How To Find Out If Your New Idea Will Sell And For How Much

Most entrepreneurs are confident their new product or service idea will be a big winner. But you would like to find out if your new idea will sell and for how much before you invest lots of time and money. So, to be safe, you tell your Mom or wife about the idea and ask what she thinks. Guess what? She says it could be a great idea. She may not be sure, but she doesn’t want to hurt your feelings or dampen your enthusiasm.

Still not sure, you decide to ask more people and get additional “facts.” Again you tell them your idea and ask if they think it’s a good idea? Do they think people will buy this product or service? Not surprisingly, almost everyone agrees with your Mom. Great. Now you have the facts to validate your hypothesis.

Not All “Facts” Are True

But, there is a big problem, you don’t have real facts. The “facts” you have are only “opinions” from people who don’t want to hurt your feelings or dampen your enthusiasm. Just like your Mom, people want to be nice. Besides, they are not committed to buying it, so there is no downside for them.

If you start your business using these false facts, your chances of succeeding are slim. But, there is an answer. Rob Fitzpatrick, author, and entrepreneur, started several companies that failed using this traditional customer research. He finally realized what the problem was, and here is what he found.

Talking to potential prospects is critical, but you have to speak to them in a way that they will give you real facts, not just opinions. So the first step to getting real facts is not to tell them what your product idea is.

Don’t Talk, Listen

Set up a casual meeting or coffee, so they are comfortable. And remember, you are there to listen, not talk.

Ask them about themselves and their job. People love to talk about themselves.

During that conversation, find a way to bring up a question related to the problem you want to solve.

For example, here are some opening questions, “that part of your job sounds difficult.

Is that a big problem?” or “I’ve been told that X is a problem. Do you have that problem?”

Then based on their answer, keep probing about the problem and how they dealt with it.

This explanation is experience talking about their problem and how they handled it — this is how you get factual information rather than just opinions.

They verify if the problem exists, how painful it is, and how they dealt with the problem.

Maybe it’s a minor problem, and they have a way to deal with it now. Perhaps it’s a significant problem that is costing the company time and money.

This approach will verify if there’s a problem and if the pain is severe.

You get facts, not opinions, which will give you actionable insights.

Here are some of the problems with the traditional approach:

1. We spend too much time collecting data that’s too unreliable for important decisions.

2. Sometimes we don’t realize the data we are collecting is worthless (even misleading)

3. Asking customers what they think of your idea almost always leads to bad data.

4. We assume customer feedback is scientific, and whatever they tell us is scientific and counts as learning.

5. But, it’s easy to bias the people we are talking to. Once you tell them you have an idea, they are already biased beyond repair because they don’t want to crush your dreams,

6. If people tell you your idea is terrible, that may not be useful data either. Why? People are bad at predicting both: which ideas are good and what they,

as customers are going to do, buy, use in the future,

7. Even Venture Capital firms credited with being the best predictors are wrong more often than right.

And If their judgment is worse than a coin toss, how seriously can you take anyone’s opinion?

8. If you are going to get your “facts” faster (e.g., focus groups, surveys, etc.), it could be a big mistake.

The problem is this information is not robust enough to bet your company on it.

Get them to talk about costs

During your questioning, you will ask how they solved the problem and how expensive it is to solve the problem.

Now, you have an idea of the cost parameters to determine if the product will be profitable.

This approach does take some time as you will want to interview people until you begin to get repeated information.

However, it is less expensive than starting development and having to end the project later.

Get facts, not opinions

You can get broad industry views and some facts and figures from Google information,

but the insights you need only come from face-to-face conversations with prospects.

It’s the insights into your customers’ worldview and decision-making that tell you to build it or not.

You need real insight into what customers want.

There is also a problem if you put together a small group of people to do these interviews.

You will end up with several opinions as to what they heard and what is essential.

These variations in view make defining the most critical problems difficult.

You do need to keep everyone informed of the information.

Conclusion

You can get the real facts you need if you don’t bias the potential customer by telling them your idea.

Ask questions about a problem they might have and what they did to solve the problem.

Get them to say to you, based on their experience, the problem, and how they solve it or don’t solve it.

Also, what they currently pay to get it solved now.

At this point, you are only trying to verify that the problem you want to solve is a real problem, and the customer would be willing to pay to get it solved.

Once you have your product concept designed, the second step is to follow up with customer interviews

with your product or service design to determine your solution’s validity.

You will also ask for some commitment, not necessarily money, maybe a referral to another user in the company

to determine if the person’s positive response is factual or just being friendly.

We would love to hear your thoughts on this blog or this topic. Or a topic you would like us to discuss. You can reach us HERE.

Jim Zitek

P.S. If you know someone else that would like this information, pass it on.

If you haven’t read Part One, you need to do that before reading Part two. Part one is about how you interview people to determine if the problem you believe you are solving is really a problem people want and are willing to pay you to solve it.

So, now that you have nailed down the problem, spent time diagnosing the problem, and have an insightful product solution, it’s time to see what your potential customers think of your solution.

This second phase of questing is to validate your solution or product. It’s time to talk to people again (the same or others) to see if they agree with your solution and are willing to give you some commitment.

You will also have taken a preliminary look at your business model as part of your overall vision. You should layout the business model canvas to visually see the entire business and make changes and decisions as you develop more knowledge.

Introduce product

Now you are going to show them your product. So you are fighting the same problem as before of getting false information or compliments rather than facts. But the good news is you now have a product idea, and you can and must ask for some commitment.

At this point, your product or service can be a drawing, a slide show, a prototype, an animated whiteboard, or anything that will illustrate the product. You do not need a full-blown minimally viable product (MVP) at this time.

You will talk to people, and if they are a serious prospect — meaning you are getting real facts, not just opinions — you can go home and modify your product. Then talk to the next prospect. When your information starts to repeat, you can make that MVP.

Remember, if you are not embarrassed with your first product, you waited too long. This process should not have a firm milestone date as you will be modifying the product and your business model basically after each interview until the information repeats.

You need a commitment if you want real facts

By commitment, we mean are they showing they’re serious by giving up something they value — their time, money, or reputation.

time (maybe a longer meeting with everyone to explain the product in-depth),
reputation (referring you to someone else you should talk or
money (some step that gest them closer to purchasing)

Note; if the person remains friendly, but you realize they are not going to buy, they can give you lots of wrong signals. That’s why getting some commitment is necessary, so you have facts, not opinions.

Meetings either succeed or fail.

There is no such thing as a meeting that went well. At this point, meetings either succeed or fail. You have lost when you leave the meeting with a compliment or stalling tactic (e.g., let’s talk again after the holidays)

A meeting succeeds when it ends with a commitment to advance to the next step. Rejection is also real information. One opinion is not going to derail the company. You have to look at it as good news. Maybe your product won’t sell. If so, you have saved a lot of time and money. Not asking is a real failure. Commitment shows they care. The more they are willing to give up, the more seriously you can take what they’re saying.

Following are some examples of good and bad meetings:

“Looks great. Let me know when it launches”. (bad meeting)

“There are a couple of people I can introduce you to when you are ready” (so so meeting)

“What are the next steps” (good meeting)

“I would definitely buy that” (bad meeting)

Conclusion

Remember, You will not know if your product or service could be a winner until you’ve given them a chance to reject you. Then you will know you have real facts on which to build your business. Also, keep having meetings until you stop hearing new stuff.

Tag: Product Development