How to Get Ready to Test The Market Like a Pro?
One of the startups that I have the pleasure of collaborating with (in a mentorship capacity) has got the MVP ready (it is a marketplace) and is going to test the market very soon (exciting isn’t it?). I am not a big fan of fishing, but I’ll try to use fishing as an analogy to share some tips on how to get ready to take out your MVP and test the market. This post goes hand in hand with my other post on “How to get your first 100 customer for your startup“.
Supposedly your MVP has been developed through close collaboration with the niche, and your target customers. So the service that you offer through a website or an App, is fit for purpose to solve a problem, i.e. will add some value to the customer. In fishing analogy the fishing stick, length of the rope,… down to the bait is functioning, versatile (enough) and are fit for the type of the fish (customer/niche), its weigh, etc. More importantly the bait (product) is appealing to the customers (fish!).
What kind of fish you want to catch?
The emphasize on the customer is because your product or service is not supposed to solve all the problems in the world, and for everyone. Just like fishing, it is vital to know your early adopters (see this on early adopters), those who are more motivated and ready to test your product. In fishing analogy, you need to know exactly what type of the bait (size, color, shape, softness,…) to use to hook the type of the fish you want to catch.
Secondly, you need to know the behavior of the first adopters in the niche you have targeted. What product features appeal more to them (Product), what price range (Price) would yield higher conversion rate, and what channels are best to reach them (Place). In the fishing analogy, you need to know the best location for the type of the fish you want to catch, the depth of the water to aim for, the time of the day (or even the year), how to respond when the fish touches the bait, and when/how to pull and close the deal. In short, know your fist adopters!
As technology becomes more and more available, the code loses its value as a competitive advantage; it gives its place to strategy and marketing. So few words on competition.
Learn and optimize – Capture customer response, adopt/revise, test again. The market test period could take 3 to 9 month, though better to keep it shorter than 6 month. You should assess the effectiveness of few marketing channels too. Gage COCA and ROI of different marketing channels.
Start small – Take your MVP to small community to test. You might have a small marketing budget to test channels performance, but do not go into the market in a big way and burn a big marketing budget. The founder should be leading the test period. If shy to face customers, get help with professional sales team for the test period, BUT make sure you are with them all the time, listen and learn.
Avoid copying – If your niche is competitive and you are betting on few features to build your customer base think of introducing your MVP to your first adopters differently. If your niche is already a purple ocean, then taking the same path as others to introduce your MVP is fatal. Research your competitors, form brainstorming sessions and develop a creative test approach. Alliance and piggy back might be
Don’t enter a red ocean – Do not start competing in a crowded market (see below picture), unless you have identified a small niche of the market that it is blue, or at least purple (mix of red and blue). You got to have a very deep knowledge of the niche, and all the competitors in it, so you could confidently claim that there is an overlooked niche, a handicap with all the rivals, your solution is unique and solves a unique problem of your target customer.
Sometimes the niche is so huge, or expanding very fast hence you could argue that there is still room for another player. If that is your strategy, you better support it by facts, and bring in your best execution strategy.