Looking for ways to validate the market opportunity for your product/service before investing countless hours and dollars? Many entrepreneurs have invested thousands, even hundreds of thousands of dollars in creating a new business only to realize that no one purchased their product/service. I have found it very common for people to give me positive feedback about my business ideas, but don’t purchase my products when it’s time to put up the money. Below are 3 powerful strategies I’ve used to test an idea’s potential and generate real cash for my prototypes.
Before perfecting your product, you should create a Minimum Viable Product (MVP). A MVP is the smallest thing you can build that delivers customer value. For a physical product, you should create prototypes of the core features and test them with potential users. For online businesses, you can test out the idea by pre-selling product or setting up a landing page prototype and collecting e-mails.
Strategy 1: Using a Pre-Sale To Validate Your Product Potential
Strategy 2: Using A Landing Page To Validate Your Product Potential
Don’t have a product to sell? You can use e-mail sign-ups as a proxy for purchase interest.
Strategy 3: Creating a Basic Prototype or App
When creating a MVP of an app, remember to begin testing the core features of your app, without all the extras. If you’re a coder, build the basic blocks of your software then test with users continuously along the way. If you don’t have the experience or time to code the app, you can use tools like Axure, Balsamiq, or Marvel to create mock-ups. Looking for examples? Visit ProductHunt for daily MVP inspiration.
Set up Success Metrics
Create a list of success metrics before you begin the experiment to determine what is a positive, and negative outcome. The success metrics should include the minimum outcome you will accept in order to continue on. It is usually expressed as a fraction, such as:
After you definite these elements and run the test, analyze the results and determine if you success metrics were met. Having these pre-defined will hold you accountable to the results. If the test did meet your results, then you can move forward and test the next aspect of the project, or continue to develop it. If not, then you will need to re-evaluate the product/service, or the execution of the test. Test and repeat this process, and you will be on your way to creating a great product that people will pay for.
Before perfecting your product, you should create a Minimum Viable Product (MVP). A MVP is the smallest thing you can build that delivers customer value. For a physical product, you should create prototypes of the core features and test them with potential users. For online businesses, you can test out the idea by pre-selling product or setting up a landing page prototype and collecting e-mails.
Strategy 1: Using a Pre-Sale To Validate Your Product Potential
- Gather a list of e-mail addresses of people who may be interested in your product/service. Reach out to friends, colleagues, bloggers, twitter followers, and others to collect a list. I personally reach for a goal of at least 100 e-mails.
- Send pre-sale emails to your list describing your product/service, and initial information. In the e-mail clearly describe what they are getting for their money, why you are doing a pre-sale, and the time when you will deliver the product to them. For example: “I’m building a 3-D printed phone case business and am offering a pre-sale for the first products. The money will go towards the initial material purchase order and I will deliver the cases in 1 month.”
- As a result, there are two things that can happen:
- Everyone on the list buys your product, and you know people are willing to pay money for it.
- No one buys your product. The good thing is that you didn’t waste any money or time, and you can learn why people didn’t purchase it through follow up e-mails.
- Why this works:
- People purchase products if it adds value to their lives. Most people are willing to pre-pay for early access if your product truly will solve a problem for them.
- Test the ideas potential instead of wasting time and money trying to develop the perfect product
- Receive real money from your customers and help jump-start the development process
Strategy 2: Using A Landing Page To Validate Your Product Potential
Don’t have a product to sell? You can use e-mail sign-ups as a proxy for purchase interest.
- Create a simple landing page for your product using a site like QuickMVP, including your value proposition and pricing.
- Create a link on the page that sends them to a survey form, where they can input the information you need to deliver your product/service.
- Promote your site through Google AdWords, Facebook Ads, or by e-mailing it to friends to increase visitor traffic. QuickMVP has this functionality built-in, otherwise you can set up AdWords
- You can track visitors to your site by setting up Google Analytics. The most important thing to measure is conversions, what percentage of visitors that visit sign-up / buy your product/service
- If your product/service is ready to be delivered, you can coordinate directly with the customer through e-mail to fulfill their need.
- If you’re not ready to provide your product/service, you can pre-sell it to them. If pre-selling, include what you are promising to provide, why you are doing a pre-sale, and the time when you will deliver the product to them.
Strategy 3: Creating a Basic Prototype or App
When creating a MVP of an app, remember to begin testing the core features of your app, without all the extras. If you’re a coder, build the basic blocks of your software then test with users continuously along the way. If you don’t have the experience or time to code the app, you can use tools like Axure, Balsamiq, or Marvel to create mock-ups. Looking for examples? Visit ProductHunt for daily MVP inspiration.
Set up Success Metrics
Create a list of success metrics before you begin the experiment to determine what is a positive, and negative outcome. The success metrics should include the minimum outcome you will accept in order to continue on. It is usually expressed as a fraction, such as:
- I expect X number of the Y number of people in the test to exhibit behavior Z
After you definite these elements and run the test, analyze the results and determine if you success metrics were met. Having these pre-defined will hold you accountable to the results. If the test did meet your results, then you can move forward and test the next aspect of the project, or continue to develop it. If not, then you will need to re-evaluate the product/service, or the execution of the test. Test and repeat this process, and you will be on your way to creating a great product that people will pay for.