It’s to figure out whether your idea for a startup is the “right” one. If you’re on the verge of starting a business, chances are you’re starting with a few (or dozens of) viable ideas, and weeding the list down to one is a daunting task.
Of course, I don’t have a magic formula for figuring out the answer, but there a few things I’ve observed that I think one can do to help increase the odds for success:
Ask Yourself
I think the best idea is one where you can answer honestly that you’ll use the product yourself (and if you’ll charge for your product, that you’d pay for it). Don’t answer this as a hypothetical “you” in an alternate universe — ask whether you would buy this product today to solve specific problems you currently have.
Similarly, if you’re in a role where you’re frequently asked to make product recommendations or buying decisions for other parties — ask yourself whether this is what you would select for your client.
This certainly isn’t the only criteria to test whether or not an idea has a chance for success, but it leads to a well-established pattern: 37signals created Basecamp so they could manage their projects, FreshBooks was created so they could invoice their clients, MailChimp was created so they could send email campaigns for their clients, and I created FormSpring because I had to build online forms for my clients.
Ask Others
Neil Patel’s advice is to quit asking people what they think and just start implementing. He’s right — most people won’t really know whether your idea will work or not. And those close to you are apt to try to make you feel good by saying your idea is the best thing they’ve ever heard, even if it sucks.
However, I still think you can get a lot of value by talking to people you know that fit your target market to get a sense for whether or not the problem you’re trying to solve actually exists. Focus your discussion on the problem you’re solving, rather than your idea itself. Most people will open up truthfully about how painful a particular problem is for them, and you might get a sense for why existing companies aren’t already solving that problem.
Ask Your Market
Finally, before you spend time and money building out your idea, test it out to see whether a market for your product really exists, and gauge how hard it will be to generate leads and sales. Launch a fake AdWords campaign, as Eric Ries describes here — something that you can do quickly for less than $50. Unless you’re launching rockets, it’s probably going to be much harder to get enough customers to spend money on your product than it will be for someone to actually build it.
Note: this post is an expansion of a response I posted here. Head there if you’d like to read other answers to the same question.
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Last week 37signals launched Haystack, a directory for finding web designers. I don’t have a strong opinion about the site itself one way or the other, but upon it’s launch I couldn’t get this thought out of my mind: 37signals could start selling boxes of sh*t and people would buy them.
(By the way, if you’re in the market for that kind of thing, a service for you already exists).
I’m not saying that 37signals products aren’t great in their own right — I’ve used, purchased and recommended many of their products and services — I’m saying that they’ve built up an incredible platform that increases their odds for success hundredfold, almost regardless of the product. And that’s what I admire the most about them.
Basecamp was making $5k/mo just six weeks after it’s launch, something few startups will come anywhere close to replicating (considering it was their first product and probably had an average customer spend of about $30/mo). Subsequent product launches did even better, and they appear to see similar success with their book and job board.
Hundreds of companies launch better products and do “all the right things”, yet hardly get off the ground, much less thrive. There’s just an incredible advantage when you launch products targeted at the very people that are already listening to you, especially when there are hundreds of thousands of thousands of said people.
I believe they’ve had to work incredibly hard to build that audience — nobody’s just given that kind of attention and respect. And they’ve also done a tremendous job of not disappointing their audience (as some have done).
So what does this mean for us mere mortals — those of us who measure our FeedBurner stats in units of tens or hundreds? Once you realize that you’re not 37signals, it’s important to emulate the right things. Recognizing what makes companies like 37signals successful means that you don’t emulate things they do that might be wrong for you. You might need to offer phone support for your customers, accept checks, or focus on just one project instead of 7.
The corollary of this is that you shouldn’t believe what 37signals tells you to do. Listen to them frequently, but put what they say into context. Much of what they say is probably good advice, but there’s no good way to differentiate what works to make them successful from what works because they’re successful.
Of course, this certainly holds true for anyone you’re listening to. Listen to me least of all.
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