3 Ways to Test That Your Simple Product Idea Has Merit

Whether you’re a product manager at a multi-billion dollar company or the founder of a new startup, the earliest steps of product development start with simple customer development and proving that your concept has merit. In other words, it starts with understanding your customer’s core problem and how you can produce a solution that creates sales for you and value to your customers.

If you’re a product manager at a large company, you’ve got to prove to your superiors that your product idea has value. You need to demonstrate traction before they’ll release any more budget, giving you just enough to scrape by and pull some materials together. Lastly, customer development is probably being driven by extreme urgency, causing a rushed customer development process and a focus on the wrong metrics.

If you’re a founder, it’s likely the same just with higher personal stakes. You have to prove to yourself that you are able to demonstrate traction in the market. You want to know that this endeavor is worth your time and money, and is ultimately starting off with the greatest chance of discovering product-market fit before cash runs out.

Customer development can take many different forms, but here are 3 easy ways to ensure that your simple product idea is headed in the right direction. It’s simple…it all starts with customers.

Ask the right questions, clarify and listen closely.

Getting out of your comfort zone is difficult for most people. You have to get out of your normal routine, set up meetings with strangers, own what you don’t know and get out in front of people who may not like you… and then listen to their feedback and opinions. There’s nothing more sobering than when every assumption you’ve made to this point is proven wrong by a potential customer. But, there’s no greater learning opportunity to get your idea moving in the right direction. The best news is, you don’t need anything to get started. It costs a few coffees/lunches and your time to truly jumpstart your customer development.

So, start with an interview. Here’s a few open-ended question starters that can help you learn about your potential customer’s daily life. Remember, you want to stay away from leading questions like, “wouldn’t it be great if..”

“How…”

“What…”

“Why…”

“Tell me about a time when…”

“Describe…”

“What do you think about [blank]?”

You can continue to dive into the interviewees answers by following up with questions:

“Tell me more about that.”

“What did you do to try to solve that problem?”

“What did you mean when you said [blank]?”

“Tell me about another time that you experienced something similar.”

{Diana Kander has a great blog on this process. Check it out.}

Friends, family and co-workers are nice, NOT realistic.
Build a Customer Advisory Board

The best customer development needs to be done with zero knowledge strangers. People who don’t know you and really have no incentive to give you false positives about your idea. And even then, everyone loves a dreamer. You may still get false positives from nice people who don’t want to tell you you’re wasting your time. We suggest building a Customer Advisory Board (CAB) that you can engage on a regular basis as your create your product offering. You need a group of individuals to not only be early adopters, but who also give honest feedback on what you’re doing. This way you never lose sight of your customers’ needs. In exchange for their assistance and valuable feedback, you can show your gratitude in many ways, including free services from the company once your product launches.

Sales is the lifeblood of any company.
A letter of intent demonstrates traction.

You’d be surprised at how many people make up excuses as to why they cannot pre-sell a concept before it exists. However, it is a valid and worthwhile sales tactic. Companies old and new do it ALL THE TIME. In fact, it’s how they justify spending the big bucks to roll out new offerings to customers. A letter of intent demonstrates that the potential customer intends to become a customer if/when your product goes to market. If you can’t deliver, there’s no obligation for them to do anything and the contract is terminated. But, when you do deliver they agree to become a customer, and that’s as good as a sale. You can read all about LOI’s here.

The other reason why you want to pre-sell your product is to get better terms from financiers, banks, investors etc. At that point, you’re demonstrating serious interest in your product and not just speculation. There’s no better merit for a “non-existent” product than this type of traction. So go out there and learn how to sell your product before it’s in front of the customer. Evaluate what they require before they sign and what is optional. Then, narrow your focus to something you can deliver in 3 months.

For more on building simple products, make sure to visit: makesuccessfulapps.com & crema.us