Many entrepreneurs have so much confidence in their product idea, and are so sure that it will be a success, that they skip one of the most critical steps when bringing a product to market. That step is to first validate the product idea.
First, you need to make sure that there’s a market for your idea. Then, you need to verify that those people will pay money for your product.
It’s really exciting being an entrepreneur. You have a great idea, a big dream, and a lot of energy to make it happen. You want to move forward with getting your idea developed into a product and on the market as fast as possible.
This article was originally published on PredictableDesigns.com. Download their free cheat sheet 15 Steps to Develop Your New Electronic Hardware Product.
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But it is essential that you slow down, and take time to validate that what you’re pursuing is a good idea.
There are really many sides to what defines a good idea. First, people have to want the product enough to pay for it. Second, you need to be able to manufacture the product at a cost low enough to allow you to sell it at profit. Third, it needs to be feasible to develop and manufacture.
It’s very dangerous for you to assume that you know what people want. You’re only one person, and it’s impossible for you to truly know what other people want.
You have to validate your idea first so you can make sure that it’s something that you’re going to want to pursue. Bringing a new hardware product to market requires a lot of work, time, and money so you want to make sure it’s an idea worth pursuing.
You need to prove, as much as you can in the early stages, that people will actually pay money for your product.
In this article I’m going to review 10 different strategies to validate your new product idea. These strategies are loosely organized from the easiest to the most difficult to implement.
It all starts with sharing your idea with others, otherwise you can never validate it.
Probably the biggest concern for most new entrepreneurs is that someone will steal their idea. In reality, it is an extremely rare occurrence for someone to steal a product idea.
It just doesn’t happen, so you need to quit worrying so much about it. Nothing will hold you back more than being too paranoid to share your idea with others.
The truth is you are likely not the first person to have this idea. There are close to 8 billion people on this planet so unless you happen to be an Albert Einstein the likelihood of your idea being completely unique is extremely rare.
But, you can be the first person to successfully execute on the idea. Execution is what can set you apart from all of the other people that had your same idea.
No one will even consider ripping off a product idea until you have proven that it is a success. Later, once your product is making big money, then competitors and potentially knock-offs will start showing up.
But in the early stages, this is the last thing you need to be concerned about. Fearing someone will steal your idea will keep you from sharing it with others.
If someone stealing your idea is a legitimate concern, then be sure to file a provisional patent application. Provisional patents will give your product idea protection for one year, which should make you feel more comfortable sharing your idea and work with others.
The provisional patent only costs a couple hundred dollars and is a good place to start. I definitely do not recommend that you spend ten thousand dollars getting a full patent before you share your idea. Patents are time-consuming and expensive, so you should validate your product before getting a full patent.
There’s no way you will ever succeed if you don’t share your product idea with other people. You cannot just keep your ideas closed up inside your own head. You absolutely need the feedback of others to give you a dose of reality, and to make your idea into a real product.
Eventually you have to tell others about your product, so why not just do it upfront so you can validate the product before proceeding too far.
I always suggest that you share your idea with as many people as possible outside of your friends and family. You need to get feedback from people who will be completely honest with you.
Online business expert Pat Flynn of SmartPassiveIncome.com, and author of the book Will It Fly?, proposes why not start a conversation with the stranger that’s in line behind you at Starbucks?
I realize that talking to some random person in line about your product may be uncomfortable. But as an entrepreneur you’re going to have to go outside your comfort zone.
The second way to validate your product idea is to look at the competition. Many new entrepreneurs falsely believe that competition is a bad thing.
Competition is not a bad thing, in fact, just the opposite. Competition is actually a good thing, when it’s in the right amount.
Competing with a massive company like Apple for instance, is probably not a good idea. You don’t want to compete with someone that is such a dominant player in your market.
However, you do want some competition.
Having some competition shows that there’s actually a market for your product. Competition is a form of validation. It validates that people are willing to pay to solve the problem that your product solves.
It’s usually better to be second to market then to be the very first. That way you can learn from their mistakes, allowing you to more quickly iterate and improve your own design.
You want to look for a competitor that’s making money, but one that you don’t think is doing things optimally. It’s better to look for holes in an already proven market, than to pursue an unproven market.
Like I said, you don’t want to compete with companies that are doing things right or that are dominant players like Apple or Amazon. But you do want competition if you feel you can do better than them.
I’m going to start with saying that surveys are an okay form of very early validation. They’re definitely not one of the best ways, but they’re an easy way to get some sort of early validation. But you have to use them with caution.
Even if you are surveying random people, it’s just human nature for people to want to be nice and to say yes.
Survey questions like “Would you buy this product?” are inherently flawed because what people say they will buy isn’t the same as what they will actually buy.
For example, if 60% of survey respondents say they’re going to buy your product, I can guarantee your actual sales will be nowhere near 60%. In reality, it may only be 6% that will buy your product.
Another use for surveys, though, is to gain feedback on how to make your product better or more appealing. This means asking survey questions like “Which features are most important to you?”.
Survey answers can also help you find hidden issues that may be easy to solve. For example, your survey respondents may express that you need to more clearly explain the purpose of the product, which isn’t a development issue but rather relates to your package design.
Keep in mind that it takes real money exchanging hands to know if a person will actually buy the product. Nonetheless, positive survey results are still a good early sign that you are on the right track.
Don’t have an audience yet? Well, you’re going to need an audience sooner or later.
So I recommend that you set up a website, and start collecting e-mail addresses as soon as you decide to pursue your product idea.
Ideally, your web site will provide information related to your product category and collect e-mail addresses of people interested in that topic.
This means you’re going to have to start a blog and produce lots of high value content. Instead of talking exclusively about your product, talk about things related to your product’s market.
If you are developing a fitness related product, then write a blog about fitness and start collecting e-mail addresses of people that are interested.
This online audience is great for gathering feedback on your product. You can send visitors your survey instead of trying to send cold traffic to it.
Or better yet start up conversations with these people to help you better understand the problem you are attempting to solve.
Also keep in mind that this audience will be extremely useful down the road when you start selling your product, or running a crowdfunding campaign for it.
But, building an online audience is a slow, long-term process so you need to start as soon as possible. That way by the time you are ready to launch your product you’ll have a list of people interested in it.
Another way to validate your product idea is to reach out to retailers, distributors and sales reps that deal with products similar to yours.
Keep in mind that no one person is going to know if a product will be successful. I don’t care how much experience they have, nobody knows for sure if a new product will be a hit.
This is why big retailers like Walmart start off selling brand new products in a few stores, and not all their stores. They are unsure if it will sell so they always start by testing it in a few locations.
The important point to remember is that even experienced retail buyers don’t know for sure if a new product will sell. Professionals at large retailers still need real sales data to know for sure.
Sales reps and retailers may not know for sure if a new product is going to sell. But, nonetheless, they still know better than you do. They likely have years or decades of experience to base their opinion on.
Go down to your local Best Buy and ask to talk to the store manager. Then share your product idea with them to get their feedback. They will have valuable experience in knowing what types of products do well in their store. You may need to visit a few stores to find a manager willing to help you.
Another way to get feedback is to find independent sales reps that already work with products similar to your own. These are independent sales people that work on a commission basis. The Manufacturers’ Agents National Association (MANA) is a good place to find sales reps.
You can also find them on LinkedIn or of course through Google if they have a website. Reach out to them and get their feedback on your product idea. In my experience sales reps will be happy to share their feedback with you.
Another way to validate your product idea is to set up a sales page test and send cold traffic to it. Then you simply see how many people try to buy it.
You probably won’t have product photos at this point, but you can create a 3D, photo-realistic model of your product idea. To most people it’s going to look like the real thing.
You want the sales page to make it seem like your product is available now with a big Buy Now button. You likely won’t have real product images yet that you can use, but you could have a photorealistic 3D model created relatively cheaply.
When they click on the Buy Now button, you need to have a pop up message that says something along the lines of “Sorry, this product isn’t currently available. Please enter your email address and we’ll update you once it’s available.”
Once the sales page is all setup then you can begin sending cold traffic to it. Since the product isn’t really available yet, and the sales page is kind of misleading, don’t send your warm audience to it.
Instead, I recommend running Facebook ads, targeting the demographic that you think fits your potential customers. Send them to this test sales page and measure the percentage of people that click on the Buy Now button.
Even though you don’t have the product for sale, and these customers aren’t giving you any money, in their mind they are ready to give you money.
This is a really good way to quickly test whether or not this is something that people would actually want to buy.
Creating a waiting list is a little bit different than building an audience around your content as I discussed in strategy #4 above.
People on a waiting list don’t just want a free download and aren’t just interested in your content. These are people that are interested enough in your product to give you their email address so it’s a more powerful form of validation.
This is exactly what I’m doing now with my upcoming membership program called the Hardware Academy. This program is designed to help you bring your product to market. You are on the waiting list, right?
Fortunately, in my case, it’s been a big success and my waiting list size has already surpassed my validation goal. The success of growing my waiting list gave me the confidence I needed to move forward with this program.
But, there’s still no money exchanging hands, so a waiting list is a rather low level of commitment. People have only given you their email address as validation.
This is why I’ll also be implementing the next two validation strategies for my new membership program.
Pre-selling means selling your product before it’s actually available. Like I’ve said, the best way to validate your product is to actually sell it. You need to sell it before you make it.
Well, how do you sell something before you make it? The solution is to pre-sell it. You get people to pay you money now for something they will receive in the future.
If you’re just at the idea stage, it’s going to be quite a while before buyers will actually get anything. So definitely make sure that your customers know that ahead of time. You should make them aware that this is very risky and there’s a good chance that they’ll never receive their product.
That can be a difficult sale so you need to likely focus on those people in your audience who already know and trust you. This is typically not an option that will work well for cold traffic.
You may need to also offer discounts or bonus items to encourage people to put money down on your product before it’s available.
Even if people buy your product at a steep discount, this is still the best kind of validation because real money is exchanging hands.
An efficient way to validate your product is to build what is called a Minimum Viable Product (MVP).
Up until this point, we have discussed validating your idea before you have actually built anything. But ultimately, the best validation is delivering your product to paying customers, and gathering their feedback.
You need to find out if they would buy the product again? How would they improve the product?
However, answering these questions requires that you have a real product to sell. Instead of developing the ideal product that you think people want, it’s much better to develop the simplest version possible.
Then, you can quickly and more affordably gather customer feedback to understand what people really want. Then, you can iterate your product based on the data that you’ve collected from the MVP.
Eric Ries of The Lean Startup methodology is the main person behind the concept of a minimum viable product. He calls this process a build, measure, learn loop.
You want to build something as quickly and cheaply as possible, and get it on the market. Then, learn all that you can from customer feedback and reiterate. This time you will build a product that’s closer to what the market really wants.
This is a safe way of doing product development, especially if you have a product with lots of different features that you’re not sure people will want. You need to home in on the minimum set of features that people absolutely need to solve the intended problem.
Crowdfunding is essentially just pre-selling your product which we’ve already discussed. But crowdfunding goes further because you’re pre-selling it in exchange for equity in your company.
It’s a dual-purpose strategy where you are both validating the product and raising investor funding. That makes it considerably more complicated than just pre-selling your product from your own website.
Keep in mind that with crowdfunding you usually need to already have a working prototype. There are so many cases where people have ran a crowdfunding campaign when they had nothing but an idea. They may promise to deliver a product in one year, but then they never are able to deliver.
When you are just at the early idea stage, there are so many unknowns that it’s impossible to accurately forecast when the product will be available for sale. So crowdfunding isn’t the best option at the beginning.
But, once you have a working prototype crowdfunding can be an excellent form of validation and provide an infusion of cash into your startup.
These are 10 ways to validate your new hardware product idea before jumping headfirst into full product development.
This validation can save you years of work, and tens of thousands of dollars. But most importantly, validation will greatly increase your chance of ultimate success with your product.
Do not skip validation, no matter how amazing you think your product is! It’s absolutely essential to verify that your idea is really worth pursuing.
Originally published at https://predictabledesigns.com on May 17, 2019.