How to Test Your Startup Idea

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parts

1Identifying a Need

2Understanding Your Target Consumers

3Building a Demo Product

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You may think you have a startup idea that could be the "next big thing," but you'll never know for sure until you test it to see how the market reacts. However, if you want to test your startup idea effectively, take a step back first. Rather than focusing on the solution you're bringing to the table, look at the problem your idea is trying to solve. If your idea doesn't solve that problem for your target customers in a way that's more efficient and hassle-free than any other solutions currently out there, your startup might fail before it even gets off the ground. Get out and talk to potential customers, then offer a streamlined version of your product that will help you evaluate demand.

Steps

Part 1

Part 1 of 3:

Identifying a Need

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   Brainstorm a list of problems that you experience regularly. When you're looking for a problem to solve, you can sometimes be your own best customer. If you can tap into problems that you encounter on a regular basis, there's a chance that many others are dealing with the same things. Start by listing 5 or 6 problems that you find frustrating or mentally painful to deal with on a regular basis.

   • For example, you might get really frustrated trying to manage social media. You know that your company should have a social media presence and engage with consumers, but you find it difficult to keep up with and find that comments often slip through the cracks.
   • If you already have an idea or a product in mind for your startup, think of problems that your product or idea could fix.
   • This list doesn't just apply to you personally. It could also be problems that you've heard people experience, even if you don't deal with it yourself.
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   Simplify each problem into a single sentence. Look at your list and refine your ideas down until they are as specific as possible and can be expressed in just a few words. Your product or idea should be designed to solve at least one of these problems.

   • For example, if you have difficulty managing your social media, you might simplify the problem as: "It's hard to keep up with comments on social media and filter out the ones that require a response."
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   Determine which problems are most important. Ideally, your startup idea should address a problem that is fundamental and necessary to your customers. If the problem is important and your solution to the problem is valid, your product will also be important and will become a "must-have" among your target consumers.

   • Look at costs associated with the problem. Typically, the more costly the problem is, the more important a solution to the problem will be.
   • For example, if you have to hire someone to monitor your company's social media, their pay would be an expense. Providing that person with office space and equipment, such as a laptop and a smartphone, would be additional expenses.
   • If you could create a product that eliminated the need for this additional employee, you might be able to convince other small business owners that your product is something they need to develop their social media presence.

   Tip: If you focus your startup around something that would simply be "nice to have" but isn't necessary, you'll have a hard time convincing people to pay money for it.
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   Evaluate existing solutions to the problems. If a problem is significant enough, it's likely that other companies have already taken a stab at trying to solve it. Take a look at those other efforts and figure out where they went wrong or what they're lacking.

   • For example, if you're going after a solution to the problem of monitoring social media, you might look at other social media management tools and services that are already on the market, such as IFTTT (https://ifttt.com/) or Buffer (https://buffer.com/guides). Consider what these tools do and what they don't do.
   • Perhaps you've found that while there are many different tools that businesses can use to monitor their social media, there's no single tool that does everything a business needs to do. Each tool covers only one aspect of social media marketing (creating posts, curating content, monitoring for mentions, scheduling posts).
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   Look for an opportunity to solve the problem in a better way. For your startup to succeed, it needs to do something different and better than the other companies that have attempted to solve the problem you've targeted. If your product isn't going to be significantly better than another product already on the market, you're going to have a hard time getting it off the ground.

   • For example, there are many different tools and services business owners can use to manage their social media marketing. However, your average business owner would need at least 3 or 4 of these tools, and many business owners are unsure which ones they really need. #*To solve the social media management problem, you might try to create a tool that allowed your users to do all of the activities associated with social media marketing through a single app instead of several.
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Part 2

Part 2 of 3:

Understanding Your Target Consumers

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   Create a profile for your target consumer. If you want to know if there is demand for your startup idea, you need a good idea of who you plan to sell it to. Identify whether you're targeting business owners or consumers. If you're targeting business owners, narrow down what industries they're in and how many employees they have.

   • For example, if your idea is a tool for small business owners, you might be looking for business owners with 50 — 100 employees in the retail or service industry.
   • If you're targeting general consumers, identify the age range and socio-economic class of the consumer most likely to be attracted to your product. You might also look at other interests that target customer might have.
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   Interview potential customers about the problem. Once you have a customer profile, find individuals who fit that profile and contact at least 50 or 60. Let them know that you're not selling anything, just doing research, and you'd like 5 to 10 minutes of their time to ask them some questions.

   • Don't expect a response from everyone you reach out to. If you send messages to 50 or 60 people you might get 20 who agree to talk to you.
   • Social media can be helpful for finding your potential customers. For example, if your target customer is a small business owner, you might run a search on LinkedIn.
   • If your target customer is a consumer, look at active social media users who are members of groups or frequently use hashtags that you associate with your niche customer's interests.

   Tip: Try to talk to at least a couple of social media "influencers" who have significant followings. They often have an innate understanding of what people are attracted to and can potentially help you build your brand later on.
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   Find out how potential customers are currently addressing the problem. When you interview your potential customers, start by identifying the problem that your product is trying to address. Ask each potential customer if they have experienced this problem and what they're doing to attempt to eliminate the problem.

   • For example, if you're designing a product that would provide all functions necessary for a small business to manage its social media presence, you want to find out if the small business owners you're talking to have difficulty managing their social media presence and what existing products they're using to make it easier.
   • If you find that most of the people you interview don't really have the problem, or aren't tremendously bothered by it, you may want to go back to the drawing board. If the problem isn't as big of a deal as you initially assumed it was, you won't have a strong demand for your product.
   • Likewise, if the people you interview are reasonably happy with the solutions already offered by existing products, you're going to have a hard time selling yours unless you can convince people that it's significantly better than what they're already using.
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   Assess your potential customers' interest in your product. After asking your potential customers about the problem and what they're currently doing to address the problem, ask if they'd be interested in a product like yours. If they indicate that they would be, take your questions a step further and find out how much they'd be willing to pay for it.

   • For example, if you have a social media management product, you might ask, "How likely would you be to switch to a product that could take the place of the 4 products you currently use to manage your social media presence?"
   • You might address pay structures as well. For example, they might be interested in buying a product like yours for a single flat fee, but unwilling to take on a monthly or annual subscription to use the product.
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   Develop your idea to address your customers' needs directly. After you've talked to potential customers, you should have a better idea of what your product needs to do to effectively address the problem for them. Use that knowledge to fine-tune your own idea so that it responds directly to the issues those potential customers have.

   • For example, you might have found out through talking to small business owners about social media management that they aren't as concerned about scheduling posts since they're happy with the product they have that does that. However, they're worried about mentions that don't actively tag their business falling through the cracks. So you'd want to make sure the ability to track those mentions is a feature of your product.
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   Talk to experts in the industry about your idea. Analysts and consultants can tell you if there's an actual need for your product and if it has a chance for success. Because they also know other products in development that the general public might not know about, they can also tell you what kind of competition you're likely to face.

   • For example, you wouldn't want to spend 9 months developing your product only to have a major company release a similar product 2 months before you're scheduled to launch. Industry experts and insiders can give you some insight into the possibility of that happening.
   • Industry and trade associations are good places to find experts. You could also search for consultants on LinkedIn. Keep in mind that you will likely have to pay these people for their time.
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   Maintain contact with the potential customers you interviewed. Ask each of the people you interview if they would be willing to talk to you again and continue to offer you opinions and ideas about your product. If they agree, take contact information and send out a newsletter to this group at least once a month to catch them up on the progress you're making.

   • You can use this group as a focus group for early testing of your product. You might also offer them incentives to continue to participate. For example, if you have a social media management product, you might offer to let them use it for free for 6 months if they agree to give you feedback during development.
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Part 3

Part 3 of 3:

Building a Demo Product

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   Create a web presence to get the word out about your product. You can get your branding out there before you even have an actual product to offer people. If you get people interested in or even excited about your brand, they'll be more likely to buy it when it launches.

   • A basic "coming soon" website with perhaps a short video about your product is really all you need. However, you might also include a blog or other content to talk about the problem your product addresses and how your product addresses the problem more elegantly and efficiently than other products currently on the market.
   • Include a social media presence by establishing accounts on major social media platforms, such as Twitter, Facebook, and Instagram. Tailor your posts to appeal to your target customers on each platform.

   Tip: You might also share news or information about the problem your product will address. This will get potential customers thinking about the problem and searching for a solution.
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   Attract a customer base before your product exists. Use your internet and social media presence to build up a following of people who are interested in your product. You might create a waitlist or get people to sign up for a newsletter that will keep them informed.

   • Offer insights and information about the development of your product to newsletter subscribers that are not released to the general public. This will encourage subscribers to believe that they're "on the inside" and have knowledge about something that others don't.
   • You might also offer your product to wait-listers or newsletter subscribers before your full launch to the general public. This soft launch also gives you the opportunity to make improvements or fix something that isn't working like it's supposed to.
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   Isolate the core features of your product. Your product is designed to address a problem. Figure out which features are absolutely necessary to use your product effectively. These are your core features. Ideally, they'll also be features that set you apart from existing products already on the market.

   • For example, if you have a social media management product, you might start by giving your customers the ability to track all mentions of their brand or products, regardless of whether or not users have tagged them directly.
   • During this time, you can continue to do things behind the scenes that won't necessarily work as your company gets bigger — things that won't scale. For example, you may have employees tracking mentions of brands on social media platforms using manual searches, then delivering the result to your customers. While your startup is still small, you can offer this solution while you work on automating the process.
   • If you have other features that duplicate other existing products, you can roll those out later after you have an established customer base.
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   Get influencers on board to review your product. Influencers have a lot of power to persuade their thousands of followers to take a look at your product. If they offer a strong, positive review or endorsement of your product, many of the people who follow them will take a look as well.

   • Check social media platforms for verified accounts with 10,000 followers or more. Many of these accounts meet the "influencer" profile. Focus on accounts that match the profile of your target customer or that have influence in your industry.
   • Contact influencers and offer them free access to your product if they're willing to review it. You may want to ask to see the review before they post it, or find out if they'll come to you if they have any problems with your product and give you an opportunity to fix them first.
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