How can you test business viability quickly?

Say you’ve got an idea for a new product or service, you’ve created a prototype and users reacted positively towards your concept. Now, what’s next? When creating something new, desirability (or ‘does my customer want this?’) is not your only concern. You also need to consider how you will make it work (feasibility, as we call it) and how you will make money out of it (that would be viability). You don’t want to charge forth full on or start thinking about how things will work in practice just after the first positive signs — signs that customers are interested in your concept and how it will help them solve their problems. The better route forward is to test the business viability of your idea or concept.

With business viability, you’re going a step further. You’re not only testing whether customers are interested in your product or service, but also whether they actually want to buy it (and preferably with regards to a specific price point). Why do you want to do this? Because a huge gap lies between interest in something and actually buying it.

A word of caution here, you don’t want to overdo this either… Consider the 80/20 principle: take that 20% investment of your effort and time will reach an 80% output, which indicates whether you have business viability or not. In business, you don’t need 100%. In fact, it doesn’t exist and is a fallacy. So don’t waste your time, resources, money and effort in getting that additional 20% (only bankruptcy will exist in that scenario).

How to test business viability? Here are a couple of quick tips:

1. Create a landing page

Start with a landing page that includes basic information about your idea. Choose a good header with an attractive image or video. Follow up on the header with a single sentence that explains what your product does, before elaborating on it in the copy that follows below. Don’t forget to include a Call to Action (CTA), which we’ll discuss further in the next point.

Next up are your customer’s problems. Make sure these are mentioned above ‘the fold’. The fold is the line on your browser where your screen stops and you cannot see what is below. Make it obvious for people to see that something interesting follows below the fold (unless you have quality visual storytelling skills that can capture and retain their attention).

Now it’s showtime. Explain how your product will help customers solve their problems and the main solutions it can provide. Be concise but clear, and it’s preferable to include imagery. Don’t worry about using a prototype in the visuals at this point, since you can change the imagery as you go.

Including some proof is always a great idea, especially if you are selling expensive products, Software-as-a-Service (SaaS), or selling in a B2B setting. Proof can come from a range of things: investors backing you, the technology you are using, customers that have bought (or are interested in) your product or service, social proof, quotes, team credibility, you name it. Basically, anything that says ‘trust us, we know how to do this and we won’t screw it up’.

Don’t forget to include prices so customers can estimate how much it will cost them. And if they still indicate their interest, then you’re set. You can use different tools to automatically test different pricing points. It’s also essential to monitor different pricing points as different markets can have varying prices and sometimes people are still keen to pay more. It’s important to make sure you aren’t missing out on any money, but don’t overdo it either. People will see through that and leave you hanging (or worse, they will go on social media and take you down publicly).

2. Include a Call to Action

Providing information just isn’t enough. You need to capture the intent of wanting to buy. The best way to do this is to include a Call to Action. When customers are interested in a product and are willing to pay for it, they will be keen to show that interest even if it is not available yet. You can capture this in different ways.

The easiest method is to provide a waiting list. Once launched, customers on the waiting list will get first dibs on the product. A variation is to announce a public beta, where people will be able to use and test the product for free in advance of its official launch.

Another way is to pretend that your product or service has been launched and is available for purchase. You allow customers to go through the buying process and ask them to provide credit card or other payment details. After they click ‘buy’, customers are redirected to a page explaining that although the product is not available yet, they can join a waiting list. People will undoubtedly be a bit disappointed, so offer them a discount to avoid losing them. This is as much confirmation as you can get in advance without following through on an actual transaction. The biggest risk with this method is that customers can go from actually wanting to buy from you to never wanting to deal with you again, all in the time it takes to press a button.

A third common one is to refer people to a crowdfunding campaign, such as Kickstarter, where they can back you. Depending on the number of backers, your target and the conversion rate from your website to actually backing you (which comes close to buying), you can proceed with your product or service.

A final option is to offer pre-orders. Especially if you are selling a product, offering the option to pre-order will give you some head start. You don’t necessarily have to ask for the full price, since an advance payment or down payment would be enough.

3. Keep people engaged

Keep the people who are on your waiting list, have backed you, or have pre-ordered from you interested in your product. Keep them engaged by updating them regularly. Update your landing page as soon as you have new information available, update screenshots, add feature pages, include demonstrations, etc. Provide customers with a newsletter to engage with them on recent happenings, and make sure you are on social media platforms so they can back you in front of their friends.

4. Invest gradually

Once you see the first signs of business viability, start increasing your investment gradually. Don’t go full-blown animated JavaScript website… That is not necessary and you will lose a lot of money if no one is interested in the end. Add things gradually and make it more professional. Keep your backers apprised while doing this so they can keep coming back to you. This works with more physical products as well: you can start building your storefront as you go.

5. Explainer videos

Remember what we said about not investing too much? There is one exemption: explainer videos. Explainers videos show how your product or service works. People like them because they make things more tangible, and most people prefer watching short videos to reading through a lot of text, so your conversion rates may go up.

6. Understand how people behave

An important aspect of seeking proof of business viability is convincing people that your product or service is what they need and that the price for it is more than justified. To do this, you need to understand how people behave. Some examples:

• Use your folds carefully. If people are interested in something that is sneaking up the bottom of their screen, they will keep going and scrolling.
• People are visual creatures, so make things visual for them. Visuals make things more tangible and people tend to buy things more easily if they can already see themselves using it. That’s why you can configure your car online.
• Asking for a bit of effort investment in you (but not too much) will lead to loss-aversion bias. People don’t want to lose out on these small investments and will be more likely to buy. And we’re not necessarily talking about money: providing personal details is as valuable as money.
• All good things come in threes. Yes, it’s true and it’s called anchoring. By providing two other alternatives, which are basically rip-offs compared to the go-to solution, people will gravitate towards the go-to solution. It’s also worth keeping in mind that the majority actually want to buy the most expensive product or service — always.
• Offer refunds if they are unhappy. Offering refunds provides more confidence in your product or service, and only a small percentage actually do it. Offering their money back, even if it’s after the refund deadline, is simply cheaper than investing resources into dealing with them or running the risk of having those customers complain about you on social media. In contrast, they may even praise you for offering such good service to unhappy customers.

7. Sometimes you need to take a leap of faith

Applying all these tips and tricks will improve your chances of attracting people that want to buy your product or service, and thus your business viability, but it remains a test. You won’t know anything for sure until you actually launch something. Sometimes you just need to take what you’ve got and go for it. After all, businesses are built on risks, not on safety. Entrepreneurs and intrapreneurs know this and use it to their advantage. So should you.