You have an awesome idea and perhaps have gotten started on working on it, but do you know if anyone else cares? Is anyone ready to say “take my money now please”!
Of course as entrepreneurs and business owners that is one of our goals. Even if it is secondary because we are passionate about what we do or perhaps it’s a social endeavor, we still need money to keep the business flowing, growing, and operational.
Here is a quick list of five LOW COST tips you can use to validate your business idea before you waste more valuable time and hard-earned money on it.
If you find your business wasn’t cut out for the market it doesn’t necessarily mean you call it quits because you can take the feedback you’ve obtained from these tips below to PIVOT and retry. Keep adjusting until someone bites!
Tip # 1 – Clearly define the problem that your solution addresses
Don’t get too technical and try your best to describe the solution you offer with a sentence or two (think elevator pitch).
If your idea is too complex, simplify it, and if you are having trouble doing that, perhaps it’s not ready for the market. If you fully understand the solution you provide you should be able to explain it as simple as possible – no excuses!
Start to put yourself in your customer’s shoes and think as they would. Once you’ve got your list, create bullet points on benefits you offer with your service or product.
Problem – millennials are always on their phone, especially around college campuses, and restaurants aren’t taking orders online which is convenient and fast
Solution – we create an easy-to-use mobile app that displays visual and engaging menus so college students can place orders on the fly right from their phones
Tip # 2 – Who is your target audience? Create personas.
A persona is a like a “fake” customer profile that you give a name, interest, education, and backstory to. You can even assign it a picture (just Google search any profile image).
You start to play around with this character and get to “know” them. It helps to REALLY put yourself in your ideal customer’s shoes and think like them.
Start to bring them up when thinking about your service or product. What would “Chris” do, like, react?
This step will be very useful in the following tips.
Tip # 3 – Create your MVP
An MVP is your minimum viable product. It’s the most basic form of your product, idea or service offering. You don’t have to offer a tangible service or product for this to work.
Take a remote control for example, if these didn’t exist and I was to create an MVP of it, there would be a large block of plastic with one button: on and off. That’s it. I would then show it my target audience (couch potatoes) and they would say something along the lines:
“I can turn it off from my couch, sweet! What about also turning up the volume?”
Then you go “a-ha” great idea, let me add volume controls. So now the iteration of your MVP has power and volume and you keep going until you have a product that ideally serves your market.
Sometimes it can be a bit trickier to create your MVP so use this sub-tip:
On a blank sheet of paper (or I like to use the whiteboard) start to brainstorm on the idea of:
“If my business or idea was a website right now, what are some of the sections or pages it would have?”
For example if my idea was to open up a contemporary shoe store with unique pattern designs for the millennial generation and if I had it as an e-commerce website, here are some of the features that would be on it:
- multiple pictures
- produce information landing pages
- checkout cart
Then after each feature start listing additional sub-features below it:
- multiple pictures
- high resolution images
- zoom in/out feature
- print/download picture
- email or share on social media button
- product information landing pages
- bullet point, easy to read section
- fitting details – displays how it fits the model to give general idea of how it would fit you
- material details
- color options
- size options
- checkout cart
- fast and easy checkout with social media login or guest access
- save for later cart
- financing available
- ship to someone else feature (for gifting)
Now number these features from HIGHEST NECESSITY to LOWEST NECESSITY and highlight the highest numbered only. The circled features make up your MVP!
Tip # 4 – Create an MVP landing page
Go online and search free online web builder (there are many like Wix.com) and start to mockup your landing page for your MPV.
Start by listing what you are offering is in one or two sentences (tip #1), then list the benefits your customers get out of it (tip #2), finally list the features and highlights of your product (first part of tip #3).
If possible follow it by some customers you’ve tested your product with. If you haven’t yet, look for local events where you can pitch your idea for free, like Idea Tap at Flywheel. Use the feedback from the audience to generate reviews of your product.
List those reviews on the website and then end the site with a call to action section.
A call to action would be the “Sign up now” button you normally see online. Except your product or service isn’t out yet, so when users click on sign up, pay now, subscribe today, etc., it’s going to go to a page that states something along the lines of:
“We haven’t launched yet, but thanks for showing your interest! Put your email below to get notification of our launch!”
Tip # 5 – Generate traffic for your MVP landing page
Go on Facebook and look for groups where your target audience might hang out, use personas from tip #2 to figure that out. If you have spendable budget, put out a small social media ad to target your ideal client and bring them to your site.
At this stage the most important task is to get as much traffic to your website as possible so you can measure their interest.
Setup key performance indicators (KPI) like:
- time spent on site
- bounce rate
- email sign ups (tip #4)
You can do all of this by getting a free account through Google Analytics and checking your metrics daily, weekly, monthly and quarterly.
If you notice very little engagement and high bounce rates, consider making small changes to your website and then remeasuring your KPI’s. If it’s improved then you are on the right track, and if it got worse revert back to your last site version. Keep iterating until it’s just right.
Once you’ve generated enough data (around a quarter or two of data) you’ll be able to tell if there is market interest.
If a large amount of visitors tried to sign up, but got your message that you aren’t officially launched (tip #4), then this indicates they’re ready to use your product or service.
Make sure that your landing page includes an option for people to leave feedback or place a survey on one of the pages.
Use this information to further modify your MVP and cater it to your target audience.
You’ll also receive data on the types of people that visit your site through your analytics account. Examples include things like gender, demographic, location, interests, and more. This information can be used to further hone your target audience.
Using these five tips are low in cost and take little time to implement. All the data you collect will help inform you on market interest and also provide feedback on how to iterate your idea. You can use the data to validate your business and/or pivot. You can also use the data in your pitch decks, presentations, and investment requirements.
If you have a startup and want to learn more amazing tips like the ones above, we recommend you attend the “How to Start a Startup” each Wednesday at Flywheel. Learn more about this event here.
Flywheel Community Network Collaborator