PODCAST EPISODE TRANSCRIPT
A Tactic For Verifying A Business Idea Without An Existing Audience
The only true test of a business idea is whether anybody will buy. In this episode, I give a powerful strategy for testing out a niche and business idea… even when you don’t have an existing audience in place yet. If you execute this strategy, you’ll either save yourself a lot of time and money…
Episode #41 | Episode Date: December 20, 2014
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“The Only True Test Of A Business Idea Is Whether Anybody Will Buy”
In this episode, I give a powerful strategy for testing out a niche and business idea… even when you don’t have an existing audience in place yet. If you execute this strategy, you’ll either save yourself a lot of time and money down the road… or (if successful) you’ll give yourself a REAL foundation from which to build a very profitable blog-based business.
That last episode was a lot of fun to record because A: it is a cool topic but B: I kind of flawed here and there. 😀
Here is the thing, I am trying to do these episodes in one take. It makes for faster production, it also is a little bit more natural for me. So, if there is a screw up on these things, I am probably not going to go back and edit it right away. And that is kind of what happened with our last episode. But anyway, I thought it came out okay… “considering” 😉 Anyway, we are going to go forward here talking a little bit more about testing our business idea.
In Episode 40 we talked about the Lean Canvas and how to use it to verify a business idea and not waste a heck of a lot of time going down a path all that far when it may not have legs to begin with or possibly you need to make some adjustments there to make it truly a profitable idea. But we left that episode with this idea of…
How are you going to test out these ideas when you do not yet have a blog audience to go to?
It is definitely a limitation when you are first starting out and you do not have an existing audience that you can go to and ask them for feedback or test out an idea or test out a response.
The thing is, with the internet being what it is today, we do not need to have our own audiences already in place in order to do many of these same things.
Talk To People
I will back up just a little bit by saying you can do some testing that we talked about in the prior episode by going out and talking to people and asking them questions. In fact, this is a real good thing to do and I definitely recommend it; is to have actual conversations with people regarding the problems and the solutions and all those things that we put in the lean canvas in the last episode in series here because you can learn some of your best stuff through one-on-one conversation.
One time, I actually did some work with my audience; it’s probably some 2 years ago now, where I actually invited like ten of my best customers onto the phone and actually had a one-on-one conversation with them. It was not a paid consultation or anything like that. I did it mainly because I wanted to learn what is going on and hear it in their own words and hear voice inflections and everything.
So I only say that to say that there are a lot really valuable information and also information that will apply directly to the types of solutions and positioning that you put on your blog and the products that you are going to create by talking to people one-on-one.
But let us back up again, to talk about this idea of how we are going to test something on a little bit of a larger scale than one to one when you don’t yet have a blog audience in place….
Set Up A Squeeze Page
So, one of the ways that you can do this is by setting up a simple squeeze page; a simple landing page.
Now, a squeeze page; if you are not familiar with that terminology, it is just a page which is designed to get somebody to opt-in to an email list. And that is the single purpose of that page. It is generally going to be a headline, possibly a video, maybe a little bit of text and then an opt-in. And that’s it. There is no sidebar, no fancy stuff to get in the way. It is just an opt-in page. It is pretty much all this is.
Now, what you can do is set up an opt-in offer on a squeeze page with this very single purpose and then what you can do is go out on to areas like Facebook and actually engage in some paid traffic to send people that will be targeted to that to the squeeze page. So that is the simple idea here.
Now, what are you going to put on that squeeze page? You could put a lead magnet of some kind. This would be the idea of giving something away for free in order to get them to opt-in. But the thing is, what we really want to test here is the business idea. We really want to find out if there are legs here in terms of it being actually profitable.
Make An Offer
So here is what you can actually do to take this a step further. You can actually put an offer out there. What gets to the point better than actually making an offer? Now, in this case, it is a pre-sell. The product will not be created yet. I do not recommend that you go out and create a product before you even know if anybody wants to buy it. You want to gauge it out first.
So what I would actually recommend that you do is put an offer out there for a product that you might make for this particular market that you are looking to serve that directly addresses the problems that you put on your lean canvas with the solution that you are looking to offer to them with the Unique Value Proposition; the whole thing that we talked about in Lean Canvas.
Create a mock offer. But it is going to be real because you are actually going to collect money on that. And it could be very cheap. It does not really matter what it is. The whole idea is you want to get them to raise their hands potentially make their first sale with you.
Why go to that extent?
Well, here is the thing… People could say that they are interested all they want, but…
The only real test of interest is whether they will pull out their wallet.
It doesn’t matter if it’s a dollar. The actual action of pulling out their wallet, and even paying just a buck goes to show that they actually are interested in that solution.
And you want to give them something of value. Do not make it a total waste of time. Or you could even have the offer in such that it is kind of like almost a “kickstarter” thing. I don’t recommend that you do it on kickstarter but be very upfront in saying “I have not created this thing yet but I am looking for people to see if this is something that you would be interested in. So if you buy now for [whatever price point you think is fair] you are going to get this, this and this and I will be in direct communication with you and we will get exactly the right thing that you need and we will do it on [some timeline]” I mean, however you want to do it.
You can go and look at some of the people raising funds on kickstarter to get ideas but you apply that to your information offer that you are doing here and you create this offer page. You could use a video, it could be text only; I am not going to get into landing page mechanics all that much at this point. But you can actually test that offer by running paid traffic via Twitter, via Facebook, via a lot of social media sites.
The thing I like about advertising on social media sites is the fact that you can directly target their interests. So you can go to those customer segments that you put on your lean canvas and you can really directly target them by targeting their interest, targeting the pages that may have liked because they are interested on this thing and put your offer right in front of them and see if it bites.
See if it converts. Set a metric for it saying, “Well, if this idea has any leg, I should be able to get at least; at the top of my head, ten people to take me up on this thing. So you do it and you run it for a certain block of time. You want to send maybe a few hundred visitors into it. Maybe a couple of hundred visitors into it and see if you get 10 takes on whatever it is that you are doing.
If it is a free opt-in offer you should expect a lot higher conversion rate than that.
But if it is a paid thing, if you just look at what the average conversion rate might be on a sales letter; let’s say it 2% or 3%, see if you can get a conversion rate like that.
If you can do a little better than even that, then you might have legs there and you can say “Okay, well this thing might actually do it” you go on and create the thing if it actually wins the hypotheses; wins the test, create the thing they actually bought because now they have actually bought it.
It is going to serve them some motivation for you to actually create that thing. But it is also proven to you that there are actually legs in that business idea. Then we can start moving forward into setting up the blog around it and things like that… But you have actually got – not some passion-based blog that you are going to be looking to monetize the old fashion way down the road, and probably have a difficult time with it. You have actually got now a tried and true business idea and you have actually got some people that threw a little bit of money on the table showing that they are actually interested in this. And you did it by going at them exactly with an offer first. Not a blog post. It’s definitely a different type of transaction. Okay?
So that is the idea of how you can verify your business idea before you even have an existing audience in place.
Oh, hey… by the way, I shouldn’t go without saying… Definitely, definitely put these people on to an email list. Because when you do set up that blog, that is going to be one hell of a starting point to announce your new blog to when you have an email list.
A Basic Funnel To Test Your Business Idea
So here is a funnel that I would do at the top for my head…
Run paid traffic through a squeeze page, give them some type of highly effective, high converting lead magnet. Lead magnet would be that thing you are giving away to get them on your list. So at that point you are going to have them on your list. After they have opted in, the very first thing they get should be that product. And now, this will not be a product that exists because you have not yet created it. It is going to be a pre-sell but literally have an offer there. Make it cheap. Make it cheap enough to basically be an impulse buy but you want them to have the opportunity to put a little money on the table and vote for the fact that “Yes, I am interested in that”.
So here is the thing… you can verify your business idea because they are going to put money on the table but secondly, even then people who didn’t put money on the table, they just opted in for your free thing, you are now putting them on an email list that is targeted toward this business idea that you have. And look, when you go to start that blog, you are going to have an existing community of people to go to.
Is it worth a little bit of money upfront to pay Facebook and these guys who run a little bit of paid traffic through it? Absolutely! Because look at the value of that time that you would have wasted if you went and started up this whole business based on this little one-man idea that you have that you thought “Oh, this is going to be so awesome” but you are the only one that thought that. It would be better to spend a hundred bucks or two hundred bucks now to save yourself all that time and heartache and then to allow yourself to pip it or move in to a whole another idea than to spend a few months working on something that does not really have any legs.
So that is the way that you should look at it…
An investment into saving yourself a ton of time.
And hey, if it does work, if everything looks like it is going to work out really well; great! You just had yourself a verified business idea.
Alright, hopefully that was helpful to you. I will see you on Episode 42 of Coffee Break Blogging where we are going to be talking about a tool that I call the “Transformation Map” and how important this is. How important this is to creating content down the road for you. Okay?
I’ll see you then! 🙂