By Gareth Simpson
So you think you’ve got a great product idea. What’s next? Validating your product idea is a crucial early step in any new business venture – one that helps to avoid wasted time and money on a product that in reality, nobody actually wants. It may seem obvious, but it’s a process that often gets rushed or pushed aside in order to get to the “good part.” Too many small business owners make the risky mistake of thinking they know exactly what their audience wants (and will pay money for) when the reality can be entirely different. It’s always better to find out early on if your product doesn’t resonate with your audience as expected – you can then start working on a new idea. And if it does, you’ve given yourself a much better chance of succeeding.
Step 1: What is your minimum criterion for success?
Start at the beginning. Before running any kind of survey or test, you need to determine what success looks like, and the minimum that must be achieved to constitute a success and allow you to push forward. Presumably, you have already identified your niche. Now it’s time to consider factors like the size of the market, the level of demand within that market, and your own budget. Consider the problems facing the market that your product can solve, and how much revenue you will need to generate – especially in the early days – to justify your continued time and effort.
Ideally, your target customer base will be specific, rather than broad. It’s much easier to work with a niche than with a diverse range of customers with different needs and interests. Start small and test your product hypothesis with a small group to see if there are any obvious patterns, before scaling to larger (or different) customer samples.
Step 2: Challenge your assumptions
When we come up with a new product idea, we all make assumptions about who will buy the product and how successful it could potentially be. It’s easy to forget not to take these assumptions as fact – they are just stories we have made up in our heads. As with any new ideas, they need to be tested.
Don’t waste time at this early stage haggling over the minor details. Instead, present this idea in the real world as early as you can. You may find that your assumptions about what people want are way off, in which case, you haven’t spent hours of your time devoted to it, so it’s no great loss. Get to the truth as soon as possible to find out if your idea really resonates with potential customers. It could be out on the street, on the phone, or via digital platforms such as social media. It’s worth interviewing industry experts, analysts and consultants, if you can get hold of them.
Step 3. Validate your idea with an MVP
People often misconstrue the meaning of a Minimum Viable Product, so to summarize via Techopedia:
A minimum viable product (MVP) is a development technique in which a new product or website is developed with sufficient features to satisfy early adopters. The final, complete set of features is only designed and developed after considering feedback from the product’s initial users.
It is, in short, the most pared down version of your product that you could theoretically release. It delivers what is absolutely necessary in terms of features, but there may still be some way to go before it is considered fully developed, whether it’s a product, a piece of software, or a service.
So why not wait until it’s complete before releasing to the public? Because again, you could be riding on your assumptions, which might be wrong. From the initial set of features, you can gather feedback to inform the direction that the product will take, allowing it to develop in a way that will make the finished result an optimal product for customers. You may find it develops in a slightly different direction than you originally considered – and all for the good. Never underestimate the importance of understanding and listening to your target market.
Step 4. Run a crowdfunding campaign
Online crowdfunding campaigns provide an excellent way to both validate a product idea, and to have customers lined up before you product is even finished. This is a great advantage when it comes to approaching potential investors. Crowdfunding websites like Kickstarter and Indiegogo are ideal places for entrepreneurs to not only test the waters with their new products, but also to build up a rapport with their target audience – and future customers.
Of course, it’s not always as easy as it sounds to run a successful crowdfunding campaign. Make sure you take all the necessary steps to inspire and inform your potential supporters. If you succeed and meet your funding goals, then you have a newly formed group of customers and investors in one – and you know there is a demand for your product. If you fail, then you have learned that perhaps this idea is not as viable as you thought. Either way, take into account that you will still have to deliver on the ‘awards’ you have promised.
Step 5. Set up a test store
Another great way to test whether there is enough demand for your product idea is to set up a temporary online store, using your Minimum Viable Product. There’s little risk and upfront investment involved, particularly if you create a free online storefront using trial software available at sites like Shopify. All you need to do is set up a store (which can be done in a day or less) and drive traffic to it using online advertising, such as PPC and social media ads. In the long-term you will of course need to consider SEO strategy, but for a test store, you need to be seeing instantaneous results.
Bear in mind that when advertising products to pre-order, you may be unable to capture payments right away (this is the law in some areas), and will need to wait to collect payment until after the product has actually shipped.
Starting a new business can be intense (and you can quote me on that) but if you have strong reason to believe in your product or service, you’re in a much more stable position. Taking time in the early stages to really understand your industry and your customers is never wasted, and will probably save you a lot of money in the long-term.
What other methods of validating a product idea have worked for you?
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Gareth Simpson has worked as an SEO professional for almost a decade now and has recently started his own content and SEO agency. His SEO specialties are managing content and blogger outreach for a range of multinationals, as well as running two successful e-commerce websites.