How do you test a product or prototype when working on a budget?
The UK continues to undergo a prolonged period of economic instability and uncertainty, primarily due to high inflation and interest rates. This has put even greater pressure on cash-strapped startups and small businesses looking to secure funding to test and launch their new products in the current market.
When making a new product, the most important part is having the initial idea tested and validated. Companies don’t need to have a product or service already built in order to actually sell it. Rather, they can present their idea for the product to see if there is a market and interest in it – a fact that many founders often overlook when launching a new product. Selling the idea before you build it can save time and money invested in producing a good that might end up not being sellable at all. It’s also critical, given that 95% of the almost 30,000 products launched very year fail, according to Clayton Christensen, a professor at Harvard Business School.
The idea should be presented to potential customers in the form of a Sellable Paper Product (SPP) which describes its key features and benefits to the customer, including its function, how it solves a problem they may have, its cost, how it can be paid for and delivered, and other services that go around the product.
Try your idea
The first time the idea is presented, it needs to be done face-to-face with the customer so you can get real qualitative feedback on your idea. To get the most out of this, it’s vital to ask them what they think about the product and gauge their reaction, taking on board any areas for improvement. That could include what they like about it, whether they would buy it and how they would use it. If they don’t like it, it’s important to drill down into exactly why – whether it’s the price or the product itself.
Start with the people you have quick access to. Try the idea on family and friends first but make sure that they also are a part of your target market. Another useful resource is existing customers, who are already familiar with the brand and products.
Market your idea
That initial market research then needs to be widened to a larger base to make sure that there are enough customers who will actually buy it. This can be done as a pre-booking webpage, a sales presentation, a cold calling manuscript, a marketing activity, a flyer or a visual mock up, to name but a few methods. Whatever the format, it needs to answer two main questions: will the customer sign up to buy it and is the market for it big enough to make it viable?
If you order books are full, your pre-booking signups are flooding over or you are closing deal after deal directly over the phone, you know that your idea is actually a valid business.That’s exactly how Northvolt did it. They sold first and then got the funding to build their factory and product. So focus on selling your idea to enough people, and you can easily get it funded based only on your order books.