The best business ideas solve problems. If you can solve a big enough problem, you can bet people will give you money. So, instead of building out a product immediately, it’s best to make sure there’s a large enough market. Do enough people have the pain that your idea will cure?
Market research is cool, but it’s not the be all end all regarding validation. As much as I love data, I’d trust a series of tests more than I’d trust statistics collected by some agency. What’s more, I trust paying customers over anything.
So how can you validate your business idea with limited funds?
Don’t build much – yet
Instead of wasting your time building out an MVP that may or may not acquire users, test the idea first. Dropbox had 75k+ people signed up for their beta version before they launched.
One way to test whether or not people share your pain is to build a landing page. To do this, you need:
- A landing page – Use Weebly, WordPress, Wix, or another content management system (CMS) to build out a quick landing page. A good landing page does three things –
- Repeats the message from the ad that users were directed from (more on this in a minute)
- Presents the value that you have to offer. Gather testimonials from friends who are excited about the release of your product; I can’t wait for Product X, it’s going to save me 25% of my time spent on calculating metrics! – said your best friend, CEO of Her Startup
- Includes results-oriented benefits like, will save you 4 hours per week NOT will save you time. OR will decrease your churn by 3%, NOT will help you keep customers. Get specific about the results your product delivers.
- Make people emotional – Use urgency or scarcity. Great landing pages have a lil bit of both. “get the early bird price,” “invite only,” or “limited time only” – this type of language appeals to users’ amygdalas (the animal part of our brain obsessed with survival, food, and … ).
- A digital funnel – If you think your users are on Facebook, then set up a small Facebook Ad ($100-$200 budget). You want to drive traffic from your ad to the landing page you’ve created, and ultimately have people give you their email address because they’re stoked about your product launch.
Make sure that the copy and branding of the ad are in sync with the landing page. Example: If your ad says, Want to find out how Product X can save you 4 hours of time per week?
Then your landing page should almost repeat that exact message. Like, Product X saves managers an average of 4 hours per week. Here’s how.
- Math – Determine what the basic version of your product will cost. Will you charge monthly? Will there be a free trial? Considering these numbers, think about the results of your landing page. If you could convert 1% (a little below industry average) of your subscribers to customers, what would that mean for you revenue-wise?
Say we had an idea for an online course that will teach aspiring founders how to calculate startup metrics. We plan to charge $10 per month.
We want to test this idea, so we create a landing page detailing the course and highlighting the benefits.
Next, we set up a Facebook Ad and an AdWords ad targeting startup founders and keywords “calculate MRR” and “best metrics for SaaS.”
We run our campaigns with a budget of $500 ($250 for Facebook, $250 for Google) and collect 5,000 email addresses.
If we convert 1% of 5,000, that will give us 50 users or $500 in monthly recurring revenue (MRR).
According to those numbers, we might break even on our ad spend in our first month. We might decide that it’s worth spending a few grand to build out a minimum viable product (MVP) on WordPress with a freelance developer. Or, we could pay $29 to host our course on an off-the-shelf solution like Teachable while we test further.
Click here to access our landing page template
Even simpler than a landing page
Posting on your social platforms. I used my personal Facebook page to gauge interest in a product I thought might be worth spending some time on. I wrote a lengthy post describing my own pain (that my product idea aims to solve). I asked my friends if they share that pain and if so, would they be interested in my product? I got lots of comments and even some email subscribers.
From here, I decided it was worth creating a landing page and putting some money into an ad. I also stalked my friends who were most excited about the idea. I noted their Facebook interests, groups, etc. so that I could target similar demographics in my ad campaigns.
Nothing is valid until you’ve got customers
Testing with a landing page or social post is by no means the final straw when validating an idea – it’s merely a test. Tests like these are safety nets, supporting your idea while you hash out whether or not it’s worth an investment of your time and money.
How do you know that your idea is worth money? The only way to know for sure is if people give you money for it!
Getting your first customers
It’s much easier to get someone to give you their email address than it is to get their credit card info. But, hopefully, you’ve got a decent email list from the landing page or social posts that you used to build anticipation and gauge interest. Use a free tool like MailChimp or Benchmark to send an email to your list letting them know you’re gearing up for launch.
Don’t wait until launch to send this. In fact, you should send an email a week with some relevant, valuable content to keep your list engaged until your product is ready.
You’re going to want to start with the bare essentials. In business, the bare essentials are called the MVP, or minimum viable product.
When your MVP is ready – a good launch email includes
1. A statement about why your prospects are receiving the email
Hi Name, it’s Morgan from Startup.
You were pumped about My Product last month, and guess what? We’ve just launched!
2. Emotional pull – either positive or negative – like save money now, scarcity, don’t miss out, etc.
I don’t want you to miss out on the opportunity to sign up while our price is at an all-time low. We’re only inviting 300 people to the platform!
3. A Call-To-Action (CTA) asking the recipient to DO something, like subscribe.
So, click this little button to subscribe now.
*Bonus Add a testimonial or guarantee. I usually work this in between steps 2 and 3. Include a couple of testimonials you’ve received from your friends or beta-testers. Or, get all infomercial – telling your prospects there’s a 30-day money back guarantee if they are not 100% satisfied. The guarantee thing might sound corny but, it works.
Name, look at these nice things people are already saying about us 🙂
“This Product blew my mind the first time I used it” – Jake, CEO of That Company
*“Killer design and saved me 2 hours of time in my first week” – Mary, CEO of Other Company*
We like our customers HAPPY. So, if you aren’t 100% satisfied after 30 days of use, hit us up for a full refund.
This launch email is just one of many ways you can attract your initial users.
Let customers lead the dance
Users are the brain of your business. They’ll tell you exactly what they want and what they don’t want. They’ll tell you where to find more people like them. But, you’ve got to read the signs. Monitor user data like it’s your full-time job.
When your customers are in charge, you’re destined to keep them happy. Mind your data, solve their problems, and build the product they need. If they’re giving you money, then consider your idea valid.