Did you know why businesses fail? No, most of the times, it’s not because their ideas suck; it’s because their market research sucks, leading to a poorly executed marketing campaign.
The key to your business success is not by having a great idea; cool ideas are, well, cool, but you need to be realistic; you need to know whether there is actually a market for your cool products. This can be done via market research.
The big question is, how to do idea testing effectively? How not to burn a hole in your pocket hiring a market research firm? Ultimately, how to reduce the risk of business failure?
Well, I’ve search the web and found these awesome tips from the experts who have been there and done that:
1. “Fake-launch” your product to your target market
He suggests that before you figure out how to turn your idea into a real, operational business, you should test the market first. How to test the market even before you launch your business? Just fake it, the Kickstarter style.
Faking it is not scamming! It means that you should pitch your market to see whether there will be takers or not – just like Kickstarter; in the popular crowdfunding site, users can raise money from supporters for developing a product that will only be delivered if the project has reached funding milestone. If your idea turned out to be sucks, then you won’t have many “funders” and your project is deemed unsuccessful – the good thing is, you don’t lose a dime launching a failing product to the market.
Susan Jones of Ready Set Startup! also voice the same idea. She mentions that she is a great advocate of testing an idea in the market prior to launch.
The main benefit of doing so is the fact that you will get plenty of information about your target market’s profile and need/want. Moreover, you’ll have a chance to refine your business model before the grand launching of your products/services.
2. Use free tools for market research
Online tools – especially the free ones – can help you do market research to see whether your ideas will potentially have buyers. Indeed, you CAN bootstrap your business idea testing.
You can use Kickstarter to pitch your ideas, just like what explained by Dane Carlson earlier. But that’s not the only way to go!
Ready Set Startup’s Ms. Jones also suggests budding entrepreneurs to create a free website, launch an online survey, email their contacts, and test-selling your products on eBay to dig deeper into the market.
In his article on IdeaBank, Nick Jerrat shares similar tip to Susan’s: Setting up a free website and eBay auction page for a shadow testing, to see whether there is a demand on your product.
Nick adds that you can use Google search as your market research tool. Using Google Keyword tool, you can identify which keywords are actually shown up in volume when users are looking for something. StartupBros’ Will Mitchell explain in depth on this, and further recommend you to run an Adwords (Google advertising program) campaigns to see what exactly will convert better, to see whether your ideas are finding interested prospects via the ads.
I am particularly interested in what Lean Startup Machine is doing with its Validation Board; it’s a great tool to test your business idea without wasting time and money – my kind of tool
Tools are aplenty – choose one that best-suit your business’ needs.
3. Partner with those who have the ‘insider’ information
I’ve found an interesting read from The National Federation of Independent Business, suggesting you to work with indirect competitors to test your idea. The idea is to understand whether similar idea is actually working well in your indirect competitors’ market.
To do that, you first need contacts. You can find contacts via LinkedIn, Facebook or other social media, via your chambers of commerce, and via business networking events – to name a few. Ken Krouge’s article on Forbes can help you get started with acquiring contacts via social media.
Terri Lonier shared in her article an interesting method of market research: Ask librarians. They know a lot of resources where you can find studies and researches with regard to your target market; the can even connect you with the organization or individual who conducted the research.
4. Get trusted learning resources
The Internet can provide you with wealth of resources on biz idea testing. Your job is on how to discover the right ones. To help you starting out in your independent research, here are 10 must-read articles that can give you some practical tips and insights on how to do market research and testing:
Failing business fail to address the market’s needs and wants, and end up creating a product nobody wants to buy.
You see, you might have developed the best products in the world… but if you promote them to the wrong market, you won’t get any buyers. Instead of investing a million dollar for a perfect product, it’s better for you to work on the basics: Looking deeper into your target market.
Market testing shouldn’t turn you off; it shouldn’t be expensive, either. Why spend $500,000 on research if you can use easier, cheaper – even free – alternatives available?
Do you have any tips on how to test your biz idea? If so, please share yours!