Reach out to your potential customers.
Realistically, you shouldn’t write a single line of code without getting a real understanding of your customers’ needs. You don’t need to be a geek to get real customer insights. Actually, it might help you because there is no danger of you to geek out at your customers.
When you contact your potential customers find out the following:
- What are the challenges your technology solves?
- Is there a real problem or are you creating a solution to a problem that doesn’t exist?
- Would they pay for it and how much? The only real proof that they will pay for your technology is to pre-sell. Most companies don’t do this and it is one of the reasons they fail.
Validate your business idea.
Before you even think about building anything test your business idea. A great way to do this is to set up a landing page and drive some traffic to it. It is easy to create a landing page without doing any coding. You can use third party tools like Unbounce or LeadPages. You can pay for traffic on Facebook, forums, or some other social network and measure the number of signups. This way you can quickly figure out you cost of getting a new customer.
Here is how to validate your business idea:
- Talk to people about your business idea. It is a huge mistake to treat your idea as a secret. Go out there and share it will people. Pay attention to how people react to your idea.
- According to Travis Steffen, a serial entrepreneur who scaled and sold 6 tech companies, your idea must come from the customer, not you. He also argues that you only have a valid business idea if you can profitably market it.
- Find competing products. Yes, every business has competition. Competition is a good thing because it proves that there is a market for your product. If you are creating a specialty software for a specific industry, make sure that there are competing software products on the market. Your job is to create a better version of what is already out there on the market.
- Listen to what your customers are telling you. When I started my web design business I did not want to offer web hosting. After my customers had asked for years, I stop resisting and now we offer hosting. Many times your market will tell you what you need to sell them, but you have to be willing to listen.
- Create a simplified version of your product or a minimum viable product as Eric Ries tells you in The Lean Startup.
- Pre-sell (More on that later.)
- If you have a product, try crowd funding. Crowdfunding offers a great way to finance and validate your product at the same time.
Build a mockup.
Again, you don’t need to code. You can do this with a piece of paper and pencil. Create a wireframe. To get more sophisticated you can use some image editor or higher someone to do it for you. The important thing here is to develop a tool to demonstrate your idea. You will need this when you talk to prospects, investors, potential team members or co-founders.
The proof is in the sales. If you can pre-sell it will be easier, to find a co-founder, more customers, and investors. You can’t argue with sales. If you have a viable business idea and you have done your customer research, you should be able to pre-sell.
Take the following steps to pre-sell your product or service:
- Pre-sell to at least 5-10 customers. You won’t get rich, but it will give you some level of validation.
- Give people a significant discount for buying early. Never offer a lifetime discounted prices because it might become impossible down the road. Instead, offer discounts for the next 1 to 2 years.
- Limit the period of time customers can pre-order and receive the discounted pricing.
- Limit the number of customers who can pre-order from your business.
- Show social proof as you pre-sell. Quote, influencers and customers who already bought. Show the excitement about your products.
- Give a little extra to those who pre-ordered. It can be something as simple as a t-shirt.