Here are two extremely cheap (read: free) ways to test ideas.
Founder of Soundwise. Host of Founders Nextdoor podcast.
FEBRUARY 21, 2017
Last night in the shower, you had an ingenious idea for a new business.
You rushed to the desk to write it down, with water still dripping down your back. Your [insert the brilliant thing] is going to change the universe! It’s time to call up investors, assemble a team and . . . stop! Stop right there!
Before plunging into execution, you should confirm you’re solving a problem and/or meeting a need that people want to pay for. (Unless you’re Beyoncé. Then you can make money selling the air you breathe.)
Idea validation should be done on both macro and micro levels. And if you do it right, you won’t need to spend your PayPal balance on any of that. Here are some extremely cheap (read: free) ways that I and other entrepreneurs I know have used to test ideas.
The macro test
Before testing the specifics of your new venture, validate the big picture first. How large is the market? Who are your potential competitors? Are you differentiated enough? Google will answer all of those questions for you.
Start by searching the keywords related to your idea in both Google search and Google Trends. For example, when I had the idea for starting Soundwise, a mobile platform for audio courses, I researched around keywords such as podcast, audiobook and e-learning. Need more keyword ideas? Sign up for Google AdWords and use the Keyword Planner tool for inspiration.
You should also Google “XYZ industry report” or “XYZ market analysis” to get stats and data about your market. Pay attention to the related search terms Google shows you at the bottom of your search result page. For more updated information, filter the search to only include results from the past year.
Think of at least one company that offers a similar product to yours. Do research on that company and on its competitors. How do you know who its competitors are? Just Google “product X versus.” The competitors’ names will pop up, as there are legions of articles written online comparing every minute detail of every product: Pepsi vs. Coke, Target vs. Amazon, chihuahua vs. chow chow . . . . How do people find time to write those? I don’t know. Ask Google.
What you want to find at this stage is not necessarily a large market size, which often comes with the side effect of competitors galore. Ideally, what you want is to be able to say yes to all of the following:
Is there an upward trend in search volume and industry growth related to your idea?
Can you find existing players in your market that are already doing well to demonstrate there’s indeed market demand?
Are there meaningful differences between what’s in the market and what you’re thinking of offering? (We don’t know that for sure yet. “Seem to be” is good enough for now).