FAKE IT TILL YOU MAKE IT! HOW TO VALIDATE YOUR NEXT (BIG) IDEA WITH A SMOKE TEST.
Launching a new product is tough: whether the story began in your startup notebook or in your product backlog as part of your corporate job.
Not only startups but also the most successful companies in the world have occasionally surprised us with product flops. Just to name one example: Facebook Home was a flash in the pan — announced and released in 2013, then discontinued only a mere few months later. With Home, Facebook tried to become the home screen for your phone that allowed you to view and post content on Facebook. It didn’t fly off the shelves for many different reasons. Having tried it myself, I think one particular reason was that it just was not built around the customer. Uninstalled.
But how can we prevent new products, services or features from failing in the market? Before spending dozens of hours and even more Euros on your next big idea, you need to validate it! Change your perspective and love your (potential) customers: not your idea. Make sure that your target group is willing to spend money on your baby. Validate it before the launch of your new product in order to avoid wasting resources. Agile thinking is what matters. Sounds logical to you? Then let’s run a “smoke test”.
WHAT IS A SMOKE TEST?
The term smoke test is derived from the field of computer programming and software testing where it is described as the subset of quick and frequent test cases to determine whether important functions of a component or system appear to be working correctly. Smoke tests are preliminary tests to reveal simple failures like “Clicking the button doesn’t do anything” which would make further immediate testing unnecessary so the development team won’t waste any time.
Let’s get out of the cellar! We are marketers and therefore, simply want to know whether our next (big) idea will make us big money. Instead of being focused on “does it work properly” we should ask ourselves “does it work at all”. The basic question is if your idea will sell or if it will simply be rejected by the consumer. Also, if you have already put in time and money into your idea, just run a smoke test to validate if you’re on the right track.
HOW IT WORKS.
These simple steps especially apply to ideas that target a B2C market.
Step 1: Define what you want to prove.
Start with a hypothesis (If I do A, I expect B.).
Example: If I can capture the email addresses of more than 5% of the visitors to my landing page, I expect it’s worth it to launch the product.
Step 2: Design an experiment.
The smoke test is designed to validate your idea, not your experiment. Try to be as lean as possible in terms of time and money invested in your experiment. Use free online mock-up tools rather than asking for support of software developers. Fake it till you make it. You don’t have to have a product ready for shipping. You want to know if there’s demand for your idea, not if your fulfillment processes will work.
Example: Create a landing page to capture the email addresses for a future release of your idea.
Step 3: Drive traffic to your experiment.
It’s obvious that your experiment can only work if you are able to drive traffic to it. The aim of your smoke test is to see if real customers are picking up your (fake) offering.
Example: If your idea aims to sell a certain product online, simply test it with a Facebook or Google Ads campaign (of course with a maximum daily budget). Make sure that you’re recruiting the right audience and that you’re generating enough traffic to your landing page to be able to make a decent decision.
Step 4: Define relevant metrics and measure them.
The most important question: How do people behave after they come in from your ad? Or do they perhaps come from somewhere else? Make sure you track each stage of the funnel and measure KPIs that relate back to the hypothesis you have defined in step one.
Example: Pay attention to the overall conversion rate of customers from landing page to completed registration, the click-through-rate for your ads on different keywords, and the bounce rate of your landing page for different keywords.
Step 5: Analyze, iterate and optimize.
Traffic is expensive. If you cannot afford enough traffic to make your smoke test become statistically relevant, that’s not an issue. Because also in case of a statistically relevant number of test cases, the results only show you a tendency not a law.
So even more important is to A/B test your idea. Try different landing pages, different value propositions, different price points and also different product feature sets to see whether this makes a difference to your conversion rates.
Most importantly, if you’re getting reasonable conversion rates simply include a CTA asking your customers for their email addresses or even more binding for their payment details, e.g. their credit card number. If you still see them converting, your product is about to solve a real problem of real customers. If your conversion rate drops to zero you should continue iterating before giving up on your idea completely.
Step 6: Make a decision.
The iteration loop of step five could go on for ages. Set a test period for your experiment and stick to this timeframe. Make a decent decision based on your test findings. Make it or leave it.
No matter if your idea turned out to be top or flop, the result of your smoke test is always positive because you didn’t waste time and money. Especially after realizing that your idea was not flying off the shelves, you have learned a lot about your customers. Can you imagine a better starting point for your next big idea?
CONCLUSION
Don’t be afraid of disappointing some potential customers by not being able to fulfill the offer that you were making. If some people take you up on the (fake) offer and you are unbale to fulfill it, simply send them a personal apology. If you get tons of people converting, you can probably turn your idea into a business. Positive side effect: customers who left their email can be contacted again as soon as you’re launching your idea.
I’ve taken the smoke test route both in a corporate environment and within a startup accelerator. In both cases it was an eye-opening journey. Smoking seriously harms you. But always bear in mind that not smoke testing before launching a new product might be even more risky, at least for your mental health.
