I get exposed to a lot of new business ideas in my line of work. Besides the people who consult with me on their projects, I also sit on various boards and committees that review business plans for various government grants and awards, business plan competitions, as well as plans that are being reviewed for potential investment. I’d say I see about 60-80 a year, not counting the 30-60 my students make for their Entrepreneurship class (I teach Entrepreneurship at Concordia University’s John Molson School of Business).
Unfortunately, a lot of these business ideas are lousy. Here’s why.
The problem is that most of these business concepts are borne from “a good idea” that the entrepreneur had and figured it would make for a good business. Ask them whether they did any market testing to make sure people will want it and buy it, the frequent response I get is:
“My family and friends all think it’s brilliant.”
This is the extent of their market testing.
Uhm… your family and friends are lying to you, pal. They don’t want to waste their energy telling you that your idea sucks. Sorry, I know that was sudden, but someone had to tell you.
The truth is that they’re probably telling you what you want to hear. Or they simply have no intention of getting into a protracted debate with you about the merits (or lack thereof) of your idea. Not to mention they often don’t have the experience to assess your venture. If they think your idea is a brain fart, they are not about to tell you to your face and waste precious minutes of their life defending themselves. They know that one day, far in the future, they’ll be on their deathbeds and they’ll want those minutes back.
So really, you have to do your own market testing- real market testing, not “friends and family” crap. Real research means talking with potential customers. They are the only ones that matter in this whole equation. Not you, not your friends and family, not even me and my panels of business wonks, either. The only person that matters here is your customers, because in the end, they will vote with their wallets.
So before you sit down and write your plan or see anyone about your idea, talk to ten people who are not your friends and family and ask them some questions. Figure out whether they’d buy what you’ve got if it was ready today. If you get an enthusiastic response, then you’re on to something. Otherwise, your idea needs refining.
Got some good ideas for market testing? Share them with us! Write them in below.