So you have come up with the next Google/Facebook/Mint website and you think you are going to make a fortune on it?
Maybe you will, but if you are a wise entrepreneur you will test out your business idea first. Why?
- After four years, 50% of startups have failed
- After ten years, 75% of startups have failed
- Only 1 in a 1000 startups are a home run like Amazon or Microsoft
Testing your business idea before dedicating your nest egg and years of sweat, blood and tears to it is ABSOLUTELY necessary!
What is the mandatory best way to test your business idea? Find your customers. Your idea may sound good to you and your drinking buddies and coworkers, but the only people who’s opinion really matters are the people who will fork over hard cash to you. The best way to find out is try selling it directly to them, face-to-face. You may not have your product built yet, but make a presentation as if you do and go and ask someone to give you money for it. If they disagree, ask them why not and find out what problem they actually want you to solve. If they do agree, then you win! Tell them you are still in development and will make sure they get your first shipment out.
If you are selling a product or you have software you would like to try selling, test it out with a fake website.
How to test your business idea online:
- Build a fake 3 page website containing a landing page, a signup page and a thank you but we’re sorry page.
- Install Google Analytics on it.
- Run a Google Adwords campaign trying to drive a few hundred people to it.
- When the customer arrives, if they don’t like the product/service, they will leave. If they signup, you have a strong indicator they are interested. Send these people on to the “thank you but we’re sorry” page and tell them you will contact them as soon as your product is ready.
- Watch your conversion rates and then base your decision on whether or not to build a real website upon what people do.
- Iterate, reiterate and keep changing it up and testing things out.
As long as you keep testing & trying different ideas and don’t get super attached to one, you will eventually hit on a good business idea.