You have a brilliant idea for a social or environmental venture, but how do you know if it will work in the real world? Testing your ideas in the market is a crucial step to validate your assumptions, learn from your customers, and improve your product or service. In this article, you will learn some practical methods to test your ideas in the market without wasting time or money.
The first thing you need to do is to clearly define the problem you are trying to solve and the solution you are offering. What is the pain point or need of your target customer? How does your idea address it? What are the benefits and features of your solution? How is it different from existing alternatives? You can use tools like the problem-solution fit canvas or the lean canvas to help you articulate your value proposition and business model.
Everyone has bright ideas, but will they work in the big world? We must check first. How? By testing it in the market. This means showing it to real people, people who might use or buy it. First, we must know what we think, these are called assumptions. Then, we ask our customers: Do they like it? Do they need it? Their answers are important. It tells us if we're on the right path. If things aren't perfect, that's okay. We learn and make changes. Step by step, our idea gets stronger. And that's how we find success.
From my mentoring experience, the Lean Canvas tool often proved really helpful. I recall one entrepreneur with a promising idea for a financial management app. While the concept was sound, the direction lacked focus. Introducing them to the Lean Canvas, we broke down their idea section by section. By the time we filled out "Problem" and "Solution", it became evident that their initial customer segment was too broad. By focusing on "Unique Value Proposition" and "Customer Segments", we tailored the audience more and more. This streamlined vision ultimately led to a more successful product launch. The Lean Canvas, in its simplicity, made a big difference.
The project was for a well established construction company to develop their Portable Building Division in Riyadh, KSA. They had been established in Dammam for 15 years. They had been unsuccessful in their efforts so they approached me. My approach was to visit the top contractors in Riyadh and do one to one interviews. The findings were that the product being sold in Dammam was too high in quality. The companies that were buying the product in Dammam were international companies which were used to a higher quality of building which was used around the world. This standard of building was not required in Riyadh. We introduced a new, lower range specification product in Riyadh and it worked. The market loved it! Sales went through the roof.
The next step is to identify the assumptions and risks that underlie your idea. What are the things that you believe to be true but have not verified yet? What are the potential pitfalls or challenges that could derail your idea? You can use tools like the assumption mapping or the riskiest assumption test to prioritize the most critical and uncertain assumptions and risks that you need to test.
Once you have identified your assumptions and risks, you need to design experiments to test them. Experiments are ways to gather evidence and feedback from your customers or stakeholders to validate or invalidate your assumptions and risks. You can use tools like the experiment canvas or the validation board to plan your experiments and define your hypotheses, metrics, and criteria.
The next step is to run your experiments and collect data and feedback. Depending on your idea and your assumptions and risks, you can use different types of experiments, such as interviews, surveys, landing pages, prototypes, MVPs, or pilots. The key is to run your experiments as quickly and cheaply as possible, while ensuring that they are reliable and relevant. You can use tools like the lean startup cycle or the build-measure-learn loop to iterate and learn from your experiments.
There are a number of mechanisms, ranging on scales from quantitative to qualitative, costly to free, and production intensive to barebones. What’s right for you depends on a number of factors, including budgets and resources, existing validation of your assumptions, tangible commercial demand, and more. The most valid results usually come from blending a number of methods together, as some will likely be skewed. If you are running PPC ads to a landing page, try having multiple variations to see which does best. Show the landing page to advisors, clients, and friends and get their perspective. And most importantly, refine your tests once you have generated clear enough results to produce a usable insight.
Here's a not-so-secret secret to finding entrepreneurial success. Run experiments, collect data, implement data, repeat. The faster and more cost-efficient, the better. Tools like the lean startup cycle or the build-measure-learn loop can help streamline this process. The key is to iterate as quickly as possible based on the feedback and data you collect. The first round of testing might yield only some of the answers, but it will help you refine your concept quickly.
Quick Dive into Low-Fidelity Prototypes ??? - Swift Ideation: Quick, simple prototypes for visualizing ideas??. -Cost-Efficiency: Minimal resources for early-stage testing??. -Immediate Feedback: Gather initial reactions from target audience???. -Identify Assumptions: Pinpoint risks needing further exploration??. - Build-Measure-Learn Loop: Iterate rapidly with data-driven insights??. -Scaling Up: Progress to higher-fidelity prototypes as validation grows??. Low-Fidelity Prototypes are your springboard into a cycle of swift, insightful, and cost-effective experimentation, steering your venture towards validated learning and market readiness??.
The final step is to analyze your results and draw conclusions from your experiments. What did you learn from your data and feedback? Did you validate or invalidate your assumptions and risks? How does this affect your idea and your next steps? You can use tools like the pivot or persevere or the learning card to document your learnings and decide whether to pivot, persevere, or stop your idea.
Testing your ideas in the market is not a one-time event, but a continuous process of learning and adapting. By following these steps, you can increase your chances of creating a viable and impactful social or environmental venture.
Post checking for gaps (competitor's, why do it etc.) in the market, the USP of the ideas, experimenting with it & gathering execution metrics & disseminating such market data, it's critical to check for the sustainability of the idea. The market is agile, always open to change. Ideas must be able to withstand such change which will make it sustainable over time. Using technology appropriately will only add to the market success of ideas that can be envisioned across just not three but four dimensions of length, width, depth but time too! It must be good enough to go long, must have depth, substance and be able to last over time by having the ability to constantly improve the bottom line!!
There are a TON of books on this very subject. External validation is very much the foundation for lean startup methodology. If you're asking the question, then it's reasonable to believe you may not have read some go-to's like The Lean Startup, The $100 Startup, The Startup Owners Manual, etc. Tim Ferris gives a pretty good breakdown of how he validated the name for "The Four Hour Work Week" in the book.
Preparing to test your ideas in the market? There's great value in making a waitlist available to your audience. In doing so, you'll be able to determine the level of interest, before investing time, financial, and people resources in product or service development. As you're creating your waitlist, be sure to collect contact information and acquire consent to send updates. Go the extra mile and involve your waitlist members in providing feedback to refine your idea, and a more successful launch may be yours!
When you test directly with customers, without a real transaction with a real product, the result is usually biased. Only when someone presses a pay button you get the confirmation that there is a real demand. But you may not need to test everything yourself. Look for similar companies and see if they have already proven some of your market assumptions. Check if they have already had to prove their successes to investors --> check if there have been any recent funding rounds. Check how they are doing in terms of web traffic. If they are able to generate more and more website visits/ downloads, their product offering has some traction. Use their experience to validate your assumptions.