Case Study: How To Validate A 6-Figure Business In Just 2 Weeks With $200
The strategy behind business validation is different for each business. However, I do think there’s a lot to learn in regards to how Justin Mares validated his 6-Figure “Bone Broth” business, Kettle & Fire
Justin took a very “80/20” approach to validating his business. Before he invested too much time and money, he wanted to answer two questions:
- How many people want your product?
- Will they spend enough on the product that you can start a meaningful business?
By doing so, Justin validated his e-commerce business with just $200 and 2 weeks of his time.
For the full step-by-step guide, check out the article: 80/20 Validation: The Cheap And Fast Way To Prove A Business
Or, just continue reading for an in-depth summary.
The best form of validation is when a prospect actually has to pull out their credit card, put in the information, and give you money. Justin validated his business by getting pre-orders to a product he didn’t even have yet.
To find out the answer to: “How Many People Want My Product”
Justin put the keyword “bone broth” into Google Trends:
Right away, that caught Justin’s interest and gave him enough information to continue digging. So the next step was looking on Google’s Keyword Planner for the same “bone broth” keyword.
Awesome! That’s another good sign!
Justin then scoured forums/reddit posts and comments to see what type of questions people were asking. After making notes of all the relevant topics, Justin started to see a trend of people asking for bone broth recipes and where to buy it.
Bingo! People in “superfood/vegan” type communities were actually ASKING where they could buy bone broth.
That’s the first question answered, several thousand people were actively looking for a product like this!
Now Justin had to find out if people are actually willing to pay enough for this product to make it a meaningful business. To answer this, Justin set up a super simple landing page and hooked it up to his personal PayPal account.
He used Unbounce to set up a very simple landing page, and paid someone on Fiverr to design the logo. Here’s what the first version of his site looked like.
Keep in mind you don’t need to be an amazing web developer or graphic designer. There are plenty of “drag-and-drop” website builders you can use to make a somewhat professional looking website. What matters the most is writing an effective headline, and having well written copy to communicate your value proposition.
Once Justin had his website designed, he connected the “Order Bone Broth Now!” button directed to his personal pay-pal account so people could send him money (he didn’t need to set up SSL certificate or integrate Stripe)
You’re probably thinking, isn’t this super ghetto?
Well yes, you’re right. It is…but it works! Remember, this is an 80/20 approach and your #1 goal is to validate your business, not to optimize your conversions.
Once he had the website setup, the main thing to do was to drive traffic to the website. he did this using…
Bing Ads.
Before you start laughing at Justin, bing ads are very effective in testing ideas because it’s way cheaper than Google Adwords.
He only had spend $50 on a few ads and it resulted in 7814 visitors.
The best thing?
30% of them would actually click the “Order Now” button.
Now since the PayPal checkout was so ghetto, only a small percentage of those people who clicked the “order now” button actually ended up giving Justin money.
But it was enough to validate the idea. Over the course of two weeks, Justin made over 20 preorders and made more than $500 from preorders.
He confirmed that people were willing to pay him money. Once he had a list of pre-orders, he sent an email letting people know that the product wasn’t ready.
The good thing about this, is that there are no downsides to this approach.
If for some reason Justin wasn’t able to full-fill the orders, all he had to do was give a full refund.
But Justin achieved his main goal of validating his business. He got people to actually pay him money, even though he didn’t even have a product ready. He didn’t even know where he was going to source his product!
Only once Justin validated his business, did he start to put in more time and money to build a legitimate landing page, create well-designed checkout process (instead of Paypal) and a full fledge user acquisition strategy.
The Final Results?
He validated his business and 5 months later, it’s already made 6-figures in revenue. Not bad for just two weeks and $200 to validate the whole business!
Check out Justin’s bone broth business by going to his website: Kettle and Fire
Want more?
For a more detailed explanation of how Justin validated his business, check it out here: 80/20 Validation: The Cheap and Fast Way to Prove a Business
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