Do you have an idea for the "next big thing"? You may think your idea is perfect the way it is, but it's wise to test it out before you spend a lot of time and money developing a business or product for which there's no market. Here are six steps to help you make sure your product is something the world wants, before you launch it.
1. First wait; then build a prototype or test service.
Although you're excited about your new business idea, you might want to wait a while before testing it, Greg Isenberg, a venture capitalist and serial entrepreneur, said in a 2014 interview.
"After I've gone through the process of writing down a bunch of ideas, I don't like to rush into building a business plan or recruiting the team," Isenberg said. "I like to wait a few weeks, [to] see which ideas really stick with me."
Isenberg said he only moves forward if he has a burning feeling that the world really needs his idea.
"Once I'm through that, the best way to test a business idea is to build some prototype and show it to people to get some honest and authentic feedback," he said. [Looking for a business idea? Visit our Business Idea Page]
2. Build a minimum viable product.
A minimum viable product, or MVP, is "the simplest form of your idea that you can actually sell as product," said Eric Ries, a Silicon Valley-based entrepreneur and the author of "The Lean Startup" (Crown Business, 2011). Using the principles of Lean Six Sigma, Ries' book advocates having a version of the product to test and market early in the development process so that any tweaks or changes are in response to real feedback from the target audience.
3. Run it by a group of critics.
When you have your first prototype or test service ready, take it to your potential target customers.
"You should talk [to] and/or survey at least 50 potential customers, to see if they identify with the problem the same way you do," said Wayde Gilchrist, a startup consultant and host at TechStartRadio.com. "In other words, you need to find out if this is a real problem for a majority of your target market, or just a few," he said.
However, to really put your new business idea to the test, select your 50 potential clients or customers carefully.
"Identify people in that target you know to be skeptical and critical," said Chip Bell, founder of the business consultancy firm The Chip Bell Group. "These people could be irate customers from previous encounters, or friends who always take the glass-half-empty perspective."
Bell advised handpicking your test group and then asking these people to pick your ideas apart.
4. Tweak it to suit your test market.
Isenberg took a similar approach to testing 5by, an Internet video finder app he developed and has since sold. Isenberg and his team went to college campuses and showed mock-ups of what the product was going to look like. They found the feedback from students invaluable in fine-tuning the original idea.
"We were able to quickly gauge that people ... were frustrated that they couldn't open an app and just be able to find the best Internet videos in whatever they were interested in with just a tap of a button," he said.
Isenberg realized that although his initial business idea and mock-up were a good start, they needed tweaking.
"We quickly knew we were onto something, and then focused on building out the product, raising money, etc.," he said.
5. Create a test website with social media tie-ins.
Once the word is out about your product or business, the target market needs a place to get more information about it or to show it to their friends. Building a simple website and using social media are ideal tools to provide information and monitor how many people are interested in what you are selling.
"You'll be able to tell if the idea will get traction from the number of click-throughs on the ads, and the number of people who fill in your form," Gilchrist said.
6. Create a marketing plan and use it.
All of the preparatory work means nothing if you do not perform enough actions to get a good measure of response. Once you have a viable product, you need to be able to act on the interest in it, said Ryan Clements, a consultant to entrepreneurs on marketing and sales strategy.
"Having worked with many startups — both on my own account as entrepreneur and as an adviser to others — I like to use a rule I call 100 / 1,000," Clements wrote in a blog post on IvyExec. "Make a list of 100 things you can do to market the product, and then execute that list of 100, and in the process, speak with 1,000 people about the product."
If you do this, you will have data on your product, Clements said. You'll know who is interested in it, what marketing strategies worked and didn't work, and how you can improve, all of which are invaluable steps in getting your idea and business off the ground, he added.
This article was originally published in 2014 and was updated Feb. 2, 2016. Additional reporting by Sarita Harbour.