Startup Idea Testing
Michael Allen of Bouncepreneurs gives Top 10 Tips for Startup Testing
Do not fall in love with your startup idea
Biggest fail by far. Be objective. Stay detached from your startup idea. Just because you love knitting or wood whittling, do not expect everyone else to share your passion.
Find customer need not markets
That is your real task. Find the need. Find the unsatisfied need or partially satisfied need and you are in business. Markets, smarkets! Research the need for your startup idea.
Don’t do a survey in your startup idea testing
A questionnaire to evaluate market potential, frankly I think they have than had their day in startup idea testing. Customers rarely tell you what they will actually do accurately. What you need to know is will they actually BUY your product or service.
4.Consider MVP Minimum Viable Product
MVP is gathering momentum as an alternative to market and customer research is startup idea testing. You build the cheapest practical version of your product, it can be a presentation or model rather than the real thing and try to sell it for cash. If you get deals make them happen. Do not build to order. Stick to your original concept. This method can take no more time or cash than the classic research process. If it fails you’ve saved at least 6 months and lots of wasted cash.
Information is everywhere, quality information is rare
Market research is everywhere. Often poor posing risk to your startup idea testing. I once worked really hard to size a Southern African market. A competitor market research did not even visit to conduct any on the ground intelligence. They reported 3000 customers in that market. There were in fact 30. For an entrepreneur investing in selling and marketing in that country, expecting 3000 prospects that poor research would be ruinous. So pick your data sources with care.
Sizing your market is not the same as customer research
Online data can be useful in helping you size a market. But you will need customer understanding too. YOU are the best person to assess customer need and you are best doing this through talking to and seeing the “whites of your potential customer’s eyes.”
Henry Ford would be selling faster horses
Henry Ford is reported as saying “If I had listened to people I would be selling faster horses!” So if you have a product or service that you really believe is different and breaks NEW ground then go for it. But be sure of it!
Ignore the tired consultants
In startup idea testing, there are still too many people trotting out the “Do a questionnaire” advice to entrepreneurs. Forget this approach it has more holes than as Swiss Cheese. I have been qualified and practicing market research since 1988 and have lost faith entirely in the questionnaires value to new startups. Why? What people say they will do and what they actually do is most often hugely different.
One of the best startup idea testing methods is to find a parallel to your business outside your country. Contact the owner, tell them that you plan to do the same thing in your country. Business people who do not feel competitive threat will gladly talk about their own business. If they will share margins and costs with you and customer buying patterns you will really be learning. Sure people do things differently around the world, but seeing your business type live in action elsewhere is premium research for sure.
Do not ask family and friends
They love you or they hate you. But they are not reliable in assessing your business idea. Simply the worst form of startup idea testing.
Michael Allen is the Author of “Bouncepreneurs Successfully Bounce Back after Business Failure” available on Amazon Kindle