Building something and waiting for “them” to come is a quick way to lose your money. (Check out our post on “100 Ways to Lose Money Quickly”)… Just kidding.
Seriously though, an idea may sound great in your head, but you need to take into consideration the distorting factors at play, whether it be your passion for the topic or a skewed optimization bias that obscures potential barriers.
The only way to really test the viability of a business idea is to expose it to the world, preferably your target demographic, and assess market demand.
So to save you some time and money, here are 5 ways to discover whether your wonderful idea is the path to riches or a needless siphon on your wallet.
1. Does It Solve a Problem?
Fundamentally, demand is created by need, and need is created by a problem or barrier. So, an easy way to assess whether there will be demand for your idea to ask yourself whether or not it solves a problem. If there’s a clear barrier that comes to mind, then you may be on to something. If not, then your idea may be being amplified by your passion, rather than pragmatic need.
2. Ask Friends and Family
Presenting to friends and family gives you a chance to refine your pitch while simultaneously gauging initial response. Sure, people may sugar-coat things to preserve your feelings, but generally with people you know well, it’s easy to discern between an authentically positive response and a canned “Oh … that’s a good idea…” that’s delivered with the enthusiasm of someone using cactus toilet paper.
3. Drop a Post in Social Media Groups
For more honest answers, try joining social media groups related to your niche. Compose a thoughtful post that objectively describes your idea, and then assess viability from the number of “likes”, as well as the comments. Peoples’ courage grows tenfold as soon as they sit behind a keyboard, so expect brutal honesty. You’ll either come out of this experience exhilarated and eager to move forward, or humbled with sufficient reason to move onto the next idea.
4. Building a Landing Page
As Godaddy says, “a website makes it real”. That may be true in some sense, but in practical terms, preemptively marketing your idea through a website is a great way to assess market demand. Since you don’t have your actual product or service prepared at this point, opt for goal conversions such as signing up for an email newsletter and/or selling pre-orders. This way, you get a gauge for demand, potentially some operating capital, and a list of interested buyers for when you are ready to roll out your idea. Be concise with your content, state your value propositions well, and invest in a small amount of social media advertising to get your site in front of objective eyeballs fast.
5. Crowd Sourcing
This is not only a great way to fund your idea, but also to assess the need for your idea. If you do get funded, then not only have you confirmed your idea’s viability, but you even have capital to launch with. You’ll need to have your ducks in a little bit more of a row than would be required by the aforementioned strategies, but as you can see, the upside is much more comprehensive. Kickstarter and IndieGogo are the major platforms that everyone knows, but more and more niche-specific crowd-sourcing ideas are popping up every year. Do a quick search to learn and decide which one best aligns with your goals.
This list isn’t the end-all-be-all, but it’s a good starting point. If you think you can make money from your idea, then by all means, go for it. And if it seems as though your idea won’t be a financial success, there’s nothing wrong with taking it on as a hobby and moving to the next thing.