How to conduct free and low-cost experiments to validate your new business idea

February 20, 2016

Entrepreneurs are always tempted to build their products secretly in a cave. This, however, is rarely the most effective way to succeed.

According to common Lean wisdom, the better route is to get the idea in front of customers early and often, smartly collect feedback, and iterate rapidly toward product-market fit. But, as anyone who has ever tried it knows, this is easier said than done.

How do you actually validate an idea? How do you best design experiments? Who do you ask to participate in them?

Let's back up a minute

If you've been following along in my pre-launch operations series thus far, we've been considering ideation, team formation, market analysis, customer personas, surveys & interviews, initial product design via an overview statement and user stories, and how to recruit appropriate advisors for your new venture. All of this is background work and an early “gut-check” validation to help you decide whether or not to proceed. It's important to do this work thoroughly and quickly, thinking of each step as an experiment in and of itself.

However, the most important tests come when you get your idea in front of a larger group people that aren't your close friends. In order to design these experiments smartly and effectively, I highly recommend having the foundation of the previous steps under your feet.

Customers

Depending on your business model (B2B, consumer facing, marketplace, etc…), you may already be well on your way to acquiring your first loyal customers via surveys and interviews. Use the data that you've collected to refine your target customer profile and identify the unique online and offline places where your customers hang out (ideally this was part of your surveys and interviews). You need to be thinking about communities. Hopefully you are pursuing an idea that you are personally passionate about, so genuinely participating in those communities first is critical so you understand the culture and don't spam people. Most communities will eagerly welcome smart experiments if you design them well (more on this below).

Low-hanging fruit

The best experiments are free or super cheap. To start, don't design and build an elaborate ladder to get the top of the tallest tree in the garden. Usually if you've taken the time to study the land carefully, you can identity the fruit to more easily acquire.

Therefore, the first thing to do here is to study.

In the online world, make sure you understand how the top social networks function. Most have groups/subgroups features where you can participate in public conversations around specific topics. The same principles apply to offline groups. Both online and offline communities are great places to float an idea, get feedback, and get the attention of early users. You can also run cheap ads to landing pages and test whether people swipe/click/scroll, enter their email address, etc… The Unbounce blog is a fantastic resource to understand the landing page game. I'd highly recommend their material and product.

You should also start a blog and a newsletter if you haven't yet. Especially in the early days, I'd highly recommend Medium for your blog and Mailchimp for your newsletter. Syndicate your posts to social networks to cast a wider net to land email subscribers.

Building a new community

For some products, an existing community niche may not exist yet. In these cases, you need to create the new groups/subgroups (online and offline), and pitch users in tangential groups to come participate.

For example, if your ultimate goal is to sell a novel flavor of red widgets, you can participate with the widget community and invite people to discuss the news/topics of the red variety, and leverage that community to introduce your product in a non-spammy way. Remember, if you build the right product and market it effectively, people enjoy learning about it and purchasing/engaging with it. Non-sales people tend to forget this and assume all forms of marketing/sales is shoving an undesired agenda down people's throats. While this is unfortunately true in many cases, it doesn't need to be that way.

Validation with data

At the end of the day, free and low-cost experiments are meant to validate your idea without having to spend time and money writing code or otherwise manufacturing your product. To do this most effectively, however, you need to collect data.

If you are getting sufficient traction in your early experiments here, you have your validation and community to start the hype leading up to your private beta. Now it is time to execute and build your product, which I'll dive into specifically within future posts in this series.

Author's note: this is the 10th post in a series of articles outlining a pre-launch operational framework that I've been developing over the last 10+ years of building web products. Feel free to subscribe to my newsletter and I'll let you know when I get new content up. Thanks!

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