I don’t lack business ideas. I’m known to pepper my friends with, “What if you could just…” or “Wouldn’t it be great if…” so often that they’ve learned to just sort of nod and tune me out when I get started.
It’s become a vicious cycle. First, I’ll fall in love with my latest product vision, excited about how it can ride a wave of innovation and transform the world. Next, I’ll frame out all of this product’s amazing features in my head, confident in the unique value of what I can build. Finally, I’ll try finding a domain, and then reality hits: I discover that all my domain name ideas are taken. Even worse, the domains are taken by competitors that had my exact same idea years ago, and they’ve already built out what I wanted to create, locking up many potential customers.
Deflated, I move on, until the next idea sprouts.
This haphazard approach isn’t all that bad. After all, I was still able to build and sell two companies in spite of myself.
Now, after three years of working for the company that acquired my last business, I’m starting a new entrepreneurial journey. This time, I have a better process to rapidly understand if an idea is good or not, to save time, expenses and heartache. I used this process to whittle down about 20 ideas to land on my new project. Below, I’ll share the power of the process with you.
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Step 1: Organize ideas and start researching
When I have a few new ideas, I first prioritize them by which ones I like the most. The goal here isn’t to have a perfect list, it’s just to add some order to the chaos.
Here’s my process:
- Determine how popular the idea is using an SEO keyword research tool like UberSuggest. I usually try to search one simple term or phrase that describes my idea. Then, I see how many people are searching that keyword or group of keywords per month. If the number is low (under 10K searches a month for B2C leads, 1K for B2B), that means it’s not that popular and will be hard to find customers or gain traction. If it’s more than that, great.
- Conduct keyword research: I then Google those keywords and see which companies or brands rank highly for those terms. That’s my competition. I copy five to 10 of the URLs into a spreadsheet.
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- How many people visit each of these websites per month? A tool like SimilarWeb comes in handy here.
- How many employees do they have, and have they raised money? A quick Google search should help find this.
- How differentiated is my product idea from this competitor’s? I use a one to 10 ranking scale, where 10 is very unique one is the same.
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- Examine the data: Lastly, I note some of the big data points, including:
- How many people visit each of these websites per month? A tool like SimilarWeb comes in handy here.
- How many employees do they have, and have they raised money? A quick Google search should help find this.
- How differentiated is my product idea from this competitor’s? I use a one to 10 ranking scale, where 10 is very unique one is the same.
At this point, I will have a good sense of the business opportunity (or lack thereof). I ask myself additional questions, like:
- Is this a big market?
- Are the competitors strong?
- Do I think my idea is unique enough to stand out?
If I get to this point and still feel confident in my idea, I move on to the next step.
Related: How to Validate Your Business Idea
Step 2: Get feedback
Assuming there is a big enough market, I need to figure out if people will respond to my particular idea without spending the time or money to actually build it out. The specific method I use to understand this depends on the product idea and the ability for me to collect data on it.
B2C ideas: If I can easily advertise for the product using Facebook or Google ads, I’ll put $100 toward buying Google and Facebook ads for my new product idea. Then I get a domain and use a landing page builder like Unbounce to write marketing copy and see if people click on the ads and engage with the landing page.
B2B ideas: If my idea is a B2B concept, I use LinkedIn to reach out to people who I think would be interested in the product idea. I don’t stop until I have at least 10 conversations.
And sometimes, if I need more data, I’ll combine methods to get a richer understanding of customer preferences. Then, I move on to step three…
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Step 3: Prototyping
If a product passes steps one and two, I’ll move on to prototyping. This is usually the longest part of the process and I only want to work on this if I truly believe there’s potential.
Prototyping involves using one of the many new “no code” tools out there, like Webflow, to build as much of an app as is feasibly possible. Those companies position themselves as more than just prototyping tools (you can build an entire app with them), but I’ve found that depends very much on what the application or product is.
Then, I go through step two again, but this time with the prototype. I try to see how users engage with the app prototype after finding it via an ad on Google, or via a message on LinkedIn (while painful, I try to find new LinkedIn connections in order to get unbiased data).
If there’s still potential here, I start working on an application. As a developer, I am fortunately able to oftentimes do this myself. But if the work is more complicated, all of my prior steps come in handy, as my specs are clear, I know my workflow, and I know my users.
By this point, my idea rarely looks the same as when it started. The multiple steps I’ve taken thus far end up giving me insight and shaping my product in ways that I wouldn’t have predicted. To date, this process has been serving me well, and I hope it will help you validate your next business idea (or two).
Key takeaways
When testing a startup idea, there are a few important steps you should follow:
- Conduct market diligence. Find out how many people have the problem you’re trying to solve, put together a list of competitors, and see if your idea still seems worth pursuing.
- Gather feedback. Use landing pages, paid advertising or LinkedIn outreach to collect feedback and data on your product.
- Repeat your feedback gathering steps with a deeper prototype, using one of the many prototyping tools out there. See how users respond to your features and messaging. Repeat this as often as you need until you know exactly what you want to build.
The goal of this process is to de-risk your product idea and discover if your idea truly has potential. You’ll end up saving time and money, which are both valuable resources that will be crucial once the real big idea hits.
