You have a business idea that you feel has tremendous potential. You probably got the insight by solving a problem that you had. Brilliant. Most successful companies today were created because of this very insight.
To give you an example, YouTube was founded by Chad Hurley, Steve Chen, and Jawed Karim, who were all early employees of PayPal. According to an oft-cited story, Hurley and Chen developed the idea for YouTube during the early months of 2005, after they had experienced difficulty sharing videos that had been shot at a dinner party.
When you’re solving your own problem or one that you feel is the pain point of a certain target audience, how do you know whether there is a large enough pool of people that face the same problems or challenges that you are trying to solve? If you’re just selling a product, you’re better off creating it and getting it to the market. But if you want to build a business out of it, you need to have a sizeable market for scalability.
So the question is how do you determine the market demand for your startup idea? Read on for several ways to get the answers you need.
Yes, it can be as simple as looking it up on Google. Haven’t you heard that Google is God? It has most of the answers that you are looking for. So how do you get Google to help you? Use the Google Adwords keyword tool to look for the number of people seeking out what you’re trying to do.
Put the keyword(s) in the search box, select the target country or countries and Google will show you the number of average local and global monthly searches. This is a good indicator of demand.
Minimum Viable Product
“Market research and business planning are overrated. The best market research is putting a product out and seeing if people will buy it. The best business plan is to create something great and sell it fast,” says Guy Kawasaki.
Writing a business plan with projections through market research is a sure-shot way to a startup doomsday. Nothing beats an actual customer using your product or service. So how do you get to the customer when you’re at the idea stage and don’t want to spend a huge sum building something they might not want?
Build a minimum viable product or a prototype. The idea is to put out something that offers the core value or your startup or that solves the core problem of your customers.
The MVP could be a PowerPoint slide, a dialogue box or just a landing page. This is something that you can often build it in a day or a week. A prototype can be an actual functioning product with the core features offered.
Share this with your network and see the response. Are people excited to use it? Do they actually feel their needs or problems are resolved by using your product? Is it easy to use?
You don’t have a product yet but still want to get customer buy-ins? Then landing pages are your best friend. Create a teaser or promotional landing page, which highlights the core proposition of your startup.
Ask for their email addresses in return for an offer or simply to be updated about when the startup is launched. Here’s a great example of a landing page that does just that. The number of email subscribers will determine how many people are interested in your startup. Try using Launchrock to create your landing page. Or use KickoffLabs.
To increase traffic, one method is to create a Google Adwords and a Facebook marketing campaign. Point the adverts to this landing page to drive traffic. Use Google Search and Network Partners to spread the campaign among a huge number of people.
You would much rather spend a little money to be sure than spend fortunes building a product that customers don’t want.
Crowdfunding is an excellent means to get actual buy-in for your product. This concept has increasingly becoming popular with the likes of Kickstarter, RocketHub, Indiegogo launching their platforms on the Internet that bring together startups looking for funding and individuals who are interested in contributing towards an idea or a product.
Apart from securing funding for your startup, you also get to know how many people are actually interested in your product or service. Interested enough to pledge their money. Here’s a list that showcases the most funded projects.
Whatever be your path, make sure you build on something that your customers want. As Kawasaki puts it, “This isn’t rocket science. It’s mostly hard work and luck.”
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.