HOW I LEARNED TO GROW UP ABOUT BUSINESS
I’ve always believed I had a good gut, a good intuition.
That I could go with what I felt was right and it would lead me to make good decisions.
Sometimes it did. Sometimes . . . not so much.
Over time, I’ve learned that I can listen to my gut, my intuition, and I can go with what feels right. But I still have to back up every idea, every revelation, every new dream or strategy with data, with metrics. I have to back up my ideas with facts.
Remember the famous Ronald Reagan quote about the Soviet Union in the 1980’s, “Trust, but verify?”
Well I’ve modified his quote a little (because you know, I play fast and loose with famous people’s quotes). I say, “Trust, but verify in your work life! Trust your gut, but verify with metrics. “
So how does this translate to business?
Today I’m going to help you entrepreneurs validate your business ideas by giving you my-
Top Ten Ways Entrepreneurs Can Validate Their Business Ideas
1. Does this business model currently exist?
A word of warning, if there are very few businesses doing what you hope to do, it should be a red flag. More often than not, it means other businesses have realized they cannot make money doing what you’re thinking of doing. Test your ideas well.
In your head it might have sounded like, “This is awesome. NO one else is doing this! We should totally go for it. We’ll make millions!”
But unless you’ve done your homework, don’t ride off into the snow on your ponies. Just sayin’
2. Does it have a clear defined route to making money?
Yes. This matters. It’s difficult to raise money for a start-up that doesn’t prove the clear route to make money.
And let’s just say for the sake of argument that you don’t need financial backing to get started. If you cannot clearly define (and I mean clearly) how you will make money at this, then it is not wise for you to follow this dream. If you don’t need to make money at this venture, then it’s a hobby, not a business, and you should treat it as such. But if it’s a business, then it’s going to need to make money, and you need to know in advance how that is going to happen.
3. Use Facebook to test your market size.
Say you wanted to start an organic gardening center in Nashville, but you aren’t sure of how to see what the size for interested people is?
I used the ad manager to select people in Nashville who are interested in gardening between the ages of 25-60.
That’s 44K people right there. I’d say that’s a market.
(If you want to know more about using Facebook ads, then I’d recommend taking an online course. I’m a fan of paying for the information I need that will help me run a successful business.)
4. Does it fill a hole in the market?
If you know the market is there and your idea is sound, you have to ask yourself if you can fill a need. Think about what makes you unique, and the special spin you put on your business that sets it apart.
Ask yourself this question, “What is unique about me and my business idea that sets me apart from the other businesses like mine?”
Can’t answer this question? Then you’ll likely get lost in a sea of other people who are already meeting the need your business aims to supply.
5. Have you ripped your idea up and it survived?
You are most likely going to love your idea. Once you put some legs on it, and it gets going in your head, it’s difficult to shut it down. But you can’t afford to be married to your idea right away. You have to rip it to shreds, and then IF it survives, proceed.
“Ideas are meant to be attacked, torn apart, and put back together again. You may well want to shield your idea from the harsh sunlight at first, but by the time it’s ready to meet the world, it should also be ready for rain or shine.”
6. Hire an (expert) brain to pick
Find an expert in the area in which you hope to build your business. Want to make handmade grass skirts? Want to launch an online business?
Hire a strategist to give you honest feedback, rip your idea apart and look for any holes you do not see yet. I have worked with so many clients who end up thanking me (after they’ve called me a few names!) for helping them see that their ideas just weren’t ready for the light of day.
It will hurt, but it will be worth it. Hire a brain to pick.
7. Hold a focus group
A focus group is a group of people who would likely be your potential customers. You can find them any place you connect with people. (Social Media, book clubs, small groups, business networks, etc.)
Note- Do not use your friends or family for this unless they are people who would be in your potential customer base (and even then, use them sparingly) It’s impossible for your friends and family to give unbiased feedback.
8. Have you floated the concept or idea on Social networks to see if you get a response?
Test it in a Linkedin group, see if your post gets any likes on Facebook or RTs on Twitter.
Quora is my favorite Social Network because it is built around ideas vs. relationships. You can follow topics and learn from experts.
See what experts say about your ideas in Quora and you will have a great start.
Maybe you’re saying, “But Alli. I don’t want to put my idea “out there.” Someone might steal it!” Well, I never worry about putting my ideas out there, nothing is new under the sun. It’s not the idea, it’s the execution of the idea.
Ideas are plentiful, an idea means very little in this world, what matters is building and scaling and persevering.
9. Use Adwords
Build a quick and easy landing page for your business idea and then buy different versions of keywords from Google Adwords.
Have an email signup box to test how interested the potential customers are in your idea. If you get a lot of sign ups, you know you’re on to something. One of the best case studies on this method is AppSumo (finish this post, then come back and click on this link. It’s awesome!)
More of a visual learner? Check out how Dropbox did it in the beginning using Google Adwords!
10. Try a Feedback Service
With the rise of online businesses, more and more entrepreneurs are using feedback services to help them test their ideas.
Hype An Idea is a platform built especially for promising entrepreneurs. Hype An Idea allows you to connect directly with other entrepreneurs and discuss, develop, innovate and share so that even the smallest idea can evolve into something really, really, big.
If you’re like me, and you have grown-up responsibilities to attend to, you not only “need” to validate your ideas and stop trusting your gut, it’s your responsibility to do so.
How are you/have you validated your business ideas before launching?
P.S.- Here’s an example of how I’m floating an idea- I must get 10 requests a week to do video. I want to cry when I think of trying it, but I did it. What do you think?