Proof of the Pudding (or Find a Market First)

Find your Startup’s market before you spend thousand of dollars building software and getting your company up and running. Follow these steps to test the market for any kind of new business.

Market First, Product Second

There is a common misconception in the startup world–especially the technology startup world, but really amongst almost any kind of business founder–that you must have a product first, before you try to sell it. What, you say? That’s pure common sense! You can’t sell a chair if you don’t have a chair.

Au contraire, mon frére!

Not only can you sell a chair before there is a chair (just ask Pottery Barn, the build-on-demand furniture company) but you must sell it first. In fact, not only should you first find a buyer, but you should find many buyers, enough to call a “market.”

Never Build a Chair before You’ve Sold It (Lessons from Pottery Barn)

You should not start a chair selling company before you know if there is a market for your chairs. And you certainly shouldn’t build them before you know about a market, else how will you know what to build, how much to spend, and if you will make any money at this chair-making game? That’s the Pottery Barn way, a company that builds on demand for its customers. Yes, it means there’s a longer wait time to get your chair (or couch, in my case) but that’s because Pottery Barn isn’t building and warehousing any furniture. They take the order, take your money, and then build the chair. This saves them warehousing costs, cancelled order costs (you can’t cancel a made-to-order purchase) and they always know exactly how much fabric and stuffing they will need. It’s brilliant marketing, and a sound business model I like to follow.

Sell the Software, Build the Software

Let’s move this analogy to something a little closer to home, like software. In Silicon Valley, there’s a saying that many engineers solve problems that never existed. This is meant to show that simply being able to do something, doesn’t mean anyone wants you to do it. It’s a hard lesson to learn on the job. Hours, months, years sometimes, of building a really cool technology that doesn’t have a market is a sad waste of effort and money. And very painful to the inventor when the project is shut down. Yet engineers (and business people who really should know better) do it all the time. Then they call me and hope that I can find a market for them. Sometimes I can, and sometimes I can’t. But wouldn’t it be better to find out first if anyone wants your product, and then build it if enough do?

Test Your Market with These Three Steps

Indeed, this approach is one that more and more entrepreneurs have been taking. It’s a process that looks like this:

  1. You have an idea, or think you see a need in the market that you can fill, fix, alleviate.
  2. You quickly sketch out a prototype. Something on paper will do as well as a clickable mockup. The idea is to convey your solution to those who might like it, without spending too much time or money.
  3. Now get this prototype in front of the buyers. Notice, I said buyers. Not investors, not friends & family, not your therapist, but the people you actually want to use it.

Then see what happens. Does anyone want it? Can you use your networks (Twitter, Facebook, Google+) to generate interest? Will folks go to a landing page? Will they give you their email so you can contact them when/if you launch? This is the proof of the pudding.

Proof of the Pudding is in the Eating

If no one is interested, if nobody signed up to your “keep me informed” list, or you just can’t get anyone to even look at the thing, you either have a really crappy landing page or there simply isn’t any interest. Nobody is eating it. It could mean they don’t like your pudding, your pudding is too expensive, they’re on a diet, or it looks terrible and they’re not touching that!

Either way, you’ve got real data to work with and can make changes, try something else, or scrap the whole idea.

So go buy yourself a domain ($5.99) and a landing page template ($13) and mock up some images that people will like (15 hours of your time or 2 hours from a real designer) and spend a few weeks testing the market before you go any further. You’ll be super glad you did–especially when thousands of folks flock to your website and sign up for the beta release–because now you’ve got a market that you can show angel investors and a fire under your feet to move forward with a truly marketable idea.

Taste Our Pudding

FYI, I’m thinking about this today because I’m working with several companies that have already spent a lot of money and effort on a project and are only now calling a marketer (me) to see if there’s a market for them. I hope I can find one.

Also, my own team is working on a new idea called Trend. Check it out, let me know what you think of our pudding–would you eat it? Are you part of a market? We need to know now, before we go any further.

Originally published in Starting from Zero.


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