tech-companyI am an undergraduate engineering student, and I often get enthusiastic about ideas—but after some time I start to question myself and wonder “is it really a great idea?”
How can one select an idea or assess the market’s needs without much investment (as I am just a college student)?
Cheapest method - depends on the audience. If it is a mass market product, then use the Mechanical Turk. Put up ads saying you want to talk to people about their recent experience of (whatever it is you solve). Then ask them behavioural questions (why did you look to solve this problem, how often have you tried to solve this problem, what does it cost you to get this problem solved, etc). Don’t ask forward facing questions - they’re misleading (i.e. don’t ask whether they will buy it, how much they’d be prepared to pay, or any other speculation about they might behave in a future context).
If it is a specialised product, then find the people most likely to be buying, and ask them, over the phone. Same thing - historical questions.
If people keep telling you that they haven’t solved the problem recently, or that the value is low, you either need to change who you’re asking (there may be a group for whom this is an important problem worth time and money), or it may be a dead duck (just not important enough to pay to solve, for anyone).
This is part of Lean Startup. It’s called “Customer Development”. It tells you how you find your buyer, what excites the buyer, and how much you can charge… when done well. Or it tells you that you can’t find buyers, won’t make many sales, and won’t make much money… Which is pretty useful to know before you spend time and money on making it.
Done badly, it tells you where you need some self improvement before becoming an entrepreneur ;)
Cheapest method: Learn about Customer Development and execution thereof, and you can basically test the feasibility of an identified business opportunity at little or no budget and even with little tech knowledge (if your idea is based around tech).
Testing the feasibility of a business opportunity can easily be done with little or no financial investment. As noted by JezC you are looking at what’s popularly labelled “Customer Development”. Instead of making a pitiful attempt at explaining everything there is to know about customer development, I would recommend mainly two books: “Four Steps to the Epiphany” by Steve Blank and “The Mom Test” by Rob Fitzpatrick. You can easily read these books in one or two days, and you will have a really good idea about going about testing the feasibility of your identified business opportunity. The first mentioned book will tell you about the philosophy of customer development, while the second mentioned will give you a practical guide to performing ‘customer conversations’ which is essential in customer development. My best advice is: “get out of the building and talk to real (potential) customers”.
The best indication of “a great idea” is getting money in hand for said product/service. Nothing says validation better. The earlier you do this the better.
You don’t need a full working product though. You can build a low-fi prototype. For example:
It then becomes important to get your idea in front of your customer segment quickly and cheaply. These are just some examples.
Can you get three people to part with their money in 48 hours?
That’s it. Get your product in front of your customer segments quickly and cheaply and get money in hand.
Sales is your end goal, but the road that takes you there is learning about your customers and their problems. If you are just looking for and getting yes/no responses, your learning is one dimensional.
This method is the quickest and cheapest way to assess basic validity, but it doesn’t replace Customer Development. A more thorough Customer Development method is still needed to refine the other important aspects of your idea that make up a successful business.
Pick up ‘Lean Customer Development’ by Cindy Alvarez. It’s the best source for executing Cust Dev, imho. It gets into the nitty gritty.
There a method called “Lean Startup” described very well in the books “Lean Startup” by Eric Reis and “Running Lean”by Ash Maurya. http://en.wikipedia.org/wiki/Lean_startup
The “Lean Startup” book focuses on the high level principles and strategy, the why. The “Running Lean” book focuses on more low level tactics, the step by step how to
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