Every day a new startup comes into the world, full of hope and promise, and every day one dies. Working alongside entrepreneurs, we see first hand how often promising startups fail, and it can be depressing. These are the most common excuses: ‘Our product was bugged!’, ‘Wrong place at the wrong time!’ or ‘We weren’t visionary enough!’ Sound familiar?
It’s time to look past the preconceptions that we all have. Startup success is rarely a consequence of luck, good genes, or being in the right place at the right time, as the startup gurus and media would like us to believe. In reality, startup success can be engineered by following the right process. Although there are many steps in this process, the most crucial is something called ‘idea validation’.
When you are starting up your startup – it has that title for a reason – you know that the two most critical factors are time and money. They’re indispensable resources. What most entrepreneurs don’t realize is that their business idea, their baby, can go bust before their Post-It strips run dry if they’re not willing to put their idea out there for real feedback. The results could be crushing, but they could also save your business.
There’s no tried-and-true way to get the proof of concept that you need, but we’re going to share with you some strategies that we have seen work for others. After all, there are no guarantees when it comes to getting your startup off the ground, but sometimes you just have to throw things to the wall and see what sticks. Here is what we’ve discovered has the most tackiness:
Minimum Viable Products
Minimum Viable Products, or MVPs, are limited versions of your product that can provide you with the most valid learning with the least effort on your part. This is the single most effective way to test your idea because it will give you a sense of whether or not there is demand for your product and if people are actually willing to pay for it. These are the fundamental qualities that you want in your product. Really, it’s the only reason you’re starting a business in the first place.
The best part is that you can make an MVP today before spending money on things that are irrelevant. There is immediate gratification as well because you have instant proof of concept. This is the best way to make sure you’re not delusional about your baby. Once you have the proof that you need, then it makes sense to proceed and spend more resources.
MVP’s can vary in levels of complexity, and there’re several ways to test them. Think about these different methods listed below and pick the ones most applicable to your product or service.
1. Customer Interviews
Find out where your potential customers hang out and hit the streets. Start asking open-ended questions to understand if they can relate to the problem that your product is going to solve, and whether they want this problem fixed in the first place. Inquire about their current user journey with this problem and propose the solution: your product. Take note of their reaction. If your assumed problems turn out to be not as important to the customer, you still have valuable data that can help you pivot what you’re selling.
2. Landing Pages
The Landing Page is the first page visitors and potential customers come to when they’re led down the funnel towards your product. They’re most often used for marketing purposes but they’re a great way to test the validity of your idea. You can include all the information regarding your product and see the number of people that signup. You can also test different features or price points by changing the description and checking the associated signup rates. This is a great way to see how subtle differences are much more profound than you think when it comes to the customer’s decision making.
3. Ad Campaigns
Ad campaigns are a great way to validate your idea, and you can use them if you have a landing page. Head to Google Adwords and set your bidding option to Automatic Bidding to Maximize Clicks with a max bid target of $0.50, and you’re on your way. We suggest that you put your budget around $20/day. When the campaign is set up, choose a couple of keywords and write some ads that explain your product and appeal to your target. (You’ll have to remember to set up conversion tracking). If you only get a few Leads you need to re-evaluate things a little, but if you get tons, you might have a winner.
A crowdfunding campaign is a powerful way to see if your idea appeals to the broader public. Consider building a connection to your tribe and invest a little time in pre-marketing to generate some buzz. Encourage feedback and questions as much as possible and you’ll gain new insight into what people out there think about your product. In the end, even if you don’t get the amount of funding you seek, you’ll get a good indication of how many people would buy your product.
5. Wizard-of-Oz MVP
A Wizard of Oz MVP is a front that looks like a real, working product (website or app), but in reality, you manually carry out product function yourself. For example, if you want to create a platform that connects entrepreneurs with mentors, whenever you get a request, you start by manually calling each of your mentors until you find the right fit. Wait to take this step until you have validated that there’s enough demand to develop a platform with an automated back-end infrastructure.
6. Social Networks
Using social networks to test MVP’s can be similar to a Wizard-of-Oz scenario, and equally as effective. When The Code Venture first started out, we wanted to test if there was a market for entrepreneurs looking for tech co-founders. Before ever building our team and developing our offer, we created a Facebook page called ‘I Need a Tech Founder’. It was only when we saw hundreds of people and requests coming in that we set-up shop.
7. Core Feature MVP
Sometimes it’s best to focus on a single feature of your minimum viable product to economize resources and avoid unnecessary distractions. Companies like DropBox and Google started with Core feature MVP’s. To find out what to focus on, think back to the customer’s journey, their problem, and figure out the feature of your product that solves it. Release an MVP, and if the feedback’s good, you can start building on it. If the feedback is poor, it’s time to go back to the drawing board.
The point of all this is: You don’t want to waste resources on building your startup until y0u know you have a brilliant product on your hands. That means not assuming you’ve got a pixel-perfect creation until your potential users or clients feel the same way. Don’t jump off a burning building unless you see a flame!