Matt Pru is the Cofounder & Managing Partner of Stackmatix, the world’s premier growth partner for startups.
Many have heard of the concept of MVP, or minimum viable product, but it’s one thing to have heard or read about the concept, and another to put the concept into practice effectively. The acronym itself is likely flawed, as it implies that a product should be built in order to validate an idea when that is not always the case. First, demand and distribution should be validated, and then product development becomes more pertinent to understanding if the product is actually useful.
Validating A B2B Product Idea
If you are planning to sell something to other businesses, then talking to other businesses should be the key path to your process, not developing the product. Simply developing a website, deck and some additional marketing collateral is all you should need to validate if there is demand for your product, as this is how every B2B sales process starts anyway.
When it comes to reaching other businesses, there are a few key channels to test first: cold-calling, email and LinkedIn. Regardless of which you choose, your first step should be to build a list of contact information. I would recommend finding at least 50 contacts to start, then reaching out to them one by one. It can be more productive to do things in batch processes to work more efficiently.
If you’re able to generate a qualified meeting on the initial outreach of 50 contacts, then your efforts are at least average, as a 2% success rate for an initial campaign is an average starting point. The most successful campaigns will have a 10% or greater success rate, meaning you would schedule at least five meetings in the batch of 50 contacts.
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Being able to generate meetings efficiently enough validates that your messaging is resonating with your target audience. If you are not successful, trying new messaging and new contacts are your paths to pursue. Can you improve your success rate with the next 50 contacts you select? I always recommend only changing one variable at a time so you can validate if it was the messaging or the audience that led to lackluster results, though the same can be said for validating good results too.
You’ll need to be prepared for your meeting and with a good strategy in place around your messaging—after all, you don’t have a product built! You can inform the prospective customer that your product is still in beta and you are taking waitlist sign-ups, or you can be candid that you are first validating customer demand before building the product. Either way, you will need to be authentic with the fact that the product is not ready just yet.
For sales calls, a 10%-30% success rate should be your goal as this is a common win rate range for many B2B companies. Fortunately, if you’re not successful, you haven’t wasted any time building a product, and it will be a lot faster to pivot your business when pivoting involves adjusting messaging copy, your contact list and your sales deck.
Validating A B2C Business Idea
When selling to consumers, there are more options for testing—from organic social media marketing to social media advertising, paid search marketing, organic SEO, direct mail and more.
Some of the options, like digital advertising and direct mail, require financial investment to get started, so they may not be the best starting points for most. That said, these can drive quicker results, so if you have the budget, they are definitely worth testing. Plus, you’ll find that Google Ads offers promotional credit for new ad accounts, so that might be the best place to start if you’re interested in this path. Otherwise, I would highly recommend tactics that are closer to guerilla marketing in nature.
Much like B2B, establishing an online presence should be your first goal. This could be as simple as a landing page with a waitlist sign-up. You need to have a conversion goal of some sort so you can measure if there is demand, even if your product or service is not ready.
Next, I would test promoting your concept wherever you can find your audience online. Are there Facebook communities with your target audience? Subreddits? Quora questions? Social media hashtags or account tags that make sense? You need to go to your audience instead of expecting them to find you if you want to validate your idea most quickly.
SEO is one area where you may be able to get the audience to come to you if you develop a business concept that is both not competitive and has relevant search volume. Just by setting up your website and using relevant keywords in your headlines and site title, you may find that you can rank on search engines like Google and can start getting traffic for free by having the most relevant content for users of a given search.
Regardless of which of these approaches you test, the point remains the same: Attempt to validate the business idea before building the product. If you can’t inspire people to come to your site, then your marketing message or the audience you are trying to reach is likely off.
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Author: Matt Pru, Forbes Councils Member