Validating a product idea: an all-important step to take to avoid wasting time and money building a product nobody wants. It seems like an obvious thing to do, however many times it’s a step that gets pushed aside.
Why? It could be because:
- We think we already know what our audience wants and will pay for.
- We’re anxious to actually begin creating something and rush through the research phase.
- We don’t know how to validate.
- A combination of all of the above.
I’m fascinated by the idea of product validation – spending time upfront to confirm that what it is we’re about to build is actually something people want and are willing to pay for.
If you find out it’s not, then good – you will have avoided wasting time and money and can move on to something else. If you do validate your idea, then you’ve given yourself a much higher chance of succeeding with that product. Your execution of that product, the sales page, the marketing, etc. play an obvious role in the success of that product, but at least you’re not as worried about the product itself being a cause of failure.
In this post, we’re going to explore 6 ways to help you make sure that what you’re thinking of selling will sell.
1. Share Your Idea
The biggest mistake people make when creating a product of any kind is keeping the idea to themselves. You must share your idea with others.
As mentioned by Jon Saddington, uber-successful serial entrepreneur featured in Session #61 of The SPI Podcast:
…Because this is what happens when you start sharing that idea–it starts becoming refined. And a refined idea is a much more mature idea. You’ll quickly get feedback – instant, guttural feedback from people, and especially complete strangers that say “that is a stupid idea” or “that’s a great idea but have you thought about this?”
Of course, a big reason why we don’t do this is because of the possibility of other people taking our idea. Jon goes on to share in our interview:
…Here’s the difference between you and the next person on the street who has a great idea–if you’re committed and you love the idea, you will actually see it to completion. Most people never execute on their ideas because they just never execute. The reason I’m a success as an entrepreneur, and why many other entrepreneurs are a success is simply because we do it. We don’t just talk about it, we do it. But talking about it is where it starts, and because when you start talking about it with other people, you continue to drive the motivation. You continue to build momentum, and you continue to get excited on a much better and much more refined idea.
The more you share your idea, the better that idea becomes. or the more apparent that the idea is not a good one. Share it with friends, family, people in your mastermind group, people in your community and even complete strangers!
I personally made the mistake of holding a couple of product ideas back in 2010 when I dove into the premium WordPress plugin space. I could have saved over $10,000 in development costs if I had simply taken the time to ask people their opinion on my plugin ideas, rather than keep them a secret so that I could unveil it later down the road.
2. Find Products Like it That Already Exist
Most people think competition is bad – especially if someone else has “beat you to it” and built and marketed your product before you.
Entrepreneurs, however, know that competition is a good thing – especially if you find a product like yours before you spend time and money to create it.
Because someone else has already spent the time and money to validate that idea for you!
Plus, you have an advantage coming in later – not only knowing that there’s a market for that product – but also knowing what can be done better.
If you’re creating a course, for example, search through a course directory like Udemy to see if a course like it already exists. If so, see how popular it is and what people are saying about it already. What do people love about it? What do people want more of or feel is missing? Keep note of those things because your ultimate goal is to create a better version of what’s already out there.
Give people want they want – yes – but give them a better version of what they are already getting. (click to tweet this)
3. Pay Attention to “Signs”
In 2008, when I was just starting to think about monetizing GreenExamAcademy.com, I was lucky enough to have a few people in my audience tell me they wanted a more convenient way to study for the LEED exam, rather than just reading page to page off of a website. A few people even told me they would buy a book if I had one.
You can’t get any more clear than that. (Actually, yes you can – but more on that later in this post).
Other times, however, the signs are not so clear, but they are there.
Last year, when my 5-day per week podcast AskPat was launched, a custom player that was built to help serve the show became a huge attention-grabber for a lot of other podcasters. I received numerous emails from people asking me where I got it from and how it works, and then it finally clicked that this was something other people wanted too. Then, after having private discussions with a number of podcasters, I pulled the trigger to turn it into a distributable premium WordPress plugin, which later became known as The Smart Podcast Player.
Chris Ducker also tells a story in a presentation he’s given in the past about how Virtual Staff Finder was born. In one of his blog posts about using VAs (virtual assistants), someone left a comment saying he wished there was a service that could help find VAs for him. A couple of months later, Chris executed on that idea and VSF is now the top resource on the Internet for finding virtual staff.
It’s all about reading your audience and creating that solution that people may be asking for, although they may not (and are usually not) asking you directly in a completely obvious way.
4. Create a “Mini Version” of Your Product First
One of the cool things I’ve learned about food trucks since starting FoodTruckr.com is that a lot of people who start a food truck are actually aspiring brick and mortar restaurant owners. They use a food truck to validate their restaurant idea, test their menu and build a brand following before paying a lot more money to start an actual restaurant.
You can do the same thing with your product. Instead of going all out with the full creation of a product, you can create a “mini version” of that product and see what the response is like. It may not be 100% fully functional, but you’ll get honest feedback on a version people can sort of use, instead of just the idea of that thing.
This works particularly well with software.
A great example that comes to mind can be heard on Episode #13 of Startup, one of my favorite podcasts. Alex Blumberg, the host, creates a half-working version of an app idea that he had, and he shares it with people and listens to the response as they use it.
The response isn’t pretty, but it’s necessary for him to figure out whether or not to keep going with it.
If you’re creating a course, perhaps you dedicate time to creating the first module – and that’s it. Share it with power users in your audience and ask to record their voices as they walk through it with you. It can be as simple as a Skype chat. If you don’t have an audience, you can pay a few people to go through it and give their first impression.
If you’re writing a book, outline it and write the introduction, and then get feedback from those who read that. Is this a book that looks interesting to you, and why or why not? What would you look forward to reading the most in this book, or what do you feel would be missing based on the table of contents?
5. Sell Before You Build
Most of the above tips go into making sure you’ve got a good potential idea on your hands, which is obviously important to understand up front so you can continue to build it out the right way.
But, if you truly want to know whether or not a product will sell or not, you’ve got to get people to pull out their wallets and actually pay you for it.
Notice how I didn’t really get into surveys or simply creating landing pages to build an interest list. Those can help, but when you ask your audience “would you buy this”, many may say they will, but when it comes time to pay they don’t. Having a list of 1000 people who claimed they will buy could end up leading to disappointment.
Building a list is important, but it’s not a true indication of whether or not a product will sell.
True validation comes from people actually paying you for that idea. And yes, even before they can get it.
We’ve talked about this kind of validation in the past here on SPI. In Session #146 of The SPI Podcast, Jarrod Robinson shared how he was able to earn several thousand dollars from his audience before the actual creation of his product, an app idea he had for his target market of Physical Education coaches.
Recently, Jarrod shared even more details about the results of his $15,000 pre-sale launch on his site here.
John Lee Dumas from Entrepreneur on Fire has also successfully pre-sold a number of his offerings before creating them. Podcaster’s Paradise, as well as Webinar on Fire were presented to his audience as solutions that he was going to build if there were a certain number of people interested, and he was completely upfront and honest about that to his audience. If he didn’t get to those numbers, then he wouldn’t build those things. Easy enough.
He indeed asked for payments from people upfront (again, before the product was even created) to validate products, giving customers a “champion” or “VIP” price for doing so.
Both of those products were validated, then John and his team worked hard to actually create the courses after that. You can bet that after selling those products and meeting his goals, he was motivated to do the work to put those things together and make them awesome.
These examples come from people who already have built an audience, but what about pre-selling strategies for those who don’t already have an audience?
This is where paid advertising comes into play. You’re going to have to pay a little bit to discover whether or not a targeted audience on a platform like Facebook, for example, would be willing to pay you for that product idea.
In a similar fashion as John’s example, you’ll want to truly understand the ins and outs of what this product will become so you can setup a sales page as you would if it really existed. You could drive traffic directly to that page from Facebook, or you could try something like collecting registrants to a pre-sell webinar, which could convert even higher for you since you’d be building a relationship with those prospects at the same time before your pitch.
Either way, you’ll want to be honest with your customers and tell them the product is not yet created, but like John, you give them something for coming on early and say straight up that you’ll build the product if you have a certain amount of interest.
Tim Ferriss talks about a similar strategy in The 4-Hour Work Week, using Google Adwords to test product ideas and gauge buyer interest.
Does this actually work?
This article on Entrepreneur.com shares that Alex Brola, co-founder and president of CheckMaid.com, an on-demand cleaning service, used ads to verify their idea:
“We actually validated [the idea] without having any cleaners to do the cleanings. We threw up a site, a booking form, a phone number, and ran some [pay-per-click] ads through Google and Bing, and saw what the conversion rate would be had we actually had cleaners.”
And actually, there’s a service that can help make this kind of thing happen too. QuickMVP claims that using their service, within 5 minutes you can setup a landing page, send ad traffic to it and quickly validate your idea before you spend any more time and money on it. Pretty cool!
Oh, and by the way, Dropbox, now a billion dollar company (which I use myself every single day now!) used this same technique to get thousands of signups before writing any single piece of code too!
And finally, a very popular way to validate a product idea, which combines #5 from above with marketplaces where people are looking to pay for exciting stuff that doesn’t exist yet, is crowdfunding.
Sites like Kickstarter are crowdfunding platforms for entrepreneurs testing the waters. At the same time, they are building a rapport with their potential future customers too.
Run a successful campaign, you’ve got a product with paying customers already! If you fail, then you’ve learned that product may not be the best idea after all.
The only caveat with platforms like this is that if you do run a successful campaign and meet your funding goals, you will have to deliver on your pledge awwards, and pledge awards (goodies given to people based on what level pledge they backed your idea at) can be a very exhausting part of the process.
It’s Not Easy…
It’s not as easy as a coin flip to truly validate a product or idea, but it’s a whole lot easier putting in that time and effort up front than wasting a load of time and money down the road when you find out your product didn’t turn out like you had hoped.
There’s no real way to 100% guarantee of the long term success of a product before it’s actually out there in the market, but using these techniques you can definitely increase your chances.
Thanks so much, best of luck, and if you find this post useful, please use the sharing buttons below to spread the word!
Content retrieved from: http://www.smartpassiveincome.com/product-idea-validation.