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You have all have great ideas. You know those innovative business revelations that no one else has thought of or has executed on.
You know the market. You thought out your brilliant idea. Maybe you even wrote a detailed outline on how it will work.
You do a keyword analysis. You vet out your competitors. There seems to be potential...and lots of it. You quickly find a manufacturer. Not wanting to miss out on this opportunity simply due to timing. Your on to something here you tell yourself. Without a doubt in your mind you spend $300 for a few prototypes. You like them. With a quick phone call you secure an order for $15k worth of inventory. Your ready to make millions.
You receive your lot of newly polished product...scented plungers. Your site is live. Your SEM strategy is up and running smoothly prepared to spend another $1500 in ads over the next two weeks. As you wait eagerly. Eyes fixated upon your 27" dual Lenovo monitors. Minutes go by. Those minutes turn into hours. You refresh your browser like your life is depending on it waiting for those sales to rack in...but the day is coming to an end. Your 8 to 7 stodgy day job is awaiting you in the morning. Your refresh one last time and what do you see to your surprise...not a single sale. Weeks go by, each day mirroring the last. You recheck and than check again your outreach strategy. You try A/B testing. Eventually the hard work pays off you get a few sales here there...nothing to call home about but its encouraging so you keep on grinding. Within 8 months you finally brake even...well after ad spend you lost a grand or so. Now you have to decide do you restock? Knowing your execution was superb (hypothetically) you think what if there is just no product market fit. What if....no one gives a shit about scented plunges!
Moral of the story? How could this whole 8 months of time, capital, opportunity cost, etc been saved. How could he/she have tested the market before investing significant resources for little value. This goes into the whole market research step. Every entrepreneur thinks they have a great idea. However, that great idea is based off an assumption (aka a hypothesis) that may or may not be accepted by the market. Often times companies will be based off of an assumption. Although, if the idea is no good, no amount of hard work will make it better.
"Entrepreneurs tend to fall in love with their own ideas. And when they do, they easily ignore feedback from users—especially if it conflicts with their original idea. Many fall victim to the “entrepreneur illusion”: if we only work hard, we will eventually succeed. " Resource
Eric Ries, author of The Lean Start Up talks about the MVP, or "Minimal Viable Product" to test the market. However, "testing the market" will vary from industry to industry...product/service to product/service and can often be overwhelming for boot strapped entrepreneurs with little time or capital to give.
For all you successful Fastlaners out there if you read thus far how did you validate your ideas...how did you validate your assumptions?
eg. Did you use a local manufacturer with low MOQs and sell to friends and locals first. Did you create a landing page and funnel for your project that lead to an Out-of-stock or Coming Soon page. Did you use a crowdfunding site such as kick starter? Did you say screw it this has to work...and well hell it did. Was there already existing competitors and you thought I can do this so much better...let us early stage Fastlaners learn how to validate our ideas after passing MJ's commandments and before spending limited resources.
***Below are a couple graphs (RESOURCE from a Spotify case study) that represent the thought process of hedging your risk (aka work "Smarter & Harder" Approach) and validating your idea quickly and efficiently. The other graph represents what I call the "Hit or Miss" Approach. Hedging your risk allowed Spotify to succeed as a company because they were able to pivot quickly to market reactions. Ultimately Spotify perfectly followed The Lean Startup Approach to success.
****But at the end of the day, "Scared money don't make money" -Young Jeezy
You know the market. You thought out your brilliant idea. Maybe you even wrote a detailed outline on how it will work.
You do a keyword analysis. You vet out your competitors. There seems to be potential...and lots of it. You quickly find a manufacturer. Not wanting to miss out on this opportunity simply due to timing. Your on to something here you tell yourself. Without a doubt in your mind you spend $300 for a few prototypes. You like them. With a quick phone call you secure an order for $15k worth of inventory. Your ready to make millions.
You receive your lot of newly polished product...scented plungers. Your site is live. Your SEM strategy is up and running smoothly prepared to spend another $1500 in ads over the next two weeks. As you wait eagerly. Eyes fixated upon your 27" dual Lenovo monitors. Minutes go by. Those minutes turn into hours. You refresh your browser like your life is depending on it waiting for those sales to rack in...but the day is coming to an end. Your 8 to 7 stodgy day job is awaiting you in the morning. Your refresh one last time and what do you see to your surprise...not a single sale. Weeks go by, each day mirroring the last. You recheck and than check again your outreach strategy. You try A/B testing. Eventually the hard work pays off you get a few sales here there...nothing to call home about but its encouraging so you keep on grinding. Within 8 months you finally brake even...well after ad spend you lost a grand or so. Now you have to decide do you restock? Knowing your execution was superb (hypothetically) you think what if there is just no product market fit. What if....no one gives a shit about scented plunges!
Moral of the story? How could this whole 8 months of time, capital, opportunity cost, etc been saved. How could he/she have tested the market before investing significant resources for little value. This goes into the whole market research step. Every entrepreneur thinks they have a great idea. However, that great idea is based off an assumption (aka a hypothesis) that may or may not be accepted by the market. Often times companies will be based off of an assumption. Although, if the idea is no good, no amount of hard work will make it better.
"Entrepreneurs tend to fall in love with their own ideas. And when they do, they easily ignore feedback from users—especially if it conflicts with their original idea. Many fall victim to the “entrepreneur illusion”: if we only work hard, we will eventually succeed. " Resource
Eric Ries, author of The Lean Start Up talks about the MVP, or "Minimal Viable Product" to test the market. However, "testing the market" will vary from industry to industry...product/service to product/service and can often be overwhelming for boot strapped entrepreneurs with little time or capital to give.
For all you successful Fastlaners out there if you read thus far how did you validate your ideas...how did you validate your assumptions?
eg. Did you use a local manufacturer with low MOQs and sell to friends and locals first. Did you create a landing page and funnel for your project that lead to an Out-of-stock or Coming Soon page. Did you use a crowdfunding site such as kick starter? Did you say screw it this has to work...and well hell it did. Was there already existing competitors and you thought I can do this so much better...let us early stage Fastlaners learn how to validate our ideas after passing MJ's commandments and before spending limited resources.
***Below are a couple graphs (RESOURCE from a Spotify case study) that represent the thought process of hedging your risk (aka work "Smarter & Harder" Approach) and validating your idea quickly and efficiently. The other graph represents what I call the "Hit or Miss" Approach. Hedging your risk allowed Spotify to succeed as a company because they were able to pivot quickly to market reactions. Ultimately Spotify perfectly followed The Lean Startup Approach to success.
****But at the end of the day, "Scared money don't make money" -Young Jeezy
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