Top 5 reasons why you’d be insane not to market test
This is the first in a series of articles about market testing. The series will include practical tools and techniques on how to market test your business idea. Today I list the top 5 reasons why market testing is a vital first step in any Internet project.
Do you have an Internet business idea you are thinking of starting up? Here are the top 5 reasons why it is absolutely critical to conduct market testing before you take the idea into full product development.
1. You will limit your risk
How confident are you in your idea? Willing to bet 10 or 20 thousand on it? Or maybe 500 to 1000 hours of your own time?
Why would you gamble when, for a very small investment, you can test to a high degree of accuracy whether your venture will be a winner?
To ram this point home I’ll use an analogy – would you choose to buy a $10 lottery ticket or a 10 cent report telling you whether that lottery ticket will win the jackpot?
2. You will find out about your market
Smart market testing will help you to identify a wealth of information about your target market. The types of information you can gather include:
- Market size
- Browsing habits and key phrase usage
- Potential conversion rates
- Competition strength
3. You will understand your customer’s pain points and motivation
For this reason alone you’d be insane not to market test. Knowledge of your customer, their needs, pain points and motivations must be a thread that runs through your entire project from product design and development through to positioning and other marketing activities.
Ultimately, developing a product or service that meets an acute market need is virtually guaranteed to be a runaway success.
4. You will make money and build assets before you’ve even started!
Certain types of market testing will generate income or help you to build Internet assets such as lists and traffic.
Imagine generating an income through market testing that helps to fund product development! This scenario is quite achievable.
5. You will be able to effectively prioritise
In all likelihood you have at least a dozen ideas in your queue vying for attention. From all those great ideas which one do you choose to work on? Why not market test several ideas and then focus on the one that produces the best results?
Market testing will also help you to effectively pipeline your projects. Have some business ideas in the market testing phase while others are in product development. This is a great way to accelerate your asset building.
I hope this top 5 list has convinced you that market testing is a must in your Internet business. Stay tuned for the next articles in this series.
All the best
Nathan Curtis
A Niche Hunter’s Tool
I wrote in a previous post about a few different approaches to finding a strong niche. What each of these approaches have in common is that they typically start with an idea generation session.
Despite some well documented tools and websites to help with this process (inc Google Trends, Technorati Popular, Google Groups) it can still be difficult knowing where to start.
To help with my own idea generation I have put together a mind map of high level topics and general areas of interest. In my process I use this mind map as a starting point to get me thinking very broadly about what is out there. From there I pick a topic that catches my eye and I start to conduct some light research on the level of activity around the topic and what people are talking about.
You can view the mind map here:
I have used Mindomo - which is a very good free web based mind map tool.
You are welcome to edit and extend the mind map. It is a WIP and is by no means complete. You’ll need to set up a free account with Mindomo to edit.
Happy niche hunting!
Nathan Curtis
Finding your niche – science or religion?
In this post I will discuss two common approaches to finding a profitable niche. I’ll also describe a hybrid that can leverage the benefits of both these approaches.
An interesting discussion arouse recently on Brian Clark’s Teaching Sells forum regarding how best to choose a niche or topic. In this case the discussion was around choosing a niche for a subscription based learning site product. Many of the participants in the Teaching Sells program have been struggling with this fundamental first step.
Judging by comments in forums across the Internet, this is a fairly common problem. And it is a nasty one because it often leaves newbies paralysed before they have even started.
Seems there are two opposing schools of thought. I’ll describe each in the following sections.
Faith – Go With Your Heart
The advice from many commentators when choosing a niche is to “go with your heart.” Choose something that you are passionate about and typically have some level of expertise in.
There are a number of benefits of this approach. They include:
- You care. Your passion and enthusiasm for the niche will shine through in the quality of your product and your marketing effort.
- You’ll be motivated. Your enthusiasm for the niche will keep you going through the tough times. After all, you will probably have some involvement in the niche even if you weren’t marketing to it.
- You are the market. You have deep insights into the niche because the niche is you. Armed with pre-existing knowledge you will have a good chance of knowing what people need and how you can engage them.
- You have expertise. If you are passionate about a niche then you will probably have some level of expertise in it. This will give you a head start in developing a high quality product.
- You may have pre-eminence. You may be a household name in the niche community. This status will increase the perceived value of your product and will be a great marketing angle.
The benefits listed above present a strong case for “going with your heart” when choosing a niche.
Now let’s look at the other common approach.
Science – the Cold, Hard Facts
In the other corner we have the scientists – the niche hunters. Niche hunters use tools and techniques to identify markets where there is an imbalance in supply and demand. A pain point or need that is not being fully serviced by the market place. Once found, the niche hunter will develop one or more products to exploit the opportunity.
Typically the niche hunter will be less interested in the subject matter and more interested in the process and in business in general.
The benefits of this approach are:
- You have processes in place that limit risk. Niche hunting is all about testing markets for viability before you commit significant resources to product development.
- You will not be wedded to a topic or idea. You take an unemotional view of the niche. If research and testing points to a dud then you will move on and look for another opportunity.
- Your approach will be reproducible. You have a defined process in place for how to find and service a niche. You will be able to run the process (or preferably outsource it) over and over to develop a profitable portfolio of products.
- You will realistically evaluate potential sales and profits. Your market testing will provide you with reliable metrics that will enable you to predict your upside gain.
What’s Your Playground – a Hybrid Approach
Clearly there are benefits of each approach and I believe in many cases a hybrid is the most appropriate option.
Let me introduce the concept of a playground. A playground is a broad area or topic that particularly interests you. Go with your heart – think about the things you are really interested in or enjoy doing. These are your playgrounds.
Examples of playgrounds might be:
- Crafts
- Information marketing
- Parenting
- Sailing
You will likely have a few playgrounds but I recommend the solo-preneur chooses only one to focus their business around.
Within any playground there will be hundreds, if not thousands, of profitable niches waiting to be serviced.
So the next step in a hybrid approach is to put on your niche hunter’s hat and get researching! Use the tools and techniques I will be discussing in this blog to find and test profitable niches within your playground using very little money and effort.
Once you have identified a profitable niche you can use all your passion and energy for the topic to develop and sell a remarkable product.
Happy hunting!
All the best,
Nathan Curtis
Your new business idea sucks
The idea rush
You’re an entrepreneur. You have great ideas. Probably on a daily basis.
There’s nothing like the rush of excitement when one pops into your head.
Quick as a flash you decide on domain names, product development plans and launch strategies. Humungous profits are but a few weeks away.
Well, just hold on there, cowboy!
Before you get to work you’ll do well to ask yourself one simple question: “Who cares?”
Product for Market or Market for Product?
Ever wondered why most Internet business ventures fail? There are many reasons but a major one is that a lot of businesses are founded entirely on an idea for a product or service.
That statement sounds a bit strange.
After all, what’s wrong with kicking off a business that turns your great idea into a hot new product? Well, the problem is that you’ll then have to go hunting for people that actually need it and are prepared to part with their cash to own it. This is considerably more difficult than developing a product specifically to meet an identified market need.
Let me emphasis this point:
- Finding or generating a market need for a product is extremely difficult
- Developing a product to meet an identified market need is easy
But some ideas go nuts
Right now you are probably thinking “What about websites like MySpace, HotOrNot, and YouTube? They started life as great ideas that were turned into wildly successful services.”
Well, sadly these services and others like them are but a tiny exception to the rule. In fact they perpetuate misconceptions like “all you need is a good idea” and “build it and they will come.”
For every YouTube there are a thousand ipartees perpetually languishing in Beta.
It’s like investing vs speculation. While speculatively floating an idea can be a valid model, you wouldn’t want to bet your entire business on it.
Where the smart money goes
Smart entrepreneurs focus on finding a group of people with a problem to solve. They take the time to understand the customer, their pain points and their motivations.
Only when they have this understanding do they turn their attention to developing a product that meets the specific need.
Product ideation and development is moved way down the business process.
This is a sure fire way of ensuring that someone cares about your product.
For the incurable ideas-man
Most entrepreneurs are incurable ideas-men (or women) so much of the advice in this article will be hard to swallow.
If you are committed to generating product ideas rather than finding customers with a problem to solve then market testing and prototyping is a very smart move.
Testing will go a long way to minimizing your financial risk, wasted effort, and will help you to avoid global mockery.
All the best,
Nathan Curtis
Welcome to E-Business-Lab
My name is Nathan Curtis. I am an Internet Marketer and Niche Hunter.
I have created this blog to provide information and resources to help answer the most common and most important question in Internet business – Will my idea be a success?
I hope to get a great dialog going in the areas of business ideation, market research and testing.
I’d love you to join me in this journey.