9 Surefire Market Testing Strategies; Young Entrepreneurs Share Their Secrets

April 16, 2013

9:00 am

The following answers are provided by the Young Entrepreneur Council (YEC), 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.

This week, Tech Cocktail asked the YEC’ers, “Can you give a successful example of testing your market before launching an idea?“.  Below are their responses.  Enjoy!

1. A Short Survey for a Long-Term Idea

Before participating in Startup Weekend Portland 2012, I put out a Wufoo survey to get customer validation for my idea. I wanted to build a web application for Pinterest users who had trouble finding and buying products they liked on Pinterest. Over 100 users answered our 3-question survey, and we found out that there was huge need for the application, but that they would prefer a bookmarklet for Pinterest instead of a plugin. The simple Wufoo survey helped us validate a need, changed our structure and gave us great ammunition for the panel of VCs and investors. I am convinced that the data we showed the judges from the survey was the major reason we won Startup Weekend and are still working on our business today.

– Vanessa Van Edwards, Author and Techpreneur at Science of People

2. Can You Make a Sale?

Get somebody to pay you something for your idea. Before we launched Zapier we had a dozen people pay us $100 for the promise of Zapier. We knew it was a good idea because people were willing to pay and fork over money up front for what at the time was essentially vapor ware.

– Wade Foster, Co-founder at Zapier

3. Ask, Get Commitments, Then Build

Actually, just last month we successfully tested a market opportunity before launching the idea. Here’s what we did: We sent a single email to our newsletter list, asking if anybody would be interested in a 4-week SEO class, without giving much info. We sent out a short “teaser” email and asked people to reply if interested. Within a few hours we had lots of replies. To each reply, we sent a longer email detailing what would be in the class, along with a link to place a 10% deposit. Within 24 hours, we had our first handful of paying customers. And based on that initial response, we decided to go forward with creating that class — and we’ve decided that this is how we will pre-launch all of our new classes going forward. And I recommend you do something similar in your business!

Pete Kennedy, Co-Founder and Managing Partner at Main Street ROI

4. Measure Interest Levels With Landing Pages

At VoiceBunny, we have a long queue of new features and services we’d like to offer. Well before we start coding them, we build a landing page for each that makes it look as if the service is ready. When people click on a button stating they want to start using it, we tell them it’s in the private beta stage, but they’re welcome to apply for access with their email addresses. This allows us to measure the interest level, take questions from potential clients, and prioritize which features and services should be developed first, if ever.

– Alexander Torrenegra, Co-founder at VoiceBunny

5. Develop a Free Pilot First

We run a physical school, so it can be more difficult to pilot classes before making them real. However, for our HTML & CSS class, we did just that. We introduced the class as a free weekly workshop to gauge demand, and after the first class we had 35 people jam-packed into a tiny room! After that, we realized that this was something we could make into an official offering.

Mike McGee, Co-Founder at The Starter League

6. Use Google AdWords Ads

With a small investment in Google AdWords ads, you can quickly test several different ideas. For example, one of our private clients wasn’t sure if it was worth the investment to translate a product to Spanish. We set up an AdWords search campaign on relevant Spanish keywords and quickly saw demand was very high. So we paused the ads, translated the product, and then resumed the advertising campaign targeting our new Spanish-speaking market.

– Phil Frost, Co-Founder and Managing Partner at Main Street ROI

7. Allow Pre-Orders

If you’re testing and a potential customer says he’d buy your product, close the deal – allow pre-orders. To test at scale, develop a product/service that solves a problem and requires capital; put it up on Kickstarter. Guarantee donors a copy when it’s built. If people donate, you have a market.

Matt Wilson, Co-founder at Under30Media

8. Hire Your Users — Literally

At Go Overseas, we decided early on we wanted to hire our users. Community is huge for us, and we needed to listen to our users and have our ears perpetually on the ground. We didn’t want to lose sight of serving our users, so we decided to hire them. Currently, four of our employees were hired when we identified them as brand evangelists. They are our internal testers. At times, we’ll be tempted to focus on profits at the expense of user functionality. That approach is inevitably failed by our internal “testers.” With this team in place, we can quickly test new ideas and push them live as soon as we receive internal approval. We also keep a list of active users to serve as a first line of testers.

Mitch Gordon, CEO/ Co-Founder at Go Overseas

9. Don’t Bite Off More Than You Can Chew

As a software-based business, we have a module now in our system that allows us to do A/B testing. We take a series of 10 to 12 customers out of 800 to see if our service has had an actual ROI. Did it move the needle? Did this version do a better job? Were they happy with it? At that point, we can evaluate and scale it out from 10 to 25 and then from 25 to 35. Whenever you are testing your market, don’t try to bite off more than you can chew. You don’t know what the blowback might be.

Adam DeGraide, CEO and Founder at Astonish

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When Zach Davis isn't getting lost in the mountains, he is hustling from Boulder, CO as Tech Cocktail's Director of Marketing. He is the author of Appalachian Trials, a book chronicling the mindset necessary for thru-hiking all 2,181 miles of the Appalachian Trail, a feat he accomplished in 2011. Zach is a green tea enthusiast, die-hard Chicago sports fan, and avid concert-goer. Follow Zach on Twitter: @zrdavis.

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