The need for concept testing

The past 5 years I have specialised in consumer behavior in the area of sustainable food. In that time I have spoken to many food start-ups, investors, marketers and innovation managers. And there is one thing that strikes me time and again. It’s how little they listen to their end users, the consumer.

The modus operandi in the start-up and investment world seems to be: develop a minimum viable product as quickly as possible, put it on the market, learn from what happens and iterate. There are some arguments that seem to support this way of working, like speed and collecting real in market feedback. But there are many arguments against this way of working. It’s a very risky way of working, the chances of success are low, and it often proves to be not so fast at all. You may collect feedback from users, but this comes in at a moment in time when you may not be able to act on that feedback (because your product is already on the market).

But weren’t all the successful companies that made it from scratch to multinational built in this way? That’s what the biographies of their founders tell us. This may seem true, but it’s probably a case of ?survivor bias: Survivorship bias or survival bias is the logical error of concentrating on entities that passed a selection process while overlooking those that did not. This can lead to incorrect conclusions because of incomplete data. Survivorship bias is a form of selection bias that can lead to overly optimistic beliefs because multiple failures are overlooked, such as when companies that no longer exist are excluded from analyses. It can also lead to the false belief that the successes in a group have some special property.

In other words, to really understand what makes a start-up successful you should NOT simply look at those companies that are successful and learn from how they did it. Instead you should compare successful companies with non-successful or failed companies. And you might end-up with a totally different view of what makes up a successful start-up. And my hypothesis is that those companies that are successful outperform their not so successful peers on one very important issue. And that is how well they understand their market, the end-users and the dynamics in the market.

The thing is, all start-ups are based on fundamental hypotheses. If these turn out to be true, great success lies ahead. We can summarise these with what we call

The Big Assumption:

There is a substantial target audience,

that has an unfulfilled need,

and that considers my solution to be an attractive way to fulfill this need.

Every entrepreneur should have a very clear idea about who their target audience is and how their product will fulfill the needs of this target audience. Some are continuously validating their hypotheses. But many entrepreneurs I met recently only have a vague idea or none at all. ?

Many start-ups don’t become as successful as imagined at their conception. Why? Because they solve a non-existing problem. Or solve an existing problem in a way that is no better than solutions already on the market. A tough and expensive lesson to learn, but also an avoidable lesson.

Ignoring the consumer is one of the main reasons why start-ups fail or don’t even make it out of the garage of the founder. And think about investors. There are many investment funds and incubators that support sustainable food start-ups. They want their money to be invested in those start-ups that will be most likely to succeed. Therefore, the first question any investor should ask is: who is going to buy this? Immediately followed by: and why? In other words, what is your big assumption? A founder that has a profound answer, will be much more likely to secure funding.

Tried & tested tool: the concept test

There is a simple and achievable way to come up with clear and well substantiated answers to these fundamental questions. It’s as simple as presenting your idea to the target group and collecting structured, honest and unbiased feedback. It’s called a concept test and it will give you a good idea of the potential of your food start-up. By listening to your future target audience at an early stage you can innovate faster and reduce risks. You are able to validate your idea with real, honest consumers, when it’s still just an idea.

Testing your idea with real consumers will definitely help you develop the right product and tell the right message. And thus increase your chance of success. OR instead of learning the hard way, you might learn that your idea might not be as good as you thought it would be.

Learn fundamental stuff

Every time we run a concept test, we find invaluable insights that can fundamentally change the way entrepreneurs position their products. And we can achieve this in weeks instead of years. With real representatives from the real target group.

Some examples:

• The description of the ‘tropical flavour’ of a soft drink actually sounded very chemical and very sweet (while the drink itself is natural and not sweet at all).
• The chosen name for a vegan traiteur was not associated with healthy and conscious eating but with abundance and over-eating.. ?

Higher chance of success, less risk

A concept test is proven way to achieve this. This is what market research agencies and large brands have been doing for years. But start-ups and investors often seem to think it’s not achievable for them or maybe overlook the possibility. May I suggest to just try it? The affordability and speed may surprise you. Check our offer here.