Concept Test For Startups

Using data to justify your startup ideas is easier than you think!

Guest posting by Eli Schwartz (SurveyMonkey)

Read any good startup story and it typically begins with the founder(s) identifying a particular problem and developing a solution encased (hopefully) within a business model. A creative way of solving a challenge, of course, does not guarantee the success of a startup; for that you need successful execution and mass adoption.

Achieving mass adoption requires that: (a) many people have the same problem and (b) the solution you developed works for enough of the masses. To discover whether there is any mass appeal you need to do market research and validation. Pushing forward with an idea without any validation is a fool’s errand, unless you are super lucky or have Steve Job’s level of intuition.

The challenge many founders will face when doing their research is that they are so excited about their ideas. This is a problem as they inevitably let their own assumptions and biases creep into their research process. Ineffective research will lead to misguided validation and that is how things like the Ionic Ear or leopard pillows ended up getting created. It's not always easy for the founders to step back and see their own biases when doing their research, so here are five basic steps to follow that can help you keep track and give solid data to build your foundation.

 1. Use surveys.  While user interviews are great for getting solid feedback from actual potential users, it isn’t scalable nor is it very conducive for the types of quantitative analysis you might need to get investor backing. The better alternative to user interviews is a standardized online survey that is sent to all of your research subjects. An online survey allows you to quickly compare your collected feedback and make decisions based on your collected data. For simple data collection, a tool like Google Docs might be enough. However for more question and analysis options, you should use a more advanced tool like SurveyMonkey .

2. Do not ask loaded questions. A loaded question is where your question pushes people into a response that they would not have given on their own. An example of a loaded question could be: “how much do you hate when your phone rings during a meeting?” You are assuming that the interviewee has the same sentiment you have towards phones ringing during meetings and you are asking them to express their displeasure on your scale rather than finding out if they even share your feelings. A better way to ask this question is: “do you dislike when your phone rings during a meeting”.  A follow up question can be: “can you elaborate on how much you dislike phones ringing in meetings?” 

It’s possible that in your own enthusiasm towards an idea, you may unconsciously be bias with the questions. The best way to get around this challenge is to have someone proofread the survey and specifically look out for the bias. Aside from bias poisoning your results, you definitely don’t want to go down a path of building something that was based on faulty logic.

3. Use only one variable in each question. Having more than one variable in a question will lead to answers that are very difficult to analyze. A bad question might be: “do you have a smartphone and will you buy a smart watch this year?”  You cannot know whether the user is answering the variable smart phone or smart watch. A better way of asking this question would be to break it into two questions.

Aside from making it easier for the respondent to understand the question, it will make it  easier to analyze the data. If there’s only one side of the question that you need to analyze, you can just filter it away. For example: question 1, do you have a smartphone? Question 2, have you considered buying a smart watch this year. You can ignore all the respondents that answered ‘no’ to smartphone, but ‘yes’ to smart watch.

4.Test everything. Most of the popular survey tools allow you to add videos, images and text callouts into the questionnaire. Don’t stop with just researching about whether customers would buy your product or service. Taking advantage of these multimedia features. You can test your marketing taglines, company names, logos, advertisements, product packaging and virtually everything that goes into a purchasing decision.  

Advancements in technology allow startups to level the playing field with MNCs. Large companies have always used focus groups to test new product ideas and marketing, but now with internet access, anyone can and should do the same thing. At some point there will be conclusive evidence about whether a certain marketing pitch was effective, but why wait until post-budget spending when you can do it beforehand? The same goes for landing page testing. Rather than forcing your designers to narrow down page possibilities to just two during an A/B test, a survey can allow you to figure out which of the final two should be placed into the A/B test.

5. Where to get responses. When doing something as important as validating your product and company ideas, you want to be very certain that your research population is representative of your customer base.  If your target market is F&B owners, asking your friends and family for opinions has no value if they are not F&B owners. Similarly, if your goal is the general population, make sure you aren’t getting opinions from just one office or neighborhood. There are number of services that can help you gather respondents, but the lowest costing services will be from online tools like SurveyMonkey Audience  or Google Consumer Surveys that charge $1-$5 per response. When all you are looking to do is validate an idea or concept, you don’t even need that many respondents. As long as there is statistical significance in your data, you can make important decisions with smaller than needed sample sizes.

There are countless books and classes on how to properly do market research. Your research respondents will not give you endless opportunities to ask them questions, so it is ideal to get your answers and data without having to repeat the research exercise. By following these five steps, you will hopefully removed enough bias and assumptions to give you qualified answers.

While many things can go wrong between the time that you validate the market need for your solution until the successful launch of a product, market validation is necessary as it will ensure that there’s a potential customer base for your product. Necessity might be the mother of all inventions, but misplaced assumptions have to be banished in order to nurture your innovations to maturity.  

Bio:

Eli Schwartz is the Director of Marketing, APAC for SurveyMonkey, the world’s largest online survey platform. He oversees SurveyMonkey’s marketing efforts in the Asia Pacific region. In addition, he leads the company’s global SEO efforts and strategies across 17 languages. SurveyMonkey serves over 25 million customers worldwide, including 99% of the Fortune 500, and collects over 3 million online survey responses daily.

Eli has been working in online marketing for the last decade and has overseen SEO strategy, paid media spend and social campaigns for companies ranging from early startups to the top sites in Alexa/Compete rankings. You can read his musings on marketing and other topics at http://www.elischwartz.co.