If you’ve got an idea you think would make you rich – you could be right. Or, you could be wrong. It’s important to test the validity of your idea before pouring tons of time, energy, and money into something. Yeah, you can be excited about it, but just because you are doesn’t mean the rest of the world will be. Why waste those resources if you’re not going to be able to turn a profit?
Check out these eight ways to find out if there’s a market for what you’re thinking about introducing.
Generating Workable Ideas
If you know you need to come up with something new, but you’re not sure where you should start, begin with the problem itself, rather than a certain solution. This problem should be something either you, or someone else experiences regularly, and something that can be simplified into a single statement.
Next, work through that list of ideas, and determine if is it a main problem – one of the top three problems your potential customers are trying to solve. If it’s not, you’re moving into “maybe will purchase” territory, because it’s a problem they’d like to solve, but not necessarily one they consider a priority. It doesn’t matter that you could have the best product on the market for the problem, with the best pricing, and the best support. The reality is they’ll be so focused on their top three issues they won’t have the time or the budget to look at your solution.
How do you find out if it’s a main problem your audience is looking to solve? Start with a general profile of who would typically buy your product. Then, research and find a list of 20 to 50 prospects who meet your criteria.
Send them a message that looks a little something like this.
I’m/We’re looking to spend 15 minutes on a call with [who they are/CEOs/Moms] who are experiencing [problem]. We’re doing research, and don’t have anything to sell. Would you be available for a quick call [date and time]?
Keep the email concise – don’t waste time.
Including a specific date and time for each call will reduce the amount of back and forth email between the two of you.
Send emails to about three times the number of people you actually want to speak to. This way, you have a certain number of “nos” built into your plan, and won’t be scrambling to find additional people to fill in the gaps.
Before the first call, come up with a list of questions to ask them – keep it limited. Remember, you only asked for 15 minutes. You want to make sure they experience the problem, and see how much of a problem it is. You also want to find out how they’re solving the problem now, and whether or not they’d be willing to pay for a solution.
Keep all the answers in a document of your choice. Once all the calls are done, look for patterns. You’ll start to see whether or not this really a big problem, or a nice to have issue.
Next, you’ll look at all the existing solutions customers say they use to solve the problem. They may outsource it. They may create their own workflow with a combination of several tools. You’ll want to go into a market where someone else is already seeking to solve the problem – competition isn’t a bad thing. If you’re not finding anyone who’s trying to solve the same problem, then you’re likely best suited to switch courses.
Now, look at the pains in existing solutions. You want your product or service to be better, so think about how you can make yours better. What do people not like about it? What features is it missing? What could be added to get the job done faster or easier?
Finally, verify your potential customers have a budget for your solution. You don’t need to ask them specifics of pricing, but follow up with some of your prospects about pricing. Ask their thoughts about pricing if you were to build something to solve the problem. Some will tell you they won’t pay for it, some will not commit to paying, but won’t directly oppose the idea, and some will say they’d refuse to pay for it.
If you can, dig to find out why they wouldn’t pay for it. You need at least half of the prospects you speak to to commit to pricing – not a price itself, but the idea of paying for your product or service when you’re ready to launch.
This process validates your idea and creates the bare-bones map for the creation process.
What you did in the gathering ideas stage is a form of market research. It works backwards, with a problem to find the solution. You can do market research with a solution in mind – and there are a number of ways to do it.
- Ask friends and family: Get a group of people together, and ask their thoughts. The closer they match your ideal customer, the better. Your mom and dad are likely going to tell you your idea is awesome, just because it’s yours. Go to people you know you can trust to be honest with you – brutally honest.
- Run a survey: Use something like Google Forms to run your own survey for nothing. This relies on making sure you have the people to take it, though, so if you’ve got a bit of a budget, switch to Google Surveys or SurveyMonkey, where they’ll find people that match your demographics to send the survey to.
- Hire a focus group: This is an expensive way to do market research, but you’ll get valuable insights from a group of people who are exposed to your product/service or concept. The best way to do this to enlist the help of an outside service. I recommend contacting three to five companies that specialize in focus groups, so you can make sure you’re getting the best possible deal for your money.
- Look into secondary sources: The majority of your research will fall into this category. This is research that’s already been done, industry association reports that include market statistics, census reports, local chamber of commerce data, and more. Don’t reinvent the wheel here – make use of the data that’s already widely available for free or cheap on the Internet. Only purchase market research reports when it makes sense to do so.
Find the Competition
Take a look at what the companies that already out there are doing. If you can find a product like yours before you spend the resources to create it, that means someone else spent their resources validating the idea for you.
Coming in later may seem like a disadvantage, but it means you know there’s a market for your idea, and you can see where improvements need to be made – and then make sure your product or service has those improvements.
You should always give people want they want, but to convince people to leave the competition for your offering, you need to give them something better than what they’re already getting. When do you do that, and combine it with stellar customer service, you’re well on your way to building customer loyalty.
This approach works best with software and app based products. Create a basic version of the product you’re selling, and give away free copies to those who are interested, in exchange for their feedback. During the beta testing, you can get insights on everything from bugs and glitches, to layout and feel, colors, features, and function. You can make the adjustments you feel are most necessary based on feedback before launching a full product. As a bonus for your beta testers – you can give them a free version of the full product. It should help generate buzz for the product when you’re hitting the market.
Give Away Prototypes
Make a few of your product – and ask for feedback in exchange. You can also do this if you’re planning on selling digital products. Send review copies to trusted colleagues, or people who’ve expressed interest in your product. Then, pay close attention to their feedback and make adjustments as necessary before the final official launch.
Launch Small Scale Sales with a Third-Party Platform
If you’re selling a physical product, one way to test the idea is to manufacture a limited number of the product, and then rely on third party platforms like Amazon, eBay, and Etsy (if it’s a handmade product, of course) to sell for you. You’re going to lose some money to commissions, but the advantage of using platforms like this is, you’ll be able to get wider exposure than if you were running everything from your own store.
Nobody will know who you are if you start from scratch with your own right away – and you won’t have to invest time in building (or hiring someone to build) your own website and store right away. With the right kind of ads and marketing, you can drive traffic to your third party stores. Pay attention to how well the products are selling there – if demand is so high you can’t keep up, it’s time to scale and go for broke.
If demand is low, even with the right marketing behind it – it may be time to scrap the idea and move onto something else.
Launch a Mini-Version of Your Product First
Thinking about starting a restaurant? Open a food truck first. It’s less financial risk, and gives you a way to make money while you’re testing your concept with your audience. Of course, you’ll have to do a considerable amount of market research to make sure your area is receptive to the idea of a food truck like yours before you begin – but if you get a killer response from the truck? It may be time to go full-on restaurant. Gypsy Queen, an Eastern Mediterranean restaurant in Asheville, North Carolina, began as a food truck. The truck still runs on occasion, and is usual for off-site catering events. Want to test a new menu? Run a special each night of the week – and see which ones sell the most. When your customers ask for it again, or you sell out fast, it’s a good indication it would do well on your regular menu.
Thinking about launching an online course? Start with an eBook. It won’t take you as long as a full course, and it can help you gauge interest in a more in-depth solution. Plus, you can sell the eBook later, at a lower cost, for people who would be interested in your course, but don’t have the time or the money to take it.
Rinse and Repeat
Go through this process with each new product or service idea you have. Once you get established with your first one, your customers will become a valuable source of information for additional expansion products and services.
How do you test and validate your ideas? Tell me in a comment below.