Everyone has ideas. Most people don't take any action on their ideas. But if you are serious about starting your own business, the first step takes just 5 minutes. And no, it's not to incorporate, or patent, or even find a cofounder. The first step is cheaper, easier, will make a bigger business impact, and something you can do at your computer right now. The first step is to prove people will pay for your solution before you even start!
Here are the 4 steps to test any business idea online. This technique works for any business--digital, physical, or services.
1. Set up a landing page experiment
You might think of a landing page as the traditional "coming soon" page with email capture, but a landing page experiment has a few different characteristics.
First, and most importantly, the page needs to include a price point. This price point is the test for how valuable your target customers consider your solution. Is it valuable enough for them to acknowledge the price tag and click through?
The price you set at this point does not have to be the actual price you intend to charge, but should be credible enough. You can also split test your pricing to see which converts higher.
Second, the landing page should imply that the product already exists. Use calls-to-action like "Buy now for $10″ or "Find a petsitter for $20." If your solution is free, test if the visitor will take an action and give up something of value to use your service. CTAs like "Download on the App Store," "Submit your portfolio," or "Connect with Facebook" work well. Include a section to feature the main benefits or explain how it works. Finish with a friendly customer testimonial to build trust.
Here's an example of an effective landing page experiment. Attach a form to collect customer data after they click through. You can use QuickMVP to set up landing page experiments.
2. Define success
Let's say you got 97 signups after a week. Is that good sign or bad? There's no way to tell unless you set your success metric up front. What's the weakest result you need to get to proceed with your idea?
You can base your success metric on a variety of factors. Consider factors like opportunity cost of starting a business, development costs, or business KPIs. How many sign ups do you need at the price point you've set to generate enough revenue? Define what success looks like before you run your experiment. Plenty of entrepreneurs limp along with zombie startups, pursuing results that still aren't enough to sustain their companies. Don't be one of them.
3. Get in front of customers
As soon as your page is ready, get it in front of the right customers. Google Adwords is a great way to get targeted traffic quickly, but the interface is too cumbersome for rapid testing. So QuickMVP has made it super simple to launch a Google ad in just 2 minutes. To make the most of Adwords, choose specific keywords or phrases that match the text in your ad copy and landing page, rather than broad generic words.
4. Follow up
Once the experiment is over, analyze the data. Did you get more signups than expected? Fewer? None? Be sure to follow up with those who signed up and interview them about their needs and expectations. Gauge their enthusiasm. Use their insights to determine if your idea has struck a chord. Weigh the customer acquisition costs against your potential revenue and adjust your experiment to improve results if needed.
If you didn't get any interest, you just saved yourself from wasting months and thousands of dollars building something no one would've wanted. Go ahead and test another idea.