You have an idea for a business! You’re eager to dive in and turn that idea into an actual product or service. But before you do, test the water. You could find yourself building something that no one wants to buy or use. Or, you might find yourself building a business you don’t want to run.
We suggest doing some upfront work on understanding your motivations, evaluating your business idea, and testing it. To get you started, we’ve outlined the process we take participants through in our Launching a Business class.
Assess Your Motivations
Building a business starts with you. It starts with your motivation to pursue the idea and take the steps to turn it into a business. As a creative person, you have no shortage of ideas. But sometimes those ideas are just passing thoughts about how you might be able to do something better and potentially make money from it. They’re not necessarily the ideas you are most passionate about pursuing. Ask yourself if you really are called to this idea. Is this an idea you can’t not explore? If it is, how does pursuing this idea fit into your values and goals, the lifestyle you want to lead, and the impact you want to make in your community?
When you pursue an idea that is aligned with your aspirations, the process of planning and testing it feels like the structure and accountability you need to get it off the ground. When it’s not aligned, you might feel resistance to the process and can easily get demoralized by the smallest of hurdles in validating your idea. In our class, we use some simple coaching tools such as the Wheel of Life and Business Model You to support entrepreneurs in assessing how their business ideas are aligned with their personal motivations.
Understand Your Market
You may have come up with your idea because you have some experience – you studied that subject in school, you held a job in that industry, you weren’t satisfied with a product or service you were using, or you’ve seen other people struggle with finding a solution to a problem. Your experience is a great springboard to think about the problem and design a solution, but it’s not enough. Your perception of the problem and potential solution is shaped by your own needs and the experiences you have reconstructed. As a result, you may bring in your own assumptions, biases, and blind spots about your customers / users, the problem they have, and potential solutions to their problem. In order to make sure you are designing the appropriate solution, we recommend spending time researching your market. Start by suspending judgment on what you think your potential customers / users need. Get out of the building, and observe and talk with them.
We suggest conducting empathy interviews to find out more about their experiences in a particular situation, and as users of particular products, services, environments, or processes that are relevant to the exploration of your idea. As you talk with people, it’s important to not sell your idea since people are less likely to share their experiences if they feel someone is trying to sell them something. Also, talk to people you don’t already know well because your family, friends, and colleagues may be biased by their understanding of your idea and support for you. Do enough interviews and observations to give you some consistent data about the pain points of your potential customers / users, how they are trying to address those pain points, how you might be able to create a solution to address their pain points, and whether or not there are enough people with the same pain points to support the development of a business.
Put Some Details Around Your Concept
Once you’ve got an understanding of your market, it’s helpful to start thinking about how you are going to build a business that meets both their needs and your needs in a sustainable way. This is where some planning comes in. Don’t worry – I’m not going to recommend you write a business plan. At least not yet. At this point, you don’t have enough information to make the process of writing a business plan worthwhile. However, with the information from your market research, you can put together some details around your business concept.
To create a simple and concise summary of your business concept, we recommend using the Business Model Canvas. This one-pager helps you organize your thoughts around how your business idea may be able to create, deliver, and receive value. The canvas prompts you to describe all the key aspects of your concept – what you are going to build, what makes your solution unique, who you think the customers / users are, where you will get the word out, how you will interact with customers / users, and what resources and partners you may need to do everything. It also gets you thinking about how you will generate income and what expenses you might incur as you develop the business. The format of this tool makes it easy to iterate on your thoughts as you are testing your idea. Later on, you can use it as the basis for developing a more detailed business plan.
Build It Lean
With some basic details in place, you’ll be in a position to start building something. Right now, you might be thinking that building out the entire solution will take months or years with all the features you found your customers / users want. We encourage you to follow the lean startup methodology in building your product or service. This is a framework that enables you to shorten the product or service development cycle, get it into the hands of your customers / users, and learn what works and discard what doesn’t.
At the heart of the lean methodology is your minimum viable product, or MVP. This is the smallest, least time and resource intensive thing you can do or build that will demonstrate the value of your business idea. The focus is on demonstrating the core features of what you plan to build, testing your hypothesis about the solution design, and generating early interest in your business. Your MVP can be the most basic version of your product, service, or experience, or it can just be a simple website or video that explains how the product, service, or experience will work. Regardless of how you build your MVP, you should set a trial period and goals that determine the success of the trial, as well as establish a means for collecting and reporting data that will enable you to assess interest in the solution, marketing channels, pricing, and community impact.
Create Your Website
It may not feel comfortable to have a website out there with just your idea. You may have some concerns about having ideas stolen, not having everything perfect before launching it, or not knowing how to code a website. But to gather the information you need to validate your idea, you need to show people your MVP. Your website is a great place to show or describe your MVP and gauge interest by collecting data on how many people view the website, what pages they are viewing, how long they are viewing them, etc.
These days you don’t have to know how to code to publish a website for your business idea. There are free and low cost options available through WordPress, Wix, Weebly, Squarespace, Strikingly, among others. All these platforms have nice templates that are easy to use and allow you to create a website quickly. Once you have your website up, follow the platform’s directions on how to hook it up to Google Analytics so that you can start to get data on traffic to, and user behavior on, the site.
Get Out There
Don’t make the mistake of putting an MVP and website out there and not marketing it. You need to be out there marketing to generate interest in the MVP, get feedback on it, and build a following. When you get the word out, you might also start finding some early evangelists of your business – these are people who love your idea so much, they are willing to try your product or service in its earliest stages and tell their networks how much they love it. Your early evangelists can help lower your marketing costs when you launch your product or service beyond the MVP stage.
That being said, you don’t want to spend a lot of money on marketing at this stage. Focus your efforts on where you know, from your market research, your potential customer / user spends time trying to find solutions to this problem. These should be some of the marketing channels you test during the MVP trial. But before you dive into them, look at the relative costs of each marketing method. Start by testing the relatively free methods, such as word of mouth, before spending little amounts of money testing the paid methods, such as online advertising. Be sure to track the data from your marketing efforts.
Once your MVP trial period is over, it’s time to analyze all the data. Start by looking at the efficacy of your data.
- Was your trial period long enough to have reliable data to evaluate viability?
- Did you stick with the same MVP the whole time or did you pivot (which may skew the data)?
- Did you do enough marketing?
If the data is reliable, you can answer some basic questions about the viability of your business concept.
- How much interest did you generate? And from what channels?
- What was potential customer / user feedback on the proposed core features of the product or service?
- What was feedback on pricing? How did the results compare to your goals?
Equally as important as evaluating the results of the MVP, is assessing how you feel about pursuing the idea further. Is this still the thing you can’t not do?
After answering all these questions, you’re ready to make an informed decision on the next step of developing your business.