If launching a startup is like jumping off a cliff and building a plane on the way down, then lean startup principles are the kiddie parachutes you deploy to buy yourself time before you hit the ground. While they’re no guarantee that you’ll land safely, they do minimize your chances of a spectacular crash and burn.
To the uninitiated, the lean startup movement advocates maximizing learning and minimizing cash burn during your search for a sustainable and scalable business model. If that seems like a mouthful, here’s a summary: put your stuff out there as fast as possible, see how it does, and keep iterating until you succeed. Do both qualitative and quantitative research to figure out whether you’re building a product people actually want and whether it’s possible to acquire customers in a cost-effective way. This usually entails taking a hard but honest look at the assumptions you may have about your product, target users, monetization models, competitive landscape, and distribution channels.
Seems like a lot to do right? You may be wondering if this would cost you a fortune in time, energy, or money. Luckily, plenty of free and cheap methods exist for you to validate an early prototype of your idea. Here are some of the recent techniques.
FREEBIE #1: Pitch EVERYBODY
Pitching people casually is one of the quickest ways to sanity-check your idea. It’s also free and something you’re probably already doing anyway, but maybe not methodically enough to maximize your learning. Here are some tips to do it better:
- Literally Pitch EVERYBODY – While you should certainly pitch target users and people in your startup community, make conscious efforts to branch out, especially if you’re running a consumer-facing startup with broad appeal. Sometimes your target customer isn’t who you think it will be. My co-founder and I have pitched teenagers, elderly women, med students, hedge fund traders, and many unsuspecting passersby. We also wanted to make sure we could communicate jargon-free with the “normals”.
- Rotate your taglines – Some people resonate with ideas and others with painpoints. Some like novelty and others appreciate comparisons with the familiar. Prepare a few different taglines and track which ones work best with which sort of people. We paid attention to the pitches that produced the strongest emotional reactions and refined those.
- Identify your best customers – You’re going to need consistent and reliable customer feedback throughout the lifecycle of your product, so why not develop relationships with your users right away? Ask anyone who reacts positively to your pitch to sign up for your beta. Grab their contact info and be consistent in following up. We tapped the most excited customers for referrals and customer development interviews.
- Figure out your real competition – While many of your critics might enjoy pointing out how close you are to being crushed by Facebook, your competition is often not another hot startup, but rather some old-school method of doing things that users are unwilling to let go of. Old habits are hard to change. Better to figure out the barriers now before ending up losing to Outlook or, god forbid, a notepad.
How do you evaluate the qualitative feedback you get from broad pitching? This is a bit of a niche view, but I’m inclined to conclude that the more extreme responses you get, the more likely you’re on to something. There will always be people who will never buy into your idea. You’ll know who they are immediately because they’ll look at you blankly or snicker as you explain your product. On the other hand, there will be people who are absolutely psyched when they hear what you’re working on. Look for emotion. Apathy is your enemy.
FREEBIE #2 – Quantify User Behavior w/ Free Tools and Accessible Communities
Startups fail because they can’t acquire enough committed users. Usually this happens because they’ve made a product nobody really wants. Mitigate this risk by doing the following:
General Behavioral Study
You need to understand what people are doing independently of your product to understand whether there are real desires and frustrations you can address and what ingrained preferences exist for current solutions. Cindy Alvarez’s blog on customer development has been my go-to resource for structuring the right questions when interviewing potential customers. Key point: don’t ask leading questions, especially about what customers want (they never know). Instead, understand their goals and how they’re achieving them today.
When we did this, we built a survey with SurveyGizmo, the most feature-rich free survey tool I could find (especially if you qualify for their student account), and then had people complete it both in-person and online. To minimize selection bias, we went out of our way to match survey respondents with the general U.S. Demographic. While we did this for free by researching representative communities we could tap into, you can pay to target certain demographics with services like AskYourTargetMarket.com. You can also tweet or post the survey on your friends’ Facebook walls, both of which led to very high completion rates for us, but be sure to complement these responses with ones from outside your normal social circles if appropriate.
Product Positioning Study
Once you have a product idea to test, there are plenty of easy and quick ways to solicit feedback. The most popular is to create landing pages with just enough compelling info to entice a user to leave his or her contact information. Doing this tests the value of various distribution channels as well as the effectiveness of your positioning. We built and tested various iterations of our landing pages with Google Analytics (free) and a lifetime KissMetrics account (which we luckily got for free), but other startups have used affordable tools like LaunchRock, Unbounce, Wufoo, and Optimizely for the same purpose.
Plenty of tactical advice has already been written about how to set up and test landing pages, so I’ll point you to two by Vinicius Vacanti on how his company Yipit handled this: The Shortcut We Took to Build Yipit in Three Days, and How To Get Your First 1000 Users.
For ideas on how to drive traffic to either your online surveys or your product landing pages, see Freebies #3 and #4.
FREEBIE #3 – Get Credits to Try Out Google and Facebook Advertising
While Google and Facebook ads are often the first advertising channels that new entrepreneurs try, they’re rarely the most effective ones. Picking the right keywords can be challenging for the uninitiated and niche Facebook targeting can get expensive. Luckily, you can experiment for free by getting promotional codes. Some hosting services offer $50-$100 in advertising credits if you register your domain name with them, but in case yours doesn’t, try the following tactics:
Sign up for an account with Google Adwords, but don’t start any campaigns. At some point, Google will start sending you periodic emails with promo codes to get you to come back to the service. We managed to convince Google to honor a $100 credit that had technically expired by the time we went to redeem it.
Search the internet for Facebook Ads promo codes. They often send them out to popular internet marketing blogs. We landed $75 worth of free advertising this way. If you can’t find one, start a very small campaign and then stop it. In our case, Facebook sent a horde of customer service people after us who wouldn’t stop calling us until we gave in to a survey about our experiences. This is a prime opportunity for you, the entrepreneur, to finagle some free credits.
FREEBIE #4 – Discover the Best Channels for Pimping Your Product
In our case, cost of customer acquisition via Google or Facebook ads turned out to be way too expensive to use as our main marketing channel. What other distribution channels can you try? If you have a strong community you know well and can target, that’s probably best. You also can attempt viral marketing with contentious blog posts or entertaining demo videos, but we’ve had better luck getting sustainable conversions from the following three sources:
Amazon’s Mechanical Turk
Mechanical Turk is a crowdsourcing platform for getting small tasks done that require human intelligence. With the service, we got people to complete fairly detailed product opinion surveys for 2-15 cents which, while not free, was the cheapest acquisition model we tested in terms of price and time invested. We ran several tests where we collected demographic information, summarized our product, and then asked whether the respondent would use it. We asked for rationale justifying their answer and an email address if they were interested in testing our product. We got anywhere from 50-80% “yes” responses and paid about $0.80 for each email – that’s an email, not a click – we received.
That said, be mindful that soliciting contact information on Mechanical Turk is technically against the terms of service, so be sure to only collect the information on a voluntary basis and outside the site’s own survey system.
Twitter + Twidium
While your own followers are a good place to start gauging interest, one of the more effective ways to get attention on Twitter is by following people who’ve tweeted about similar products or the problem space you’re tackling. Twitter imposes ratio limits of # followed / # followers, but if your tagline is on point and you consistently target the right people, you’ll typically get enough followbacks to keep following new people.
A point on measuring ROI on Twitter: Twitter traffic can be hard to track, especially as most of it comes from third-party twitter clients that are listed generically as “direct traffic”. Ways to combat this include using the Google URL Builder in conjunction with, bit.ly, a URL shortener, to tag URLs used in Twitter campaigns.
Although we haven’t submitted any of our startup ideas to Hacker News, the community has been very good to us Founder’s Block writers. Since launch, we’ve gotten over 18% of our traffic directly from Hacker News. Compare that with 6.40% from Twitter, 5.01% from Techmeme, and 4.56% from organic Google search results. Success on Hacker News depends partially on karma but mostly on whether your blog topics are in line with the interests du jour. Hint: these days, lean startup articles tend to do very well.
FREEBIE #5 – Get Matched With Early Adopters
There are plenty of other free ways to get feedback on your startup idea. Some ones I’ve come across in the past few months include AlphaList, BetaCandy, and of course Bob’s LeanThingy, all of which try to connect startups with early adopters. Any other suggestions?
Now that you tested your idea, if there is the infamous product/market fit, you should test you mobile app properly.
via FoundersBlockWant to validate your startup idea for FREE? by BigBalli