what they need, I think that you have to build more authority or credibility with the client prior to selling them. So it's really difficult if you're coming from a place of you have no track record, you have no authority, why should they listen to you? Versus if I come in and I've said, hey, I've sold three businesses, I've built this, I've built X, this is the next new thing. So what you have to think of is how you can get creative in creating a sense of authority in yourself or in your business before the client even talks to you, so that when they come in, you're already positioned in a way that you are an expert or authority in something. It doesn't even need to be that thing, because it's what they call the hairstylist dilemma. You go to your person, the hair stylist, and she's there to do your hair. She's an expert on hair. But because of that, for some reason, you think she can solve your marriage problems, your work problems, your friendship, right? And you give her all your problems. It's the same with, like a sale. So you might not be an expert in the thing that you're selling, but if you're an expert in something or if you can bridge the gap of there's something that you're an authority of, then people will see you as that in that new domain and they'll associate you with that. And then it'll be much easier to sell to them because they'll actually listen to what you're saying. If you have no positioning in the market and you're trying to push something new, you are new, the market is new. There's two new unknown variables. You need one to be known. The easiest thing to do is to try and make yourself known, try to make yourself an authority so that then the new thing that you're pushing, they trust you, and so by proxy, they trust the thing.