TFT: Selling Before You Build

What Customer Validation will Teach You Before You Build

TFT: Selling Before You Build

Subtitle: What Customer Validation will Teach You Before You Build

In today’s world often founders focus on having a great product which is an important part of starting a company for sure. The challenge comes when you spend all your time on the product and not enough time on your testing the market to make sure that customers actually want what you will be selling. For software you can reach create beta versions and give people early access to try it and provide software. For physical products you can build prototypes and do field trials. No matter what you are building or creating you need to make sure that you engage with the customers before you finalize the product. Before you sink your life-savings into this venture, make sure there is a market ready to buy it.

Selling Before You Build

Many founders make the mistake of building a product before ensuring there’s a real market need. This post would cover how to validate an idea through pre-sales, beta users, and early customer feedback before committing time and resources to full-scale development.

Takeaways:

Test Demand Before You Launch Anything

This may seem pretty straightforward, but often we get caught up in the excitement of the ideas. We think of all the people it will help and how many millions we will have when it goes viral. The problem is we do not talk to enough people outside of our own bubble to confirm that there is a broader market need. So how do you test demand?

First you have to define the problem you are solving. Get very clear on the problem and prepare yourself to evangelize that problem. We’ve touched on this before, but fo not focus on the features or products you are creating. Focus on the problem. Once you have the problem defined, find your potential customers. Look for professional organizations that have happy hours and conferences. Maybe you do not need a ticket to the conference, but maybe you go to that city and hang out near the convention center. This will allow you to have conversations with the potential customers. Aim to engage with at least 20 potential customers at this point. You want to understand their:

• Pain points with the problem

• Motivations for solving the problem

• Current solutions, or work arounds for the problem

Some problems have a very high value for a solution and some are very low. Make sure you know where your solution fits. So define your problem and then find potential customers to pitch that problem to. Then you will have an idea of the true market need for your solution.

Pre-sales Strategies, Find the Early Adopters

Once you have confirmation from your testing that there is a need get a good solid minimum viable product. What do we mean by that? What is be simple solution you can provide at minimum cost. This is your beta version of the code or application. It may only be web-based, or only on iOS at this point, but you have to start somewhere. For physical products this is small production run. Maybe just a model depending on how big the product is. The key here is you want to build some hype now. You know the market needs your solution to solve a problem and you want to start engaging with those early adopters. When you are conducting your training keep an eye out for those early adopters. Maybe they have tried to solved the problem themselves. Maybe they just like trying new apps and technologies. Stay in touch with them and keep them posted on the beta launch. You will want these folks to help you generate revenue early in the process so you can fund your product runs. These are also the customers that are going to give you feedback on the first edition of your product. They will help you improve your product for the next round.

You can also consider services like kickstarter at this point. They will help you generate that revenue for the first round of product as well. It is not a bad approach at this point either. The key here is you want to start to get people excited about what you have to offer. So get a product to the early adopters and ask for feedback. Then ask them to help you build the hype for the next round. Do not be afraid to ask them to pay for the service or product either at this point. Yes it is a minimum viable product, but it had value to them so ask for some of that value. These will also help you set your pricing for the production run because the early adopters can give you feedback on your pricing as well.

Is the Market Really There?

This is another critical time for your future company. Now that you tested the market and brought a prototype to market and got some feedback what is the market telling you? What are your financials telling you? Can you build a business on this? Keep in mind that sometimes a solution is just a side hustle, or maybe it really belongs as a piece of a larger companies solution. Think about Slack. They had a great product, but being part of a platform like Salesforce probably helped them grow and innovate a lot better. Take a moment to pause and reflect on the feedback from your minimum viable product. Ask yourself some questions:

• Did the early adopters like the product?

• Did it solve the problem?

• Was it profitable?

• Could it be profitable?

  • Keep in mind that some trial runs will not be profitable, but you have to make money at some point.

• Is this a long term play? we build this into something huge.

• Or should we be looking to get acquired?

  • If this is the case know your target acquirers.

Taking a moment to reflect at this point will save you months of pain and suffering and lots of money. It may be that the market is really not there and you need to focus on something else. Ask mentors and others in the industry if you are unsure. The key is you want to make sure that you stay honest about the potential. Have you found the market for your solution? Do you need to adjust? Do not just blindly go on production assuming the market is there because you found early adopters. There are always small groups of people that will try anything…once. That does not mean you have a viable product.

Action Step

Take 30 mins this week. Review your ideas for new products. Do you have a solid problem statement for them? If not work on that. If you do find 10 early adopters you can contact to test the market. Reach out and see if they see the same problem you want to solve. Now you know if you need a minimum viable product.

Additional Readings

“How to Validate Your Startup Idea” by Todd Jackson

“$10,000 in 24 Hours by Pre-Selling Our Product Before We Built It” by Videofruit

“6 Techniques to Validate a Startup Idea” by CPrime

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