How could you be sure that your product or idea will sell? You cannot always rely on friends and family to tell you the truth, because they might not be realistic with their assessments: either be too encouraging without considering the follies in your idea, or too scared for you to fail and lose money and resources that they could discourage you. There are many obstacles in the way to making it happen, including the facts to consider before diving all in and manufacturing your product. From our collective study of research done by Harvard Business Review, Inc., Forbes, and Entrepreneur, over 68% of product launch failures are caused by having the wrong product for the wrong market– your product might be good, but it is not matched to your market. If you are an inventor, product designer, or small business owner considering to sell a product or service, it is essential for you to know how to prove your product to market fit with market research, a/b testing and other methods to avoid the risk of product launch failure.
Listen to the podcast here
—
This is Prove It, in which we’re going to talk about how you can be sure that your idea has a market. Is your idea, product or invention any good? Deciding whether or not your product, idea or your invention is any good is a difficult thing because it’s hard to decide within yourself if it’s any good. It’s also hard to rely on your friends and family to tell you the truth because either they’re going to tell you that everything you do is great and you’re not getting a real assessment of whether or not the market will buy what you have to sell, or they’re so afraid for you that they tell you that it’s not any good when you should be going for it and taking it all the way to market. Deciding whether or not that invention, idea or your product is any good is critical for you to make sure that you’re matching the market and the product.
We did a study of all of the research out there from Harvard Business Review, Inc. Magazine, Forbes and Entrepreneur. We looked at all the failures to launch. The biggest miss is wrong product and wrong market, so a miss between the market-product fit. That has more than 56% of the failures to launch. If you can erase or minimize that 56% rate by any means, you’re going to help yourself defy the odds in product launching and make sure that it’s more successful. That’s the goal we’re trying to find out, if your product or invention is any good, is to find that fit between the market and the product.
Who’s Your Market
The first thing you have to know is who’s your market? Where are you going to sell it? What is the channel? Are you going to sell it on Amazon? Amazon is comprised of very high percentage of women buyers. If it doesn’t resonate with women then maybe that’s not the right place. If your channel or market is going to be Kickstarter, that’s 70% male. In that market, you want to make sure that you have something that is going to appeal there, that it’s a right fit.
There’s a story I tell about Kickstarter. There was this fabulous company that was making these 3D‑printed eyelash curlers. If you’re not a girl, trust me, girls use them. These eyelash curlers were great because they’re made to the shape of your eyes and they were custom-printed to do that and so they were cool and doing great, but I predicted when I saw them on Kickstarter, that they were not going to be a successfully funded Kickstarter program. Sure enough, a couple of days later, it wasn’t three or four days after the launch of their product, we saw a men’s razor that came out. This has been post Dollar Shave Club, so there was already competition in this realm. I said that this Dollar Shave Club knockoff company is going to succeed and this truly innovative, very cool, much better product of women’s eyelash curler is not going to succeed. It’s not because the product’s not any good, it’s because the fit between the market of Kickstarter and how it needs to sell there and how it needs to be funded there isn’t a match for the great features and benefits of this product. Finding that fit is so essential to determining whether or not your idea, your product, or your invention is a fit.
Market Proof: Deciding whether or not that invention, idea or your product is any good is critical for you to make sure that you’re matching the market and the product.
It also goes the reverse way. A lot of times you have access to a market, maybe you are already in Amazon and you already have been selling in there and you understand all of your impact products or something like that, so you already understand the pet customer. Coming into there and then trying to diversify into baby products causes a steep learning curve in understanding the needs and/or understanding the requirements of that market. In baby products, you might have busy moms and dads who are overtired. They’ve been up all night with their babies and they need things that are quick and reliable, they’re absolutely sure they’re going to work, and that’s why they rely on name brands and high level of reviews.
Whereas in the pet product, you can have a niche. Our pets are our babies, but they’re not sick and they’re not keeping us up all night, so you may have found traction with the products that you have and you can have a slightly different product variation. Growing a product line in a market you already understand should be easy because you already get your customers. That’s where you decide what your next product should be. When you already have a market, you should dive deeper into it. It makes it faster and easier for you. Those are the two different ways you want to think about it, market fit for the product and product fit for the market.
How do you find out if your product would sell or if there even is a market for your product? We like to prove it first before we do anything else. You want to think about, “How can I test out whether there’s a product market fit or a market product fit before I ever make anything?” We have five different ways that we do this. We market test it. It might be simply testing or rendering a picture or a Photoshopped image. It could be anything like that, testing it with your core market. If my core market is mothers of preschoolers, there our MOPS programs all over the country. I’m going to go market test it right in the market that I know I want to buy this product or I believe is going to buy this product. When it comes back and they say “No, I’m not going to plunk down $10 or $20 or whatever this is,” then you understand that maybe it’s not a good fit for you and you haven’t made anything yet, so you spent so little money. Maybe you bought them coffee or bought their kids sugar‑free treats.
Do Your Market Research
Another way we do it is a bigger market research, so that would be the second way. That is like ad hoc focus group would be the MOPS model but doing more traditional market research. “If you buy this, would you also consider buying that?” Apples to apples? “If you like this coffee, will you like that coffee?” You do a comparison. There are a couple of apps out there that we use that can reasonably do this. One of my favorites is called Field Agent. It’s easy to use Field Agent because you can do a sample size of as small as a hundred and spend less than even $500 to find out whether or not your product compares to a competitor, and so you can easily do a side by side.
We also sometimes get qualitative information, so when you don’t know how much to sell something for, that’s a good place to do it in terms of putting them side by side and say, “You already know this product and you’re looking at the other product, would you pay the same price, $20, for that?” Usually you get very good qualitative and quantitative answers, so you can also ask them to say, “How much would you pay for it?” and hopefully they’ll write it in a number.
[Tweet “We sometimes test market proof with a ready-made product that’s similar.”]Using both the tools of being able to focus group it and physically talk about it with them and share it in a sell way and then doing that more passive research, which is important because all we have when we’re eCommerce selling or Amazon-selling is our listing. You have a photo, you have bullet points. That’s no different than your market research program. It does it in the same module and in the same way that you would get if you were physically already on Amazon. There’s just no money exchange yet, but that’s our third step.
Sell Something Like It
Maybe you want to sell it or something like it, and we call this AB testing, which for some of you who understand marketing, there’s AB testing, which is when you’re testing one thing against another. We do this as like A to B to C. It’s from A, you move on to B. We sometimes go find a product that’s very similar to what we want. We know we want something more innovative, but maybe we don’t know if we can access the market or sell it to them or draw a big enough audience for it. We’d like to start with something we can get started selling right away.
We have a client, for instance, who’s in the juicing world. She wants to sell a very specialized juicer that does special things. It’s very cool and she has amazing recipes, but if we go find a juicer and put our brand on it, we can get her selling something and get her established and get her some revenue in the meantime she can afford the fully invented version, which requires lots of cost and tooling and other things, and she can make sure this fits her business model and the business growth for her. Getting selling something is the best way to test out whether or not there’s a fit between the product and the market, because you can also then go back to all of those customers and ask them, “Would you like additional features? Would you like this B product version, the next product?” That’s always a great way to go about it. That’s my favorite one and probably our most profitable and our fastest path to profitability.
Seed & Kickstart Your Ideas
The fourth one we do is of course seeding it. That might be Kickstarter, that might be getting an investor or getting seed capital, but we have to be careful because seed capital usually requires sales personalities. It’s not as easy to get seed capital early. You can go about this 0% credit card route and things like that, but you want to be very cautious with that and getting outside investors requires you to be on a fast track to producing something. We’re always cautious in this. If you have no other way and you’ve already done the market test and the research and found that this is what you need, then getting some seed capital into taking it to the next level is critically important.
Make It… Even Smarter
Then the fifth way, which is some of the ways we like, is to make it smarter. We’re going to talk briefly about my favorite making it smarter, which is 3D printing. In 3D printing, we’re able to make a small run of something without making tooling. I have a fabulous client who’s doing a pet product and they wanted to do some girl dog designs and boy dog designs and they weren’t sure which one was going to sell. They wanted to test out many different designs, and so we 3D printed 100 units of each style and then put them up on Amazon to see which one was going to sell, because this is perfect.
Market Proof: Getting outside investors or Kickstarter backers requires you to be on a fast track to producing something.
3D printing, metal, plastics, even some ceramic, those are all capable of being fully tested at the final product. They’re not prototypes, they’re not weak. They’re as strong as regular plastic or metal products so they can go out there and sell it as final product. They only had to make 100 pieces or make one, make five, so you can do a smaller amount of that. Even you can go up to a thousand units pretty reasonably. This is a great way to test it out and, yes, it might cost more per unit, but you haven’t invested in tooling or any of those higher costs of product launching and you’re still able to tweak and define the design as you go forward or only make the one in this particular pet product, make the one that’s going to succeed instead of all four of them. Those are my favorite ways: market test it, research it, sell it, seed it and make it smarter.
Do you need a prototype or working model to get capital, license or even sell your idea? A lot of people come to me and they’ll say, “I have this great idea and I want to license it,” or “I want to sell my idea.” In today’s world, it’s a lot harder to license and sell an idea. It’s a lot easier to sell something that already has sales going for it or some amount of market going for it. Even if you look at those companies out there that are on a freemium level, they have lots of members, they have lots of customers, even if you were not making money on a product but you were selling it already, you are more likely to get capital, get investors, be able to license, or sell that off. In today’s world, I don’t recommend making prototypes or working models. I recommend going straight in and getting sales as fast as possible, but you cannot go from no model at all.
I want to make sure that most people, before they go to make that prototype and that working model, have proven out that they have the market first. As long as you have the research behind it and doing all that, you can do some of that at a rendering level, at a 3D print level, and at a very low level. You don’t necessarily have to roll that all into full production runs or anything like that but you absolutely do need to show people what you plan to sell and that you have a market that wants to buy it. We like to say that the dogs will eat the dog food.
