Always test and validate your assumptions with your customers
The reality is that no matter how well you think you know your potential customers and what they need, you can misjudge their need and end up wasting a lot of time, effort, and money.
Starting out, you will make assumptions about what your target audience will be looking for, how the product or service should work, what marketing strategy to use, which monetisation strategy will make your business sustainable, and which laws and regulations you have to comply with.
No matter how good you are, some of your assumptions will be wrong. The problem is that you really don’t know which ones are right until you test and validate.
Existing marketplaces are the ideal environment for you to test and validate your assumptions and learn about yourself. There’s no or very little entry or upfront cost for you to do so. You pay as you go. There’s little or no risk to you.
In a post-mortem of more than 100 startups, CB Insights found that the number one cause of startup failure (42% of the time) was “no market need.”[1] Many start-ups spent months or even years building a product before they found out that they were wrong in their assumptions: that someone was interested in their product or service in the first place and who are willing and able to pay for it.
Ideally, you should only invest enough time and money to test and validate your assumptions so that your product or service fully meets your customer’s needs and fully solves their problems without risking too much on your end. You are proactively managing the risk of failure, mitigating any adverse consequences to you.
More than likely, your very best idea may not be quite what people want, for whatever reason. If you’ve spent all your time and money on this one product or service idea that doesn’t quite get people to buy, your business will definitely run out of money quickly. You will be de-motivated and frustrated.
That’s a big risk that you don’t want to take, especially if you’re funding your business out of your own savings.
Alternatively, a more prudent strategy is to start off by offering a basic or ‘good enough’ version of what you think your customers may need and ask for lots of feedback from your first customers. Ask questions about the product or service and whether it’s hitting the mark from their perspective. Be open to criticism.
In getting there, you may have done some online desktop research about your product or service using Google, Google Keyword Planner, and Google Trends. You may have used these tools to form your assumptions.
Listen actively and intently to what your customers tell you about your product or service: why they bought it or didn’t, what they thought of it, what they like, and what they’d like to change. Be open to feedback and criticism. Leave your ego at home.
Write down exactly what they said the emotional words they used. These words will come in handy when you are doing your analysis, marketing, and copy writing.
Wisely use established marketplaces to test and validate your ideas
There are a lot of people out there who will tell you to develop your own website first before developing or selling your products or services. That’s before getting your product or service tested and validated with your customers. This is a flawed recommendation.
There’s no step about product creation or design. There’s no step about asking what people want or need, which is the basis of any business.
Here’s the catch. The article did promote the use of a third-party service provider who is offering a customisable website builder in exchange for a monthly fee. This is an affiliate marketing monetisation strategy adopted by the author of the article. The author will get a commission when the recommended service is purchased.
It should be noted that these recommendations most often come from people who just want to sell you their products (e.g., video editors, plug-ins, etc.) and services (e.g., website development, Facebook advertisements, search engine optimisation, blogging resources, etc.), leaving you cold in formulating and executing your strategy. Always find out the true motivation of the author when reading such articles.
Your strategy is to get the right product or service ready first for a specific group of customers who may desperately want to buy from you. Without paying customers, your website is useless.
Why get bogged down with the technicalities, headaches, and cost of building and setting up your own website when you can use established marketplaces like Fiverr, eBay, and Amazon, at least when you are first starting out, dipping your toes in the business world?
The key point is this.
Where would you go if you want to conduct an Internet search? Most likely, you will use Google to perform an Internet search for your search term.
Where would you go if you want to search for products to buy? Most likely, you will head over to eBay, Amazon, JVZoo, ClickBank.com, or even ShareASale.
Where would you go if you want to search for services to buy? Most likely, you will jump on websites like Fiverr or UpWork.
Where would you go if you want to search for videos? Most likely, you will jump on websites like YouTube.
And where would you go if you want to search for articles written by others? Most likely, you will go to websites like Ezine Articles, Medium, or Quora.
When people want something, they will naturally go to established online marketplaces to search for what they want. It could be a service, a product, or just some information. These people are already in the right frame of mind, wanting to buy something, wanting to do something. They are ready to vote with their money.
As an analogy, to catch a fish or two, you would naturally go to where schools of fish are. In doing so, it will increase your chance of catching a fish or two for yourself. Have you ever seen a person fishing at a spot where there will never be fishes swimming there?
In the retail world, you have shopping malls that will attract shoppers who will buy from one or more mall stores. The mall management will market and promote their malls and attract shoppers to the mall. Store owners need to promote their products and services to these mall shoppers who are already there. Whilst there may be window shoppers at malls, most people who visit malls will be in a buying frame of mind. There’s also the chance of converting window shoppers into buyers if the offer is good!
In the online space, you are essentially a store owner in established marketplaces like eBay or Amazon. You strategically and intentionally go to where your target customers will congregate and who are prepared to spend money on products and services. All you need to do is to focus your energy and time in serving up the right product or service that truly meets the needs of people so that they will buy from you.