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Let's say you have an idea for a new business. We went to the market, looked around and see: no one sells anything similar! Perhaps such a product has long been in demand abroad, but has not yet reached your country or city. Perhaps you really came up with something fundamentally new. But the fact is: it is not known whether there will be buyers for you.
How to test the viability of a business idea? Together with marketer Maria Kuzmicheva, we remembered several ways.
Turn on the Internet and common sense
Substitutes
For example, you invented toothpaste. It is important to understand whether people need it. Is there a need that she can satisfy? To do this, you need to find all the substitutes on the market. If people need to brush their teeth, surely there is already some remedy for this. We are looking for substitutes, we find tooth powder, which is actively sold. So, there is a need and every chance to sell a new product.
Commercial or other benefit
If your product provides some unambiguous benefit in the presence of substitutes, most likely it is doomed to success. An example of such a product is cold tire retreading. The cost of the service is no more than 50% of the cost of new tires, one tire can be retreaded several times, that is, the benefit for the car owner is obvious.
What are people looking for?
Take advantage of search engines. Go to wordstat.yandex.ru and type in your request. If the business idea has already taken root in other cities, evaluate the requests in your area. People may know about the “subject”, look for it, or the solution to their problem, which your product provides. So you make sure that in your region there is interest in a similar product.
If you just came up with a new product at all, look for related requests (substitutes or needs). For example, they invented an anti-mosquito incandescent lamp - look for "how to get rid of mosquitoes at home" or "safe mosquito repellent".
If there are relevant requests, and there are many of them, most likely, your idea will take root.
Interests
If you can easily articulate an interest related to your service or product, look at the activity around that interest. Monitor forums and social networks. If possible, track offline traffic. For example, they came up with a completely new type of healthy food, look for interests related to health, sports, ecology, and so on. If large and active communities are formed based on interest, these will most likely be your first buyers. A good example of nicheing around interests is the Pardes kosher grocery store in Moscow.
What about talking?
What will customers say?
Naturally, you can not only guess, but also interview potential customers. Depending on the scope of the project and budget, these may be in-depth interviews, surveys, or focus groups. This is a fairly affordable method, but people themselves do not always know what they want. They may say that they would love to buy your new memory training, but in fact they would rather save. So do not use polls as the only criterion for selection.
Help from experts
Those who have been on the market for a long time and have been actively working can help evaluate the idea. Friends can be experts successful entrepreneurs, top managers, marketers. As a rule, experts can give a comprehensive assessment of an idea, see its advantages and disadvantages, plus experience and business sense. True, we recommend that you contact only those experts whom you trust. Otherwise, a good business idea can be “taken away”.
Testing
Giving a product a try to potential customers is a more reliable way to evaluate an idea. There is a very telling example: a manufacturer has released a new type of pet food. He tested the packaging, he liked it. He advertised, it worked. People bought food. But the dogs and cats didn't like it. The idea failed because he forgot to test the most important thing - the product on consumers. The disadvantage of testing is that you have to spend money and / or time to produce a product or provide a service.
Now let's try to sell...
Selling "on your own"
If there are potential customers among your acquaintances, then you can not “go out” yet. If you come up with a new collection of handmade jewelry, try to sell through acquaintances and see if there will be purchases, positive feedback and repeat orders in the future. Please note: friends may be afraid of upsetting you by refusing to buy.
Test sale
Depending on where your product is sold or bought, you can place ads, put up flyers, and drive traffic to it. And this will be the most reliable indicator of demand. It may happen that no one buys anything. This is frustrating, but saves you from serious expenses. But be prepared for the fact that there will be a lot of orders, and you will have to urgently bring or make a new batch before competitors seize the initiative. And remember that the sale of the first batch does not 100% guarantee the sale of the next. Track feedback to be sure that the product is liked and useful.
I think that we have not remembered all the ways. But they, especially in combination with each other, will make it possible to evaluate the success or failure of an idea in the market with a high degree of probability.
Important! Before you start thinking and testing, be sure to thoroughly research your product, competitors, and target audience. No new product is introduced to the market without . If you don't know how to explore - come, we will teach :)
By the way, in the comments you can add what we forgot.
Maria Kuzmicheva, independent marketing analyst, marketing research specialist
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There are several ways to start your own business: come up with a business idea yourself, join another business or use someone else's idea, or buy a ready-made business. In all of these cases, before you start investing, it will be useful to conduct a “crash test” - checking a business idea for vulnerability. How to do it?
Draw up the most rough business plan
- Write a plan for implementing the idea: what are you selling, to whom are you selling, where are you selling, how are you selling - all the points that describe the development of the business.
- Make calculations: indicate the availability and amount of start-up capital and how much you are willing to spend on promotion - in general, all costs should be foreseen as much as possible.
- Calculate the cost at which you will sell your product or service. This is important for understanding whether you will enter the market with your offer or not.
Conduct a competitive analysis
The less money you have at the start with high competition, the less likely you are to launch a successful business. The most common reason for failure is that the costs significantly overlap the first income, and it is not possible to reach the profit. So let's start with simple steps:
- We analyze the number of requests for your product or service in Yandex.
- We look at the search results for a similar query - this is enough for a rough estimate of the ratio of demand to supply.
- We study the prices of a competitor - do they correspond to the prices from your business plan. If the price offer of key competitors is difficult to beat, and the product is not unique in any way, it is better not to get involved.
Find your niche
This means taking a small share of the market. In order to be in your niche #1, most often you need to succeed in selling a unique product or service. When looking for a niche, it is important to identify demand. Let's say you decide to sell raccoon toothbrushes, but will someone be looking for your product? But the opposite also happens. Nobody knew anything about the new product, but it is so attractive that the rumor about it starts to help sell it without much advertising.
Study the market and consumer
The most successful are those business ideas that a person undertakes to implement, a dog, as they say, who has eaten in some given specialization. An experienced pastry chef who decides to open his own bakery, for example, already has the knowledge of where to buy raw materials, what equipment is best and what kind of cakes visitors prefer. If you are a recognized specialist in your field, then it will be easier for you to promote it - for sure, some of your customers will come to you, trusting directly your professionalism. But be prepared for intense competition with your former employer.
If your business idea needs to be realized in a market unknown to you, study it thoroughly, take a partner with a proven successful experience from this particular market.
Test Hypotheses Through Internet Marketing
A very popular method for testing startups. But it will require a certain budget. The method is to create
A page on the Internet that provides detailed information about a particular product or service in order to persuade users to buy ">landing pages
When there is an idea for a business, it is better to probe the market right away than to hesitate and postpone. Otherwise, you can burn out or competitors will be more decisive. In this article, we will tell you how to test a niche and check the idea for performance.
Why Conduct Niche Testing
Niche testing helps you understand if a business has a chance. Internet entrepreneurs have great advantages compared to offline ones: they do not need to invest in renting premises and purchasing goods. You can check the demand in social networks, on free classifieds sites, as well as with the help of landing and contextual advertising with a small budget.
The trial run will show whether buyers behave as we expected; what is the demand for the product and what is really important to customers.
Another advantage of testing is that you learn the basics of business on the Internet step by step: come up with a product description, create a website or landing page, profiles in social networks and on bulletin boards. This means that you acquire useful skills and knowledge that will be useful in the future.
How to test a niche for a business
Testing a niche on the go will not work. It is necessary to prepare, prescribe an action plan and strategy as if you were already really starting a business. This will show the true numbers. So you will have no doubt that it was only a “draft” version, and when you really start a business, everything will be different.
Niche testing takes place in six stages.
Stage number 1. Niche selection
If you have an idea for a business, you can immediately proceed to market analysis. If you don't know where to start - then look at what is already in demand. Perhaps among these areas there is something that is close to you:
- Services. This includes learning languages, maintaining Instagram profiles, copywriting, custom cakes - choose what you can do best.
- Training courses. Teach yourself - teach others.
- Handmade. For example, knitted items, toys, decoupage, jewelry, business boards.
- Selling goods from China. These can be video recorders, cases for phones and tablets, clothes, toys, inexpensive electronic devices.
Search the Internet for research on what products are most often bought. For example, Ain.ua magazine published the results of the survey “What products Ukrainians searched for in 2018: top 10 requests for OLX from Android and iOS” .
Think about what you can do best and what your soul lies in. In parallel, study the practical side of the matter:
- make a list of suppliers;
- find out how suppliers organize their work: minimum order quantity, terms of payment, return of goods, possible discounts.
It is best to write yourself a basic business plan. Even if you are not going to look for an investor, a business plan will help you put things in order in your head and not miss out on important things. Let it be 1-2 pages of text to begin with, then you can add details to it.
What to write in a business plan
- Problem What problem does your product or service solve for a potential customer?
- Product (solution)- a brief description of the product, how it solves the problem of the buyer. We formulate USP - a unique selling proposition.
- The target audience- who will buy your product, such as students, families with children, entrepreneurs or all together. for each segment. For example, families from a certain area with an income of $800 per month. Try to estimate the size of the market - how many potential buyers are in your segment.
- Competitors- Who else sells the same products. How can a customer solve their problem without your product.
- Your team- you will work on your own or you will need assistants, for example, to send goods by mail or receive incoming calls.
- The main stages of starting a business- what has already been done: there are suppliers or a website. Write down what needs to be done in the future: arrange delivery, find an assistant.
- Finance- how you will make a profit, sources of expenses and income.
Stage number 2. Market analysis
When you have a basic idea of the future business, it's time to test your niche. Several methods will help with this.
Find out the number of queries in search engines
If the product is not unique, there is already a demand for it. Special services help to check the demand on the Internet. One of them - .
Register with the service and enter a list of queries that can search for your product. Put yourself in the place of the buyer - what requests would you write yourself.
Check for queries that indicate a willingness to buy. They are called transactional.
Transactional requests indicate that the user is ready to take an action. They contain the words "buy", "wholesale", "order", "download" and others.
Avoid general queries, such as "evening dress" - it is difficult to understand intentions from them. Perhaps they do not want to buy a dress, but to find a pattern or look at the style.
Study competitor websites and ads
Make a list of competitors, write down their offers and think about how to formulate your offer better, what additional benefits to offer. Do not be too lazy to make a test order or call - it happens that the site is beautiful, but the support service does not answer calls. In the future, excellent service can become your competitive advantage.
When you have studied the demand and competitors, go back to the business plan and supplement the relevant items with new information.
Stage number 3. We create an offer
You already have a product, its description and competitive advantages. Time to introduce yourself to the Internet audience, assess the demand and reaction.
Groups in social networks
Goods and services are sold on Instagram, Facebook, Vkontakte, Telegram. See where there are more of your competitors and what is the activity of subscribers in each of the networks.
pros
- Large audience coverage.
- Direct communication with clients.
- Promotion features - user ratings, menu (for restaurants), call to action button, events and so on.
- Viral effect - by creating contests, drawings, you get reposts, likes and new subscribers without big investments.
Minuses
- A lot of time to create content - photos, text, videos.
How to create a business profile
Social networks themselves help users introduce themselves by offering step-by-step guides. By following the prompts, you can easily create an Instagram business profile. Facebook business page or business profile on Vkontakte.
What content to use
The interest of subscribers is supported with the help of text posts, photos, videos, infographics. Each social network has its own characteristics.
For example, both text and visual content work on Facebook and Vkontakte.
On Instagram, the basis of content is photos. It will be necessary to prepare high-quality product photos, organize photography so that there is a stock of photos for future posts.
The basis of promotion in Telegram is text notes. Here you need an interesting publication plan and the ability to write engaging content.
What to include in your profile
Design your business page in such a way that it "catches" - this is a showcase of your business for social media users. Fill in all the proposed fields using information about the benefits of the product. Please provide valid contacts. Make sure that letters reach the mail, and you can get through on the phone.
What to post
- Announce new items.
- Show examples of using the product.
- Customer reviews.
- Product reviews.
- Collections of articles.
- Humor - anecdotes, jokes; beat the latest news on the internet.
- The inner kitchen of business - how they wrapped gifts for the New Year, how they tested an armchair or a telephone.
- Ask for advice.
- Give free advice.
Ad on free sites - bulletin boards
Bulletin boards are probably the easiest and least expensive way to test a niche. There is no need to prepare a lot of content and deal with the settings. Just register a profile and advertise.
There are more than 40 bulletin boards in Ukraine and Russia. The most popular Ukrainian sites:
- Olx, Ria (general);
- Klubok, Kloomba (clothes);
- Shafa (brand clothing);
- Kidstaff (children's goods).
Popular bulletin boards in Russia:
- Avito, Yula, FarPost, Hand to Hand, Flagma, Buy and Sell (general topics);
- "Masters Fair", LoveMade, Spinbo (handmade);
- Littleone, Kidtobaby, ForLovedKids (children's products).
pros
- They come here to buy.
- For buyers there are filters, search, reviews.
- You don't need to create a lot of new content compared to social media.
- Ads are indexed by search engines. This means that even those users who simply search in Google or Yandex will find a product or service.
Minuses
- Ads are moderated. It may be long. Plus, the ad can be rejected.
- There are limits on free ads. For example, OLX has limits for each product category.
- There are many scammers who disguise themselves as buyers and deceive.
How to advertise a product or service
You need to register a profile by entering an email, phone number, name or login. Then confirm the registration in the mail and fill out your profile.
How to write good ad copy
- Fill in all the filter fields - this way there are more chances that the ad will be shown to the user.
- Take a good photo of the item. There are recommendations on sites, for example, on OLX, photo requirements are described.
- Write about some detail or feature of the product that will make the ad more personal.
- Change the ad text periodically to make it look new.
Advice: Write the announcement in a file so that it can be easily copied to other bulletin boards.
What content to use
The main content, other than ads, on free sites is customer testimonials. Therefore, you need to ask for feedback after each closed transaction.
Landing
It is needed to test a niche using contextual advertising. This is a product or service description page with one specific call to action. If you have several calls to action, such as “buy” and “download presentation”, this is no longer a landing page, but a one-page site. It will be difficult to test the effectiveness of ads on a one-page site, as the actions of visitors will be blurred.
Today, there are many designers that allow you to create a landing page without programming skills and immediately publish it on the Internet.
Free websites will be created on third level domains. That is, the address is long and contains the name of the platform. This is enough to test a niche, in the future you can buy a domain for yourself and indicate the name of the site in it. You can buy a domain from the same service that made the landing page. For example, on the borstch.com website, a domain is given free of charge when purchasing a paid plan.
pros
- Just create a website without programming skills.
- There is documentation, tips, videos. For example, Tilda's website has a free course on how to create an effective landing page.
Minuses
- Although the landing page is assembled according to the constructor principle, you still have to study the documentation and video. And also delve into the settings and understand the interface.
- Free landing pages are hosted on third-level domains.
How to choose landing page content
Earlier in the business plan, we formulated the product description, benefits, and unique selling proposition. This information will form the basis of the content for the landing page.
A selling landing page includes a set of standard blocks and elements:
Stage number 4. We launch paid advertising
For paid advertising, special services are used - Yandex Direct, Google Adwords, and social networks - Facebook, Instagram, Vkontakte.
How to test a business niche in social networks
- Slack
- Trello
If you have a brilliant business idea and are ready to immediately launch a startup, slow down and analyze whether all the nuances have been taken into account and whether all the shortcomings have been corrected. It’s not enough just to come up with an idea, find start-up capital and recruit a team. Every new business needs a step-by-step "strength test". Dmitry Voloshin, CTO of Preply, spoke about how to test a business idea in order to avoid failure in his column.
Entrepreneur from Kyiv, co-founder and service station of an international marketplace for finding tutors preply.com. Education: Kyiv National University. Taras Shevchenko. Preply has three co-owners: Dmitry Voloshin, Kirill Bigay and Sergey Lukyanov; the project was launched in 2012. At the moment, over 25,000 tutors and about 80,000 students around the world are registered on the service.
"Mom-test": checking by relatives and friends
Starting a new business from scratch, every entrepreneur wants to succeed. However, without careful preparation, a successful result cannot be obtained. To remove at least some of the risks, do not be lazy and test your idea - from the concept and initial resources, and ending with the implementation and all sorts of details. There are many ways to test the creativity, novelty, uniqueness, and potential of your project.
You can start with a simple survey of relatives, friends and acquaintances. The so-called “mom test”, despite the fact that it is rarely 100% true (after all, people we know will deliberately and unconsciously try to “embellish” your project), it can still give food for thought and point out weaknesses.
When conducting such interviews, it is important to remember that in order to get the most truthful answers, you need to formulate and ask simple and understandable questions. Focus on the shortcomings and problem areas of the business idea, while specifying what solution to these nuances your environment sees. By carefully analyzing the results and choosing all the most important for your project, you will rise one step higher in understanding the project's prospects.
Client testing
When launching a new product, one should not forget about the target audience, its needs and requirements. To check whether people are really ready to buy a product or service, you can use the Lean Startup methodology (aka Lean Startup), developed by American entrepreneur and business theorist Eric Rice.
Lean startup is a concept of "lean" launch and development of companies, which is based on the most careful use of company resources. To do this, a scientific approach to the introduction of any new product, service or idea is used: a hypothesis is formulated, it is tested locally on a small audience or a small market, and then feedback is processed and the results are evaluated. And only in case of success the idea is scaled.
Using this approach, companies can design products and services that meet customer expectations and needs without the need for large initial funding or costly product launches.
In the conditions of modern telecommunication technologies, you no longer have to go from house to house to achieve significant results. It is enough to create a landing web page (landing page) and take advantage of the opportunities of social networks, online communities, message boards or marketplaces with your target audience.
Oxygen, aspirin or jewel
Another method for testing the viability of your business idea can be an express test, which was invented by a successful entrepreneur and Harvard Business School lecturer Janet Kraus. To do this, it is enough to answer the main question about your project - how indispensable it is, whether it is a product or service for the target audience, without which it is impossible or difficult to live.
Conventionally, this method can be called "oxygen, aspirin or jewelry." Here you must clearly realize the importance of your future product. If it is irreplaceable, it is oxygen; if it makes life easier or helps to solve any problems, it is aspirin; if it is more a matter of prestige or pleasure, it is a treasure.
According to Kraus, ideally, a successful business idea requires all three components, since these three aspects will provide your startup with progressive development, market stability and growing profits.
The Disney Method
To take a close look at your business idea from all sides, it will not be superfluous to use the so-called "Disney method". It is based on considering his idea from three different positions - a dreamer, a realist and a skeptic.
Disney teams, developing new projects, gradually moved from room to room, each of which had its own functions. In the first it was possible to fantasize in the most insane way, in the second - to create detailed sketches of the implementation of these fantasies, and in the third - to subject everything to harsh and merciless criticism. To finalize the project, the teams could return to the previous rooms, since the project was considered finally successful only when there were no complaints against it in the “critics room”.
In the conditions of the modern market, to implement such a method, you can simply abstract away and use a sheet of paper, a text editor and, of course, all the power of your intellect instead of rooms.
Edison Method
Having tried all the methods described above and having all the pros and cons of your business idea in your hands, try to finalize the project, change the idea so that there are simply no cons left.
This is where the Edison method comes into play. Since each failed test provides valuable information for reflection, your main task at the final stage of testing a business idea is to refine and strengthen it until it is 100% satisfying.
When Edison was once asked what his secret was, he replied that he did not stop working on a product until it "worked on its own." This is the essence of the method.
P.
S.
Summing up: when working on a startup, it is important to remember that any business idea is a “green” product that “ripens” only under the condition of a correct, logical, carefully thought out and executed testing and verification plan.
Water does not flow under a lying stone, which means that for the successful implementation of any modern startup, the stone must be removed and the flow directed in the direction that will lead you to the best result.
There are many ways to come up with a good idea for a future business. If you are still at the initial stage of inventing, we advise you to familiarize yourself with our publications, where we talked, and also -. After studying these materials, we are sure that you will have much fewer questions, and the right thoughts will come into your head.
Let's say that you have in mind some great, as you think, ideas for a real business. You may even have already settled on one idea. Moreover, you are ready to start your own business. But, like any other aspiring entrepreneur, you have some doubts. You are wondering if the idea will work, how effective it will be, how it will be perceived by the target audience, and how long you will pay back all investments.
Some in such a situation, like Richard Branson, would say, “To hell with everything! Take it and do it! And perhaps they would be right. You can't slow down in business. Otherwise, competitors will quickly get ahead of you and kick you out of the market. But taking too abrupt and rash steps is also not the best solution. It is much better to first test the idea for effectiveness, and only then climb into the very heat of the business.
Today we will talk about five effective techniques. All of them are developed by well-known people and tested on hundreds of companies. Therefore, it is likely that these methods will also be useful for testing your own business ideas. Let's start.
Thomas Edison Method
The famous inventor Thomas Edison had several methods for working with ideas.
First, he always took quantity. He knew that the more he created different variations of the same invention, the faster he would get the desired result. Moreover, he drove himself and his subordinates into rigid limits. It was necessary, for example, to invent one small device at least once every ten days. Or one big invention every six months. Such rigid limits forced the brain to generate ideas with a vengeance. And as a result, in a short time Edison could create several good inventions.
Secondly, he constantly experimented with his developments. Many of you know that it took Edison over 9,000 tests to create the final light bulb. But few people know that to create a battery, he conducted more than 50,000 experiments.
Thirdly, he never rested on his laurels. Constantly refined and changed existing inventions. This is about the same as if modern manufacturers are constantly striving to improve the quality of their products, and each new batch of goods is better than the previous one.
Walt Disney Testing
Walt Disney called his method of testing ideas a non-existent word - Imagineering. The name appeared as a combination of two words - imagination (imagination) and engineering (development). This method has been used to transform even the wildest fantasies that are inherent in any creative person into something real and understandable to everyone.
The Imagineering method was based on three different tests that any idea was subjected to. It was considered from three different positions. From the position of a dreamer, a realist and a critic. The dreamer comes up with (generates) a lot of ideas. The realist considers them from the position of an ordinary, logical and practical person. Well, the critic discovers and describes all the shortcomings of this or that idea.
At the Disney studio, this method was successfully applied in practice. The teams worked on each project in stages. Each stage took place in a separate room. In the first room they gave free rein to fantasies. Here future projects were born. In the second room, real sketches of the future project were created. In the third, the project was criticized. If the project was criticized, it was returned to the first or second room for revision. And so on until the project did not receive a single comment in the “critical” room. Then he went into production.
Eric Rice's Lean Method
Eric Rice describes a Lean method for testing ideas for viability in his book The Lean Startup. The main idea of the method is that the product should be more than just interesting to your customers. They must be willing to buy it with their own money.
The essence of the technique is as follows. Before launching a product into production, you need to create a small landing page on the web. Something similar to modern Landing Page. On the page, you need to place a photo of the product, a short description and a "Buy" button connected to the statistics.
Eric Rice calls his method very simply - "First ask - then do."
I must say, this simple and accessible to everyone method is able to give a complete picture of what is happening. You will know exactly how many percent of visitors are real buyers. So, you will be able to accurately assess the prospects of the entire business.
Way to Test Scott Anthony's Ideas
Scott Anthony in his work The First Mile talks about his own method of testing ideas. It divides the entire testing process into several successive stages.
The first stage is an analysis of competitors, their experience, the success of companies, etc.
The second stage is thought experiments. Here the work consists in questions and answers to them. For example - "How will our product affect the global community?". Or - "What will we do if the resource producer raises the price of raw materials?". And so on, in the same vein. Such questions and answers will immediately weed out some of the too risky and unpromising ideas.
The third stage is financial questions and answers. Here it is worth analyzing the size of the audience, its solvency, possible ways to reduce costs and increase prices, the payback period of the project, and much more.
The fourth stage is calls. Sometimes one call to the right person is enough to understand once and for all that there is nothing to do in this business. Or, on the contrary, that you need to act as quickly as possible.
Janet Kraus 10 Second Test
Harvard Business School professor Janet Kraus offers another method for testing ideas. She calls it the "10-Second Test". And it consists in asking yourself one single question - "Is your idea Oxygen, Aspirin or Jewel for future buyers?"
Oxygen is those products without which people or companies cannot physically exist.
Aspirin is something you can theoretically exist without, but it will cause a certain degree of discomfort and risks.
Jewel - products that evoke positive emotions, give pleasure and satisfaction.
For your idea to be 100% viable, you need to strive for your product or service to belong to all the dream categories at once. And most importantly, when answering a question, be honest with yourself.
