Quick Initial Testing of your Startup Idea

In my own career, I learned the hard way that building an unvalidated idea can be a very expensive mistake. The underlying philosophy of the Launch Path is that your chances of success will dramatically improve if you test and validate your assumptions at every stage, using the Customer Development process we will discuss in Week 2.

But how do you so some quick testing at this very early stage? Or maybe you have a couple different startup ideas, how do you decide which one to go all-in on?

Fortunately, there are incredibly powerful tools and processes available so you can do some quick validation right now, before you even start down the rest of the Launch Path.

Start with Dr. Google and Mr. ChatGPT.
You will learn a lot by Googling around for a couple hours. You’ll probably discover competitors you don’t know about (don’t worry, this is a good sign!), and maybe you’ll find discussion threads on Reddit or a Facebook group around something related to your idea. Read product reviews. As you’re Googling around you may also discover previous failed companies with a similar idea. Again, this isn’t necessarily discouraging, but we’d like to try to understand why they failed. Is the website for a failed company now gone? No problem. You can probably time travel using the Wayback Machine at archive.org – they have snapshots of 833 billion websites of the past! 

Now, make sure demand exists.
The leading case of startup death is lack of market demand. Fortunately, Google search traffic is a pretty good proxy for market demand, and that data is readily available. Use free tools such as Google Keyword Planner, Moz, Semrush, Ubersuggest, or Ahrefs to see what search traffic exists for people who may be looking to solve the problem your startup idea addresses. Google Trends is also a great source of free information on consumer search trends. Again, we’re looking for evidence that consumers are looking to solve the problem your startup idea solves.

Your friends are great, but don’t ask them.
All of us tend to socialize ideas with our friends, but for this process you won’t really get meaningful data that way. It’s too small a sample size, and they are biased. I had a student once who told me he had “thoroughly tested” his startup idea by texting the idea to 10 friends and 9 of them thought it was awesome. Friends are a great source of personal affirmation but not a very good source of objective data on your startup idea.

For a B2B idea, LinkedIn can be your friend.
Will your target customer be Vice Presidents of Marketing for mid-size industrial companies in the Northeast region? By using LinkedIn Sales Navigator, you can find people who fit this exact profile! Reach out to ten of them and ask if you can have a short call to get their insights (make sure you’re clear that you’re not selling anything). Have a relaxed conversation in which you try to understand their world and the problems they face. Do not bias the conversation by telling them all about your specific startup idea! You’re looking for the sort of insights that come from an organic discussion. Now, talk to some more people who fit your prospective customer profile. You want to hear at least twenty percent of them say they have the problem you’ve articulated.

Landing pages are easy and powerful.
With a tool like Unbounce or Squarespace, you can build a “Coming Soon” landing page for your startup idea in about ten minutes and slap an email signup box front and center. Then spend fifty dollars on Facebook/Instagram ads that click through to your landing page. From this modest investment you’ll be able to:

• Begin to learn what your cost-per-click will be for online ads.
• See the demographics of who clicks on your ads.
• Discover the conversion ratio on how many people actually submit their email.
• Reach out to people who signed up to learn about why they are interested.

To get all that for fifty dollars is pretty remarkable. Back in the day you’d have to hire a market research firm to get data like this.

Ready for the next level?
Submit your proposed product to Product Hunt and see how many upvotes you get. Offer pre-sales on Kickstarter (this is how Peloton proved demand). Run some more Facebook/IG ads and maybe some A/B testing of the headlines. The idea is to learn as much as you possibly can before you start actually building the product.

The bottom line is simply that most startups fail due to lack of market demand. Investors know this, and they tend to avoid investing in startups with unproven demand. Every passionate entrepreneur is sure their idea will be an awesome success, but the really great entrepreneurs combine passion with data by spending the time to test and validate their startup ideas. As legendary Silicon Valley startup founder and venture capitalist Marc Andreessen says, “If you come in with a theory, a plan, and no data, you’re just one in a thousand.” 

Startups don’t usually fail because of competition, but they do fail because founders don’t spend enough time gathering data, validating their ideas, and learning about customers. Fortunately, there are many tools to help you start gathering data long before you actually start building a company. 

Competition can be addressed, but a lack of demand is hard to fix. So let’s get as much information as we can about current demand before we start building our startup.