Avoid Startup Failure: How to Test Your Product Idea First

As a user experience design consultant, I am blown away by your vibrant developer community. I love the way developers are always building some tool or app to solve a problem. You’re constantly innovating and are full of ideas.

I know some of you build these things for the love of it, and that is awesome. But I also know many of you are looking to turn them into businesses. Unfortunately:

63% of all tech startups fail in their first five years. Over 90% will fail eventually.

This is the highest of any startup sector.

You put so much effort into building these products only to see them fail. In this post, I want to share a technique I use to test new product ideas. I use it before investing time and resources into development.

Why Do Tech Startups Fail?

According to research, the biggest reasons are poor market fit and a lack of marketing strategy. In other words, developers often focus too much on building features. They don’t focus enough on understanding the market and how to reach and engage customers.

With that in mind, how can you address these problems before you spend too much time and money building a product? Well, in my guide for launching your next big idea, I cover this subject in detail. But in this post, I want to focus on the concept of running a test marketing campaign before you begin to build.

Why Run a Test Marketing Campaign

Running a test marketing campaign comes with four advantages:

  • You can use it to determine if customers are interested in your product idea. You can do this before investing a lot in it’s development.
  • It helps you understand your target market, their pain points, and how to effectively reach and communicate with them.
  • It provides valuable data and insights that can be used to shape the product roadmap and ensure you build a solution that truly meets their needs.
  • It helps you test pricing models and work out what you can realistically charge.

Most of all, it forces you to plan the marketing of your product before you build it. This ensures you have a clear strategy to reach and convert customers once you launch.

So how do you run a test campaign?

How To Run A Test Marketing Campaign

To test your big idea, we’re going to build a landing page promoting your product and drive traffic to that page through a variety of channels. We’re going to use data from that campaign such as:

  • Number of visitors
  • Conversion rates
  • Engagement
  • Feedback

We’ll use the data to make smart decisions. We’ll use it to judge your product idea and refine it before spending a lot on full development. Let’s do this step by step.

Step 1: Defining Your Campaign

Before you build out your campaign, you need to decide how you’re going to measure its success. Put another way, you need to decide what your call to action is going to be for your landing page.

You could adopt several approaches. The one you choose depends on your preferences and attitudes towards transparency.

The “stay informed” approach

With this approach, we tell visitors to our landing page that the product isn’t yet available. We invite them to subscribe to a mailing list to be the first to know when it launches. Our measure of success is the number of people who subscribe.

Asking people to signup to a mailing list will give you an indication of interest.

Although this approach provides a general sense of someone’s interest in the app, it does not indicate whether they are willing to buy. That said, it will give you a useful list of interested people you can follow up with later.

The “waiting list” approach.

Like the “stay informed” approach, this involves inviting visitors to sign up for a waiting list for the product. Our measure of success is once again the number of people who subscribe.

Asking people to join a waiting list provides an indication of interest as well as generating a sense of popularity.

The “waiting list” approach provides a strong signal of customer interest. People show their willingness to potentially buy the product by joining it. It also builds a sense of the app being in demand.

But some may consider this approach more dishonest since nothing has been built yet.

The “fake order” approach

This approach offers the user the option to buy. But when they click, you inform them that the app has yet to launch, and they can sign up for updates instead.

A fake “buy now” option maybe the most accurate indication of interest but can alienate users.

This lets you measure interest in buying more accurately. But, it risks alienating people because you give the impression it was available today.

The “pre-order” approach

In most cases, this is my preferred approach. This approach involves actually allowing users to pre-order the product, even though it has not yet been built. You do not take their money until you can fulfill the order, but they do enter their payment details.

The option to preorder is a strong indication of intent, but may put off some people from acting.

This allows you to gauge genuine customer demand by allowing users to place orders for your product, even though it hasn’t yet been developed.

That said, it’s slightly less of an accurate measure than the “fake order” approach because some people are reluctant to preorder.

Whatever approach you choose, you’ll need to decide on how to price your product. You’ll need this to judge people’s willingness to buy at that price.

Step 2: Setting Your Price

Deciding on your pricing approach is a bit of a daunting task, but you don’t need to get it perfect at this stage. The first thing you need to decide is your pricing model. Options include:

  • Freemium. Provides free basic software with the option to upgrade for additional features or capacity.
  • Subscription. Users are charged a recurring fee for software access, often with tiered pricing based on features, users, or usage limits.
  • Usage-Based. Charges are based on usage, like the number of emails sent, data stored, or hours used. This is also known as a “pay-as-you-go” model.
  • Per-User. Charges based on the number of user accounts or seats. This is straightforward and common in B2B software.
  • Feature-Based. Offers multiple packages with a different set of features at each price point.
  • Hybrid. Combines elements of the above models to fit unique business needs. For example, a freemium model with additional pay-per-use features.

You will also need to consider your price point, which will be dependent on:

  • Audience. How much are people willing to pay, and what payment structure suits them most?
  • Competition. What does the competition charge and how do they structure their pricing plans?
  • Flexibility. Does your pricing allow enough flexibility to offer discounts or to change over time?
  • Costs. Will your price cover costs at any level of customer, or do you need a minimum customer base?

For the sake of your test campaign, make the best guess you can on what the best approach may be. If you’re concerned, you can do some research to validate your pricing assumptions before launching the campaign. You can also AB test different pricing models while your campaign is running if you would like to explore multiple approaches.

Once you’ve determined a pricing strategy, you can move on to the next step – creating your landing page.

Step 3: Create Your Landing Page

Now that you have defined your approach and pricing, you can turn your attention to creating a landing page. I go into this topic in much more detail in my course and have also written about it here if you need more information.

But, the key things to consider when creating your landing page are:

  • Headline: Craft a clear, concise, and compelling headline that captures the essence of your product.
  • Value Proposition: Explain the key benefits, what problems your app solves, and how it helps users achieve their goals.
  • Features: Outline what the app will do and how it will practically deliver on your promises.
  • Objections: Try to add responses to common questions and concerns where appropriate.
  • Call to action: Add in your form inviting people to either preorder, purchase, or sign up. If you want more advice on creating calls to action, I cover it in my course on creating high-converting websites or in this post.

You may want to consider running some testing before launching your landing page to give it the best chance of success. I cover that topic in my article on fast and budget-friendly testing.

But don’t forget, you can trial many versions of a landing page, if you are unsure which value proposition will work best. An AB testing tool like Crazy Egg will make this relatively straightforward.

CrazyEgg is a great tool both for AB testing landing page elements and traffic visitor behavior.

With your landing page done, your next step is to start driving some traffic to it to see how people respond to your offering.

Step 4: Drive Traffic to Your Landing Page

First, you need to define who your target audience is. It doesn’t need to be everybody who might use the app. Instead, focus on one very specific group who tend to be a part of a single community. For example, people who read the same blogs, attend the same events, and listen to the same podcasts.

Once you’ve defined your audience, it’s time to reach out to them. There are three channels available to you.

  • Community engagement. Go where your audience is, and start engaging with them there. This might be Reddit, forums, Slack, mailing lists, conferences, and more.
  • Content marketing. Try and get your content in front of your audience. Look to become a guest blogger on sites they read or get interviewed on podcasts they listen to.
  • Paid advertising. If you have a budget, consider writing sponsored posts. Also, consider buying pay-per-click ads or getting ads on social media.

This will feel tough, and you’ll probably feel out of your depth. But, a successful marketing strategy is crucial for your product’s long-term success. So, you should learn those lessons now, rather than after you have built the product.

A successful marketing strategy is crucial for your product’s long-term success. So, you should learn those lessons now, rather than after you have built the product.

It will involve you learning new skills, testing different approaches, and iterating as you go until you find an approach that works. If you don’t succeed with one audience, try another, until you get things right.

Keep Iterating

You won’t get it right the first time. You might select the wrong audience, misjudge the pricing, or not get the landing page right. That’s okay. Don’t give up on your idea. Instead, learn lessons and continue iterating on your approach.

Adjust Your Marketing Approach

For example, if you’re having trouble driving traffic to your landing page, the problem might be with your ads or other marketing. Try some different approaches. If you’re still having problems, then you might need to target a different audience.

Adapt Your Landing Page

But, if the problem is with the landing page, there are a couple of things to try. First, consider installing Crazy Egg or Microsoft Clarity on the page. That will allow you to monitor user behavior through heat maps, analytics, and screen recordings. That may help you to work out where things are going wrong.

Second, consider running a survey that you show when somebody goes to leave your landing page. You only need to ask one question: “If you decide not to buy today it would be helpful to know why.”

You can then offer them options such as:

  • It was too expensive.
  • I didn’t trust the website.
  • I don’t preorder products.
  • The product didn’t look useful.

Or anything else you consider relevant. Also, include an “other” option in case users have other reasons.

Try running a survey asking people why they did not act.

It Is Okay If An Idea Doesn’t Work

Hopefully, this will allow you to refine the way you present your app or possibly even adjust your product or pricing.

Of course it’s possible that at the end of the day you conclude your big idea won’t work — and that’s okay. There will always be another idea around the corner and you can invest your time and energy in that instead.

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