5 Ways to Validate a Business Idea, Right Now Don't let your day job or lack of capital stop you from finding and testing a business idea. Here's how.
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Last year, I embarked upon a personal challenge to validate a business idea in 30 days.
To make it even more difficult, it was a random idea chosen by my readers. They asked me to do it without using my existing website, traffic and business connections and without spending more than 20 hours per week on the project. On top of that, I limited myself to spending no more than $500 validating this idea.
The experiment was a success.
In just two weeks, I built an email list of 565 subscribers without having an actual website. Then, I reached out to a handful of those subscribers and pre-sold 12 copies of a book that didn't even exist yet, all in less than 30 days. I wrote about the experiment in real-time with in-depth weekly updates, successes, failures and lessons learned along the way, right here in my validation challenge.
Today, I want to share with you the five most effective ways to validate a business idea -- quickly and without breaking the bank, based on what I learned through this experiment and from building several other businesses over the years.
1. Join an online community.
All great business ideas come from solving your biggest frustrations; the ones are also facing with similar obstacles. Want to uncover which problems you could get paid to help people solve? Join a topically relevant group on Facebook, LinkedIn or Slack, where members all have a shared interest.
Start asking genuine questions. Determine what their biggest challenges are in your topic area. Through these conversations, you'll hear first-hand from your target customers exactly what they want. This gives you an incredible opportunity to create something more valuable, effective and unique to satisfy their needs in ways that others currently are not.
2. Guest posting.
The logic behind guest posting is simple. Get a preview of your upcoming solution, the idea you want to validate, published and highlighted on a more popular website that already has your existing audience built-in. Within your guest post on the same topic as the idea you want to validate, include links back to where readers can have the opportunity to learn more about what you're building.
When I wanted to validate the idea for my first online course teaching people how to build a side business, I spent countless hours landing my first guest posts on blogs like Buffer, CreativeLive, The Daily Muse and other destinations, where I knew my audience was already reading.
Shortly after sending a cold email pitch to a writer at Buffer, my first guest post about finding meaningful work went live and in less than a week I'd amassed a couple hundred email subscribers that wanted updates on my course. The phone, email and Skype conversations I had with those early subscribers laid the foundation for the community I've grown and the products I've built.
3. Facebook ads.
If you're willing to allocate a budget of $100 to $200 for driving paid traffic to your landing page through Facebook Ads, you can expect to get upwards of a couple hundred highly targeted visitors to come check out the idea you're working on.
With a previous business, my partner and I were able to validate a brand new product line before investing in it. We spent $100 on Facebook Ads, collecting leads by offering a free downloadable guide. Then we transitioned into phone conversations with those potential customers, before landing our first $5,000 sale in less than two weeks. If you're ready to try out your first Facebook Ads, get started and do it right.
Choosing to run a contest or giveaway to help validate your idea can be massively successful in terms of growing your list of prospective customers, if you choose the right incentives to include in your giveaway. One of the most common mistake entrepreneurs make with hosting a giveaway, is awarding prizes that everybody would want to win.
If you run a giveaway, the prize needs to be very closely related to the solution you're planning on building. That means no Amazon gift cards or iPhones. If you want to host a giveaway to validate your photography-related website idea, start by asking what photographers want most, which could be a free subscription to Adobe Lightroom, a new lens kit or a coaching session with a well-known photographer in their space.
Then, make sure you're using the right giveaway platform to help incentivize entrants to share with their communities. If you can get each giveaway entrant to refer five of their friends, you can quickly go viral and build a large interest list. The Kingsumo Giveaways plugin for Wordpress has this incentivized sharing feature built-in.
5. Amazon reviewers.
Want to validate your product idea? Start by combing through reviews of related products on Amazon to see what existing customers like, dislike and complain about most. Focus on identifying the two and three star reviews, where the customers are somewhere between ecstatic and wildly unhappy with their purchase.
Then, click through to the reviewers profile and click the button that says show more; the vast majority of Amazon reviewers that don't edit their default profile settings, so you'll likely see an option to send them an email. Reference their review, briefly mention you're building something similar that's designed to improve upon the product they reviewed, and ask whether they'd be up for answering a few questions.
At the end of the day, to succeed in business you need to be helping real people solve real problems. More importantly, as serial entrepreneur and TED speaker Derek Sivers shared with me in a recent interview, "Start now, you don't need funding. For an idea to get big, it has to be useful—and being useful doesn't need funding."
The psychological trap of needing more time, money, experience or other resources before starting to build a business holds many aspiring entrepreneurs back from ever achieving their dreams. You have to work with what you've got. Start by simply validating your idea. The goal of validation is to give you relative certainty about the viability of your idea; it's not a guarantee of success.
Validating your idea today will help prove that you'll have a growing, paying audience of customers for the solution you plan on building, before you go out and create a finished product or service. Without validation, you run the risk of creating a solution to a problem that doesn't really exist. Begin without grandiose expectations and just endeavor to be useful to people today. Help them overcome their challenges, document what works and see where it takes you.