Too often I see first time founders spending days or even weeks on their new logo. I get it. It’s a fun task and something about seeing your kickass new idea in lights feels good. It’s just not a priority at this stage. Doing business idea research before you dive in head first will definitely save you a lot of time and money and I’m excited to talk about some tips that will help out 🙂
I don’t want to come across as a killjoy but from the moment you embark on your new venture, you will have many many obstacles to overcome and designing a pretty logo is the least of your worries. Sure, you might need a semi-decent logo to validate your business idea but it doesn’t have to take more than 20 minutes. In this article, I will show you how to effectively invest your precious time so you can make the most impactful decisions possible.
Validation 1: Speak to customers to validate (or invalidate) the problem
Founders should be focussing their energy on this question above all else. After all, what use is a snazzy logo when your product doesn’t create any value for people? This task takes time, patience and the willingness to take tough feedback onboard without letting your personal bias cloud your judgment. It’s easy to assume that your product is going to sell just because you might need it personally. Getting out there and speaking to your target customers is going to teach you a bunch of things you didn’t know and by keeping your target customer close, you are more likely to build something they need.
If you can, try meeting or calling at least 10 people in your target market and do you best to avoid leading questions like “would you buy this?” or “Do you think it’s a good idea?”. Human nature will kick in and most people would answer ‘yes’ to these questions which aren’t helpful to you at all. Instead, ask open-ended questions about the customer’s experiences like “how do you accomplish this task?” or “Please tell me about the last time you did this”. Questions like this are more likely to unearth valuable insights that you can dig deeper on.
Doing qualitative and quantitative research go hand-in-hand so try to conduct both forms of research if you can. Data can unearth an interesting trend or signal whilst qualitative research can explain why it’s happening. Tools like Typeform make it really easy to put together a survey and for qualitative research, I just use Skype or Google hangouts.
Consider this your business idea research phase and if you find that people aren’t fussed about the problem you thought was a pain, that’s a great thing! You’ve just saved yourself a ton of time. You can now invest that back into the next idea 🙂
Validation 2: Do people get their credit cards out for it?
Seeing a customer successfully complete the ‘credit card moment’ with your product feels amazing. Comments like ‘oo I’d use that’ or ‘That’s a great idea’ don’t really mean anything until someone whips out their card to solve a problem in their lives. You certainly don’t need a fantastic logo at this point but if you need ‘something’ just hit up one of the many freelance sites out there or knock one up with an online logo maker.
If you don’t yet have a working product and just want to find out if your idea is ‘payment-worthy’ you can take the vaporware approach and set up a landing page using something like Instapage. This app lets you create a slick looking one-page website with a pre-order form that takes people’s credit card details. It might feel sneaky but this way you are doing business idea research ‘in the wild’ and always refund people if things don’t work out.
Another approach for validating your product is the ‘concierge MVP‘. I love this! I first read about it in the book ‘Lean Customer Development’ by Cindy Alvarez and have used it successfully for startups I’ve worked with in the past. It basically consists of a landing page that promises an automated service that is, in fact, you doing those tasks manually behind the scenes. One example of this could be a restaurant suggestion service. The user arrives on your landing page and inputs “Best restaurants in Bristol”. You then get the request and google this yourself and send the results back to the customer.
If you execute this well, the customer is none the wiser and might get out their credit card. Regardless of the outcome, you will save a lot of money and time that you might have wasted on a product nobody wants to pay for.
Validation 3: Can this business scale?
Once you start making some sales it’s important to keep a close eye on the data so you can understand how your customers behave and in doing so, get a better idea of where your business might be in 6 months. If it’s a subscription business how long are people sticking around on your app? It would be a red flag to see a trend with customers signing up for a paid trial then requesting a refund after 2 weeks. There are lots of important metrics to follow depending on the type of business idea research you are doing. With these kinds of figures, you can paint a picture of the future and use this traction to convince investors to part with their capital (if needed). It’s also very important to understand your marketplace and how big the opportunity is. Small markets could still make you a decent living but that might be it.
- Forget the logo at first. Focus on deeply understanding the problem you want to solve.
- Once you have a clearer picture of your solution, see if someone will get out their credit card to use it
- Learn from your product data + the marketplace you operate in so you can better envision the potential of your business
By going through these 3 phases of validation you will learn a lot about your customers and their needs. If you do find that you can’t get past phase one with your idea, maybe it’s time to go back to the drawing board. This isn’t a bad thing and if anything, you could consider it a lucky escape. With most business being online these days and the huge range of free-cheap research resources at our disposal, it’s the best possible time to be an entrepreneur!
Let me know how you get on! I’m always keen to learn from your experiences and riff on ideas with new people 🙂