Launching a new product or starting a business is going to present you with enough obstacles and challenges to make your head spin. That’s just the way it is, no matter how prepared or experienced you already may be.
That said, one of the major risks you can take off the table before you even start is making sure there is a market for what you are going to be offering in the first place. No market, no business, no matter how much else you get right.
This seems obvious and like common sense but small and large businesses alike make this mistake all the time. One of the classic examples is New Coke. Maybe you’ve never heard of it? There’s a reason- it completely bombed because despite lots of effort and millions in marketing it turns out no one wanted a new Coke formula.
There are literally thousands of other startups you’ve never heard of because they never got off the ground for the same reason.
Want to see some live action examples right now? Tune in to the popular show Shark Tank and see how often the professional investors there shy away from getting involved in the presenters’ businesses because there is not enough demand for what they are trying to sell.
The good news is that there are lots of simple and quick ways to figure out ahead of time how much interest the market may have in what you are planning to sell. Even better, you can figure this out before you make any big investments or irreversible decisions and use this data to either tweak your offer or move on altogether with very little lost time or money.
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Here’s How to Determine Market Demand:
There are forums and online groups for almost every kind of interest group and demographic out there from wide ranging topics like health and fitness to very narrow groups like Dentists in Buffalo, New York or Orchid growers in northern Peru (really!). Find out who is out there talking about the topic you fit into and start engaging them in conversation.
You don’t have to give away your exact secret sauce but you do want to understand who has the problem you are hoping to solve, how big of a problem it is and what kind of solution is going to appeal the most. If you find a good fit and enough similar complaints you are on track. If no one seems to want what you were planning to offer, time to rethink your idea.
Figure out what kinds of keywords and phrases people who would be interested in your type of product or service would be searching for and see what kind of results you get. Then take it a step further and use Google’s keyword planner to find out exactly how many searches are being done for these phrases and words. You can narrow it down by geography as well.
The more searches there are for the exact problem you are solving the better off you are going to be. To further bolster your research, you can check social searches on the issue at sites like Buzz Sumo and see if people are sharing their troubles on social media. The more, and the more exact, the better for your chances of success.
Polls and Surveys
Thanks to technology and companies such as Survey Monkey, Google Forms or Gravity Forms for WordPress it is now super simple to get free, fast feedback from surveys of strangers on the quality of your idea. The trick with doing survey and polls is to make sure you don’t simply get the results you want by wording them in a leading way. Writing them correctly is a guide in itself but you can find some good tips here.
Step one is to make sure you are surveying people who are going to be your most likely customers. Step two is to find out what problems they have and what solutions they are considering. The final goal is to see where what you want to sell might fit into that mix. If you get good results you can move forward although this technique is best used in conjunction with some of the others. After all, New Coke came about as the result of surveys of Coke drinkers who said they wanted something new!
If you are getting into an industry where you will be selling to businesses or a specialized niche group, often times the best people to speak with are the industry experts themselves. This is even truer if you don’t have any industry experience yourself. Sometimes fresh ideas from newcomers can shake up an industry, but more often there are reasons you don’t know that what you have in mind won’t work. It may have even already been tried.
Your best bet is to solicit the advice of someone who is an industry veteran and float the idea by them. They may give you six months’ worth of education in a half hour conversation and save you a ton of money as well. If your idea does sound like a good one then they can probably introduce you to your first customers. Ask them to sign an NDA if you are worried but don’t avoid expert advice in the mistaken belief your idea is too good not to steal.
This idea is so simple and so effective it’s a wonder more business’ don’t use it. All it requires is putting up a website or even just a landing page describing what you are planning to offer along with pricing info and a place to get on a waiting or notification list. Then you advertise the thing you plan to sell and see how many people are willing to go from your ad to commit to being notified when you are going live. The amount of interest and the reactions you get will tell you a lot. You can even follow up with an email to people on the waiting list to see what prompted them to buy and what might have made them decide sooner or be willing to pay more for your offer.
If you do launch now you have a ready-made customer list. If the interest doesn’t materialize, the cost of the ads and the website is chump change compared to a full on product launch that never makes a sale. The only caveat with this technique is make sure you don’t deceive people into thinking they are actually buying something when they aren’t as this can get you in trouble.
This technique is a little different than the rest because it takes more time and requires more commitment to follow through. It can work beautifully in some cases but if for some reason you end up building interest in something that you can’t really deliver or that doesn’t work as a business you can generate a lot of negative results as well. This is a good technique to try if you have already validated the idea through other testing but lack the funds to launch or if you are willing to put the time and effort into doing everything you need to bring your plan to market if the interest materializes.
The bottom line here is that validating your idea has proven market demand will remove one of the biggest challenges to being successful in business. Since it is easy and inexpensive (or even free) to do and can give you a lot of key data to refine your idea there is no reason not to do it first.
Even if you are only planning on launching a minimally viable product it is still worth testing the market before spending the time and money to launch. For more expensive startups or costly product ideas, it is absolutely essential!