As anyone starting out in their own business knows, there is rarely a straight line to success.
Having launched a successful advertising business (an industry I’d been in as an employee for 10 years) I thought I was hot stuff. Mr Entrepreneur!
Having had a challenge with finding an emergency plumber around 12 years ago, my mind started working on developing the world’s first live telephone directory to connect tradesmen with customers. The key benefit being that you would only be shown tradesmen that were available immediately.
I immediately embarked on market research. Is this something that customers wanted?
It was a resounding yes, so we went to work on hiring staff, building systems and of course getting a fancy logo produced.
The one thing I missed was who was actually going to be paying for the service. As this was planned to be the businesses who would be funding it, when we spoke to them, it was a resounding no! They already felt they had enough business and didn’t need to advertise.
Convinced that if we built it, they would come, we pressed forward regardless to our peril and cost.
It was a very valuable lesson in how not to test the market.
If I were to start again I would definitely do things differently and nowadays, we have many different ways to test the market in advance. Here are the three takeaways that may be useful for your business.
Who’s got my money
When launching a business don’t just rely on whether people think it’s a good idea.
Go find the people who are your ideal customer and pitch them on both the idea and the pricepoint.
In an ideal world you’d get firm commitments in advance or orders so you know you are on the right track.
Use a Minimum Viable Product approach
I would get a working version to market as soon as possible.
So if you are planning on launching a retail unit, can you find a pop up location first and prove there’s a demand.
If it’s a website, you’d don’t always have to launch the final super-duper version on day one.
Crowdfund the idea
This wasn’t as easy 12 years ago, but I love the idea of crowdfunding. This is effectively selling in advance. Sites like kickstarter really brought this to the masses and allows you to evaluate the idea with almost no expense or time up front.
If you are an existing retailer and gave a database of customers, you can even do this informally by sending an email and getting yay’s or nay’s before placing that purchase order.
You’ll be surprised at the results.
Give it ago with your next product launch idea!