4 Low-Cost Ways to Measure Market Demand
KEVIN COLLERAN: There is that magical “a ha” moment when you have an idea for a new product or service so brilliant that it is truly your mission to turn the idea into a reality (and yes, hopefully make a fortune).Yet an “a ha” moment doesn’t quantify a market. So how do you show the world—and more specifically, investors—the market’s demand?
At this stage of the business planning process, the majority of entrepreneurs will seek to determine the overall market size and specific market demand for their business idea. Unfortunately, traditional market research methods are both expensive and time consuming—luxuries few entrepreneurs have.
However, social media and other technologies provide free resources for entrepreneurs to roughly gauge market size and consumer interest quickly and efficiently. In an effort to illustrate this, I posted this week’s Accelerator question on Facebook … and within hours had dozens of responses from entrepreneurial friends who have faced the barrier of measuring market size and customer demand for their own business ventures.
Suggestions:
1. Fake it … An online façade of a company can be created overnight (long before the product or service is ever developed), allowing immediate feedback from the target consumer. You can quickly utilize ads on Google and Facebook and word-of-mouth to start recruiting potential consumers to give product feedback, place pre-orders, sign up for a mailing list, or be placed on a wait list to be notified when the product is launched. Services like Kickstarter involve your end-consumers in the development process and help grow an active customer base earlier than ever before. The investment community will give money to a company that has shown proven market demand by collecting pre-orders or signups from real consumers.
2. Leverage your online and offline networks … Between Twitter, Facebook and real life, you have a significant sampling of friends, family, acquaintances and followers who could all be potential customers willing to offer feedback. As one friend recommended, though, you may not want to tell certain ones the idea is yours, so that you don’t get polite, sugar-coated feedback from those who ultimately mean well.
3. Search the Web … Seems obvious, but many potential entrepreneurs don’t search for market data or surveys that may already exist on your desired topic/industry. A few quick searches could either justify (or kill) the market opportunity for your idea. Through searches you may also find other businesses in the same industry that could provide a strong indication of the market opportunity.
4. Listen … When you have that “a ha” idea, sometimes it’s hard to think beyond it. Yet many of the most successful companies in the world originally started with a very different product or focus. Remain flexible and open-minded enough to allow others (especially potential customers) to influence your product development even if it means radical change.
The Wall Street Journal
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