Do you have a business idea that, you feel, has tremendous potential. You probably gained the insight by solving a problem you once faced. Brilliant! Today’s most successful companies were created because of that very type of insight.
For example, YouTube was founded by Chad Hurley, Steve Chen, and Jawed Karim; all early employees of the online payments and money transfer company, PayPal. According to an oft-cited story, Hurley and Chen developed the idea for YouTube in early 2005, after they had experienced difficulty sharing videos shot at a dinner party. Today, according to company reports, “more than 1 billion unique users visit YouTube each month, and over 6 billion hours of video are watched each month on YouTube—that’s almost an hour for every person on Earth.”
But when you’re solving your own problem or one that you feel is the pain point of a certain target audience, how do you know whether there is a large enough pool of people that face the same problems you are trying to solve?
If you’re just selling a product, you’re better off creating it and getting it to the market. But if you want to build a business out of it, you need a sizable market for scalability.
So the next logical question that most entrepreneurs ask themselves is this: How do I determine market demand for my startup idea?
Read these four tips to get started:
Decipher market demand with Google.
Deciphering market demand can be as simple as looking up your idea on Google because it has most of the answers you’ll need. So, how exactly can Google to help you? Start by using the Google Adwords keyword tool to quantify the number of people seeking out your business idea.
Type the keyword(s) in the search box, select the target country or countries and Google will show you the number of average local and global monthly searches. This is a really good indicator of demand.
Build a minimum viable product (MVP).
“Market research and business planning are overrated. The best market research is putting a product out and seeing if people will buy it. The best business plan is to create something great and sell it fast,” says Guy Kawasaki, a Silicon Valley author, speaker, investor and business advisor.
Writing a business plan with projections through market research is a quick way to startup doomsday. Nothing beats an actual customer using your product or service. So, how do you get to the customer when you’re at the idea stage and don’t want to go broke building something they might not want?
Build a minimum viable product (MVP) or a prototype. The idea is to put out something that offers the core value or your startup or solves the core problem of your customers. The MVP could be a PowerPoint slide, a dialogue box or just a landing page. This is something that you can often build it in a day or a week. A prototype can be an actual functioning product with core features. Share this with your network and gauge the response.
Create an online landing page.
You may not have a product yet, but it is still important to get customer buy-in. If this is your plan, then landing pages are a startup’s best friend. Create a teaser or promotional landing page, which highlights the core proposition of your startup. Turnplay, a vinyl record playing app for iPad, illustrates a great example of a landing page that does just that.
Ask for a visitor’s email addresses in return for an offer or simply to share updates about the startup as you go to market. The number of email subscribers will determine how many people are interested in your startup.
Try using Launchrock or KickoffLabs to create your landing page. To increase traffic, create a Google Adwords and Facebook marketing campaign. Point the advertisements to your new landing page to drive traffic. Use Google Search and Network Partners to spread the campaign to a larger number of people. You would much rather spend a little money to be sure your business idea is marketable, than spend a fortune building a product that customers don’t want.
Leverage the power of the crowd.
Crowdfunding is an excellent platform to solicit actual buy-in for your product or service. This concept has increasingly becoming popular with the likes Kickstarter, RocketHub, and Indiegogo launching online crowdfunding platforms to bring startups looking for funding and individual donors together.
Apart from securing funding for your startup, you can also learn how many people are actually interested in your product or service. If donors are interested enough they will pledge their money. Here’s a list that showcases the most funded projects on Kickstarter, as an example.
Whatever your path may be, make sure you build something that customers want. As Guy Kawasaki puts it, “This isn’t rocket science. It’s mostly hard work and luck.”
Rahul Varshneya is a startup coach and the co-founder of Arkenea, an enterprise mobility and cloud solutions provider. He writes on starting up and mobile strategy at http://rahulvarshneya.com/blog. This post originally appeared on the author’s blog.
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