Got a great new product idea and want to start making money from it? Here's a sequence of quick and low-cost experiments to make sure that you're building something customers want before you launch it.
If you would like to learn more, I highly recommend reading Testing business ideas.
1. Customer Interviews
Whatever your business idea, you should always start by talking to your potential customers. Interviewing your customers should give you an idea of the jobs they have to do, what pains they experience and what gains would make them happy. With this knowledge you can design your product's value proposition to fit your customer.
Remember that what customers say may not line up to what they actually do. You can mitigate this somewhat by making your questions conform to "The Mom Test" - don't ask whether people think your idea would be of interest, but ask them about the problems they are actually facing and whether they have worked out any make-shift solutions.
Even applying the Mom Test, you still need to get a good idea of what your customers will do in real life, so it is important that you follow up with several more experiments.
What you should learn
Desirability: Customer jobs, pains and gains
Viability: Customers' willingness to buy
Referrals: Ask whether your interviewees know anyone else who might be interested
2. Search Trend Analysis
Checking out what your customers are searching for online is a quick and low-cost way to perform your own market research.
Tools like Google Search Trends and Google Keyword Planner let you see the popularity of different search terms at the same time as showing how much it would cost to promote your website.
When you carry out your analysis, consider what people might be searching for. People searching for "Unique Gift Ideas" could become paying customers but would need to be convinced that your bespoke jigsaw printing service is the solution for them. On the other hand, customers searching for "Custom Jigsaw Puzzle" are probably more likely to buy from you.
What you should learn
Desirability: Is this something where a significant number of people are already looking for a solution?
Viability: Search trend analysis tools will highlight how big your potential market is and how much it will cost you to promote your website
3. Prototype
Once you have a good idea of your target audience and what they are looking for, you can use that evidence to build a prototype to test out on them.
Your initial prototype turns your product idea into something tangible, but remember that you only need it as an aid to test out with customers.
Work out the quickest and cheapest version of your product — don't worry about being able to scale up to mass-production at this stage. A few options you could use are:
- 3d printing
- White label (add your own packing and branding to an existing product)
- Adapt an existing product
- Hand-craft your product
Pick the option that gives you the most valuable insights, but make sure it doesn't cost you too much time or money! Once you have your prototype you can use it to conduct more detailed customer interviews — find out what they like about your product and what could be improved. If your customers really like your product, you may even manage to take a few orders; very strong evidence that you have a desirable and viable product.
What you should learn
Desirability: Do your customers like your prototype?
Feasibility: Building a prototype should give you a good indication of whether you can actually create your product
Viability: This should give you a better idea of the costs involved and what people might be willing to pay
4. Landing page
A simple webpage can clearly illustrate your value proposition. This can be an important component of many experiments since this is where people are likely to go to find out more about your product.
In addition to describing your value proposition, your landing page also needs to include a clear call to action, for example:
- An email newsletter signup to keep updated on the product
- An option to join the waiting list to be first in line when your product is released
- A button to buy your product - if you are not ready to sell yet this could lead to a Mock Sale or a Pre Sale
- A link to your crowdfunding campaign
Whichever option you choose you will need to back it up in the appropriate way, so if you plan on having an email signup, make sure that you have time to send out a regular newsletter.
Make sure that your call-to-action is visible as soon as you open the page (above-the-fold) and also explain your value proposition in terms of:
- The customer pains it is relieving
- The jobs it will do for your customers
- The unexpected gains it can provide
When combined with analytics services (like Google Analytics), you can see how many people are visiting your site and how many of them engage with your call to action.
What you should learn
Desirability: are you attracting a lot of customers to the page? What percentage of visitors are engaging with your call to action?
Viability: The number of visitors and your engagement rate should give you an idea of how many people might buy your product
5. Explainer video
A short video that explains your business idea in a simple, engaging way is a really good way to validate your idea.
Adding video to your landing page lets potential customers understand your product before going on to make a purchase, but there are also many other channels you can use to learn about what your customers want. A few possibilities include:
- Social media
- Video platforms like YouTube or Vimeo
- Emails
- As part of your customer interviews
- On crowdfunding platforms
Interactions with your video, specifically the number of views, shares, likes and comments will all provide important feedback on your product, particularly when they are followed up with a purchase.
What you should learn
Desirability: are people reacting positively to your value proposition? What proportion of viewers are converting into paying customers?
6. Social Media Ad Campaigns
Social media ad campaigns are a great way to reach your target audience. Social media ads use a push-based approach to let potential customers know about your product.
One of the biggest benefits of social media ads is how specific you can be with your targeting — to keep your spend low, you can pick a very specific niche based on very specific traits.
You can set up your ad-campaign to achieve one of several objectives, for example, you may want to direct people to your website, or perhaps you would like to get more likes on your Facebook page. Whichever option you choose, you should monitor the amount you spend compared to the number of likes and views you get. If you get a lot of engagement for not much money, that is pretty good evidence that your idea could work.
What you should learn
Desirability: whether social media users are interested in your idea and which customer segments are most likely to buy
Viability: you should get a good idea for how much you will have to pay to market your product
7. Not-ready-yet Sales
Mock Sale
To test that people will actually pay before you've finished developing the product you can conduct a mock sale. Whether you make mock sales online or offline, it is important to consider trust with your customer — if you implement your mock sale poorly, or if you cannot provide the customer with a workable product in a reasonable timeframe they may feel negatively about your brand.
Online
With an online mock-sale, you can present your price options on your landing page — if your customers click through you can show them a "sorry, we're not ready yet" message with an option to sign up to your newsletter or put themselves on the waiting list. You will need to make sure that you have analytics set up to monitor the behaviour of your website visitors and the pricing options they prefer.
To refine your pricing strategy, you could also implement "split-testing" in which website visitors are randomly directed to different versions of your page, each showing a different price point. The analytics you collect here will let you see what price point is most attractive.
Offline
With an offline mock-sale, you need to have a good quality prototype and a physical location to sell it. The easiest option may be a market stall of some kind, but if you're lucky you may be able to place it in another shop and observe which customers attempt to buy it.
When someone does try to buy your product, you should ask that customer for feedback and see if they would like to be informed when you have developed a saleable version. You should also make sure to keep these potential customers happy and compensate them with a gift card for the inconvenience.
Pre Sale
A pre-sale is very similar to a mock sale, but this time you actually take payment information (although you will only charge on delivery). In this case it is even more important that you know that you can ship the product in a reasonable timeframe.
For an online store, you may wish to utilise Stripe, which includes a "Payment Intents" feature for payments that should be taken at some point in the future.
What you should learn
Desirability: If people actually try to buy your product, that is very strong evidence that your product is desirable
Viability: Split-testing price points and monitoring the number of mock sales will inform your pricing strategy and determine whether you have a viable business
8. Crowdfunding
Crowdfunding not only helps you fund your business venture, but it can also be a good gauge on how desirable your product is.
Your crowdfunding page should include your explainer video along with a further explanation of the Value Proposition in terms of the pains it solves, the job it does and the gains it creates.
Views, comments and shares all give good evidence on the desirability of your product, whilst the money pledged to your project generates very strong evidence that you have a product that people are willing to pay for.
What you should learn
Desirability: Are people willing to invest in your product?
Viability: How much will people pay for your product?
9. Pop-up shop
A pop up store is ideal for testing face-to-face interactions with customers to see if they'll really make a purchase. You can use your pop-up store to make either mock-sales or pre-sales.
Use the evidence you have built up in previous experiments to decide on a location where your potential customers might be going.
You can run your pop up store for anything from a few hours to a few days — this is a great opportunity to learn more about your customers.
The feedback you receive should help to determine whether to distribute through a re-seller, on your website or at a physical store. If you get a few presales, mock sales or even real sales, you have really strong evidence that you have a desirable product with a realistic price point.
What you should learn
Desirability: Customer visits, feedback, email signups and actual sales (real or otherwise) all give evidence that you have a strong product
Feasibility: Whether you can hire space in the right location
Viability: How much are people going to pay, and how much does it cost to hire space?
Moving from Experiment to MVP
Once you have validated that your idea could work, you may well want to an e-commerce website as your MVP (Minimum Viable Product), or even your MLP (Minimum Lovable Product).
There are a variety of platforms available for this including:
Of these, I would strongly recommend Shopify, BigCommerce or SnipCart. As platforms designed specifically for e-commerce they have extensive feature sets. Most importantly, they provide headless-commerce APIs — this means that you can have a developer build you a fully-custom shop front whilst still benefiting from their management dashboards and support.
If you would like any help building your MVP e-commerce website, please contact us or leave a comment below. We can develop a cutting-edge scalable online shop allowing you to easily take payments and manage your orders.