Validate your new business idea for just fifty bucks
(Note: since writing this article I have launched a new project that would make it easier for you: userinput.io. Check it out if you don’t want to fool with Mechanical Turk / surveying yourself.)
Have a great new business idea? An elegant solution that no one has thought of before? A novel approach that will make you rich? A new service that will change the world, get you mentioned above the fold in the Wall Street Journal, and make your mom proud?
I have three questions for you:
1- Will anyone really care?
2- Will anyone really want it?
3- Will anyone really pay you for it?
Don’t assume that people will want your awesome new service. You simply can’t make that assumption. You must find out if they want it.
Two options to find out if someone wants to use your service:
1- Old school method: Spend months or years and a ton of money and effort crafting the service, then bust your ass trying to get people to use your service, and see if it all works out.
2- New school method (the Lean Startup method): Spend a month or two and a little money seeing if people would really pay you. Let them just try to give you money and analyze how hard they try.
I have no interest in going with the old school method. I’m a Lean Startup kind of guy. My first startup was Anterose — Online Dating Profile Critiques and I used these methods to find out fears about online dating, and to see if people really wanted critiques of their profiles so that they could do better with online dating, and in what ways they’d want them. My new startup is TestPilot.US, which will help train pilots for FAA written exams (I’m a licensed hot air balloon pilot myself and I want this system to study for my commercial pilot license). I’ve spent $76 on that project so far, and I can tell you that student pilots not only want that service, I can also tell you what they’re willing to pay for it, and what scares them about taking tests with the FAA. That’s validation and it’s crucial.
Let’s talk about how you can validate your business idea.
Get out fifty bucks and your brilliant idea.
Step 1: Research
- Survey Monkey
- Mechanical Turk
Mechanical Turk is Amazon’s digital workforce. It’s amazing. The quality of feedback that you can get on there is quite impressive, and the care that the turkers (as they call themselves) put into these micro-jobs (AKA HITs, or Human Intelligence Tasks) is amazing. If you’re not versed with Mechanical Turk (mTurk for short), it’s a place where you can pay someone a dime to find the Twitter account, Facebook page and email address for a touring band, or pay them fifty cents to tell you what scares them most about online dating (I’ve done both these things).
In order to validate that people really want your service, you’re going to put a survey on Mechanical Turk, and request that only the people that fit your target market take it.
First, hop on over to Survey Monkey and create a survey. Oh, and it’s free to make simple ones. You’ll be limited to ten questions, but that’s plenty. Make the first page have up to nine questions, and make the second page just text that says something like “Thanks so much for taking our survey! Please enter code TESTPILOT into the HIT on mturk to show that you really took the survey.” Otherwise, you’ll occasionally get jokers who say they took the survey when they didn’t. Have them use that code to prove that they really took the survey.
I always make the surveys full of comment boxes, as I want people to be able to explain in their own words. Surveys should include questions that let you know if someone wants the solution you’re providing, what they fear about the problem you’re solving for them, and how much they would be willing to pay. You can also ask what features they would want from your system, and what the hardest thing about being a (insert profession or position here).
Bonus: You can use the fears and hindrances you discover from the surveys in your sales copy to improve conversion.
Second, you’re going to need to sign up for a Requester account with Mechanical Turk. Getting your first HIT set up can be a little confusing. My buddy Justin Wilcox wrote an article about using Mturk to do phone interviews and it has instructions for setting up this sort of HIT, as well as code that you can hack up to use for presenting your written survey link (HIT descriptions are written in HTML). Justin and I could argue for hours about whether phone or written surveys are better. Both can be very valuable, and each has its own set of negatives and positives.
When you set the title of the HIT on mTurk, you can say “Student pilots needed to take quick survey” and target exactly who you want. When researching for Anterose, I made the HIT title “Men who have trouble with online dating needed for survey.” Previously, I didn’t narrow it down, so I was paying people who do well at online dating to take surveys and basically say they’re doing just fine, thanks. That’s a waste of my time and money. I want to hear from people who need help. I want to hear from people who can benefit from my service. Figure out who would best be served by your business idea, and target them.
Once your surveys come in (and you’ll be amazed how quickly they can come in with mTurk if you use the right keywords), review all the data. If people are overall saying they don’t want your service, it’s time to think about going back to the drawing board. If 50% or more like your idea, you should probably consider pursuing it. In my initial survey, 11 out of 15 student pilots surveyed want a system like TestPilot.US, and they’d be willing to pay an average of $208 for it. So 73% of respondents are into the idea, and they want to pay more than I had planned to charge. Wonderful. Let’s move onto the next step then, but first, let’s explain the cost for the research.
Pay 20 turkers $0.50 each to take a survey, so $10.
Amazon charges 10% on top of that, or $1.
We’ve spent $11 to either validate our idea or learn we need to move on with our lives. We’ve got $39 left to build a site and get traffic to it.
Step 2: Build a website
- A domain name
- A simple site, built on a theme or something else easy
- “Buy Now” buttons on your site
- A waiting list sign up (optional but a great idea)
I always enjoy this part, building out the site. I could see TestPilot.US in my head before it was built out: background photo of an airport, simple menu, floating boxes. I even had a dream about finding the perfect theme one night. I thought about writing it all from scratch, but that didn’t seem as quick, fun, and easy as just grabbing a theme to use. I found a landing page theme I really liked for just $11 at Themeforest. It’s built on Bootstrap and it’s responsive, and ideal for this project. If you want to use the exact same theme I used, go right ahead, it’s at Themeforest — Conversion theme.
If you want to save money (that $11 could go towards paid traffic, ya know), there are free themes out there, and quite decent ones too. Try templated.co for free templates.
The hardest part for our budget (we had $39 remaining at the beginning of step 2, before we bought a theme) is finding hosting. Luckily, most hosting packages will throw in a free domain name, but you do have to pay up front for a year (or two, if you’re looking for a better deal). Everyone seems to love BlueHost, and they have packages for $6.95 a month, or sometimes as cheap as $4.95 a month. You’ll pay for the year up front, so that blows our fifty dollar budget, BUT BlueHost has a very gracious cancellation policy, so you could run this validation experiment for two months, then cancel the service, and get a pro-rated refund, meaning you’d only have spent $13.90 to have a website for two months.
Ok, so you have your domain name, and your hosting, and a lovely theme of some sort to hack up. There is one big thing you can do to further validate your business idea with your site, and that is to have Buy Now buttons, and see if anyone simply clicks on them. The pricing page on TestPilot.US has a silver plan, a gold plan, and a platinum plan, all with Buy Now buttons, and each plan’s buy button goes to its own unique page, which says basically “sorry, not available yet, but coming soon!” Why do that? Because you’re smart and you of course installed Google Analytics on your site and you can track how many people try to purchase. That’s validation. If 10 unique visitors come to your site in a day, and one person tries to buy a package, that means you could have probably really sold that service, so maybe you should actually build it out.
With Lean Startup, an attempt to purchase is validation of your idea. Payment is always validation.
Another way to validate is to have a waiting list sign up. I put Untorch on my site, and it’s a great system for this. Let customers know that your service isn’t available yet, but encourage them to sign up to get access as soon as it is. This has two purposes: see if anyone cares really AND have a list of the people who care. That way, when or if you build out the service, you will have a list of people who already expressed interest in it. There’s your initial customer base, right there in a CSV file. Booyah.
Step 3: Get traffic
Easier said than done. But don’t worry, we’ve got like $14 left.
- Reddit or Google AdWords or another cheap ad system
- Any other sort of audience
You can validate your idea with just surveys on Mechanical Turk, but you can do a lot more with a website and validation on the site, especially if you end up actually building the service out. You’re going to need to get traffic to the site.
Google AdWords is a possibility here, as you could create several different ads, and allocate a limited amount of money to each. If your service is pretty niche, your keywords may be cheap enough that you can buy a lot of clicks with your remaining fourteen bucks.
I prefer Reddit ads, however, if your niche has a subreddit. There are two large subreddits that apply to TestPilot.US, namely /r/flying and /r/aviation. Some other jerk bought up all the ad space for the next 90 days on /r/aviation, so I have put up two banner ads on /r/flying to run for about six weeks total. It’s a dollar per impression usually, so with the $14, you could buy 14,000 impressions, and if you spread that out over a few weeks, you could get quite a bit of visibility, and hopefully a decent amount of motivated traffic. I’m seeing click-thru-rates of 0.41% on one of my ads, which isn’t terrible, or a cost-per-click of $0.24. Tweak your ads using those fears you learned about in your surveys and you’ll see better results.
On the first day I had a Reddit ad running, I had four people visit my site from /r/flying. That’s not a huge amount, but two out of those four signed up for the waiting list for the service, and that’s some pretty good validation right there.
You can, of course, get some traffic without spending money, and just spending your time instead. Marketing via Twitter and Facebook can do this for you, as well as guest blogging, getting active on related message boards, and so on. Find where your target audience is, go there, and start talking.
So at this point, you’ve spent your fifty bucks. Did you validate your idea? Did you find that people just loved your idea for a service that has cats call your family members on their birthdays? Or did it fail in customer discovery? Did you find out that your beach kite rental service could maybe work out, or is it time to move on?
The beauty of Lean Startup is that you can test an idea for so cheap. That’s also the power of Lean Startup.
Get out there and validate. Be well.
Stuart Brent is a free range micropreneur, founder of Vacord Screen Printing (they want to make your custom t-shirts and hoodies), and Ignite Your Match (they want to tell you how to improve your online dating profile so you can find love), userinput.io (an easy way to get on demand feedback for your app, idea or website), and StartupResources.io (a list of the best tools for your Startup). When he’s not glued to his laptop, he enjoys traveling, eating sandwiches, and trying to find decent espresso throughout The South. Follow him on twitter at @vacord.
Like this article? Please follow me for future articles. And the biggest compliment is sharing this article on your social media.