How can an aspiring entrepreneur test a new business idea?
The following answers are provided by members of Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
1. Talk to Potential Customers
Most successful entrepreneurs are extremely scrappy. The less it costs to get an idea off the ground, the more likely you are to get to the next stage of the business. You can test an idea for free by simply talking to potential customers. Ask them if it’s a “true problem” and how much they would pay to solve it. As you build the product (or company), continue to lean on those folks for feedback.
2. Go Into the Field
Take that business idea and go test it where your target audience can be found. If it’s a retail customer you are looking for, go to the mall and collect feedback. If it’s a business service, go knock on doors and see if you can get a meeting with the company decision-makers. Going into the field doesn’t necessarily cost very much at all, but it does take considerable time and patience.
3. Use a Crowdfunding Platform
The easiest way to test a product’s viability is to attempt to pre-sell it via a crowdfunding platform. If people buy it, you have a proven market and a much better chance of success when coming to market.
4. Use Paid Surveys
Paid surveys are conducted by professionals and can help you draw out a ton of data about the people you want to target. You can find out how desperately they feel deprived of your planned product, what features they expect to be standard, and what they expect to pay. This is not information you want to surprise you later.
5. Send Email Newsletters
Develop an email newsletter with a small set of people in your target audience. Collect feedback from them on how they enjoy the content you’re providing and put together a survey for people who are on the list. You’ll quickly see your emails being either shared or discarded. Either way, you’ll know whether or not you have a home run idea on your hands.
6. Dollar-Test It
Go see if your target market will pay one single dollar for it. If they won’t, it’s likely not worth pursuing. If they will, then your idea is already bringing in revenue. We did this when we were testing a product for high-schoolers. We went to the mall where we explained the idea and asked if they’d pay $1 for early access. Almost no high-schooler would, so we scraped the idea.
7. Enter a Competition
There are many pitching competitions, hackathons, and business plan competitions that you can enter that allow you to present your idea, get feedback from experts in the field, and even win some funding or assistance for building out the idea. These can be found through search engines and local networking groups.
8. Start With Free Resources
Build an audience and market with free resources first. For example, the concept for Roomi was tested using Google Docs, a Tumblr page and a Twitter account. We contacted people on Twitter asking to them to list their empty spaces on our platform, entered their info into Google Docs form and published their information on a Tumblr page so that others could view and contact the listings owners.
9. Set Up a Website to Sell It
If you want to test out an idea, build a simple website about it. Optimize for SEO, and set up a place where you can capture emails of anyone who wants to be notified once it’s launch. This will show you if there’s enough interest to invest your time and money. If you want to see how much people are willing to pay for it, ask the captured email list, or A/B test prices on your website.
10. Put It on eBay
If your idea is a product, list it on eBay to see if consumers are already looking for your product and test price points. Save time, money and effort by listing on the marketplace, rather than building a webpage and then paying to drive traffic.
11. Try Google Ads
Put up a low-cost Google Ads campaign and see how many people click on them. It’s simple, cheap, and stops you from having to spend money on a website or a landing page. That’s how we chose our company name; we put up ads with “Top Choice,” “InGenius Prep” and “App Insiders” and waited for the market to decide.
12. Test Ideas With QuckMVP
QuickMVP is the easiest way to test a business idea. Too often entrepreneurs come up with a great idea but never test it well enough to ensure consumer demand. A/B testing ideas and gathering the data is the best way to quantify whether a “good idea” is a “great business.”
13. Pitch to Existing Clients
If you have a network of existing clients, pitch them the idea. We often come up with new services and offer them for free to a select group of clients. If they like the service, then we know they will sign up once we figure out pricing. They also can give honest feedback on how to make it better.
– Peter Boyd, PaperStreet Web Design
14. Leverage 3D Printers
If it’s a hardware business, leverage 3D printing technology to test your product with real users and get quick feedback.
15. Simulate Technology
We do this all the time. Whenever we’re thinking of building a new tech-based product, we never actually go ahead and build the technology first. Instead, we simulate the technology with tools available (which often means not using technology at all). Simply go talk to your end users and simulate whatever you’re thinking of building.