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A 3-step Process to Test your Startup Idea

Over a Weekend and for Under $1000

Ryan Metzger
Jul 14, 2017 · 8 min read

1. Begin with Face-to-Face Conversations.

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Why —

At this point your idea is largely in your head. Prospective customers can’t get inside there, so it’s important to start sharing your idea to see what people think about it.

How to do it —

Start by getting to know the person you’re speaking with and the kind of solutions they currently use in the space. It’s important to establish trust so they will be honest in their feedback on your idea.

What you can learn —

You will likely get a mix of reactions from people after describing your product.

Cost =

< $200 for possible incentives; free if you can find people out in the wild

2. Next Put into Context with Quantitative Surveys.

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Why

Here you are trying to understand a broader market response to your idea as well as the segments most excited about it. This builds upon what you’ve learned from step #1 and helps you understand how large the audience for your product could be.

How to do it —

Again I urge you to go beyond your immediate network to get unbiased feedback from strangers. I’ve run many quantitative concept tests using Survey Monkey’s Audience product.

What you can learn —

Total Addressable Market (TAM) is a key question investors will ask about your idea and quantitative surveys are a good way to find that out.

Cost =

$300 for 200 untargeted responses. Goes up with narrower audience or if looking for more people.

3. Lastly, see if People Act Through Targeted Ads.

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Why —

A prospect telling you they are interested in a new product is quite different from buying it. Without a working a product you can’t get that far, but you can get close by serving ads to prospects and seeing if they are willing to take further action like signing up for a waiting list.

How to do it

It’s important to start market testing ads by considering the type of go-to-market your product is likely to use. If it’s something where people are already searching for solutions, then search is a great place to start and you can test demand on Google AdWords.

What you can learn —

Ideally you will get a sense for customer acquisition costs and can do so by dividing your cost per signup by an assumption of the % that will become customers. You will also learn which type of creative works the best.

Word-of-mouth can be a great tailwind for consumer businesses and this type of activity is a good sign that might take place.

Cost =

$500. This should get you close to 50k impressions depending on the demand for the market to reach your audience. Shoot for a 1% click through rate and a 15% signup rate. Some ad platforms also offer credit to get started that would offset some of this cost.

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Startup Grind

Stories, tips, and learnings from and for startups around…

Ryan Metzger

Written by

CEO, co-founder @getridwell. Prev @MadronaVentures, @zulily. Fan of Northwestern, the Seahawks, and any news on the return of the Sonics.

Startup Grind

Stories, tips, and learnings from and for startups around the world. Welcoming submissions re: startup education, tech trends, product, design, hiring, growth, investing, and more. Interested in submitting? Visit our submission form here: https://airtable.com/shrShpeN89HrzCzOB

Ryan Metzger

Written by

CEO, co-founder @getridwell. Prev @MadronaVentures, @zulily. Fan of Northwestern, the Seahawks, and any news on the return of the Sonics.

Startup Grind

Stories, tips, and learnings from and for startups around the world. Welcoming submissions re: startup education, tech trends, product, design, hiring, growth, investing, and more. Interested in submitting? Visit our submission form here: https://airtable.com/shrShpeN89HrzCzOB

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