Are you tired of trying every type of business under the sun but never getting any sales?
Niche site, software products, dropshipping, Amazon FBA, and on and on and on.
They are all valid business models but if you’re not doing the RIGHT first step then you’ll never be able to buy the Ferrari and stay at that fancy-fancy hotel.
So, then you thought to launch your own Kickstarter campaign or start a line of men’s fashion wares.
But, you don’t want to launch to crickets again like the last business endeavors.
In this series of 2 articles I’m going to tackle validation.
What is validation?
Glad you asked.
In it’s most simple form, it is knowing that a product will sell before you ever manufacture a single unit.
So many people come to us ready to make their first order run of 500 units and just see if the world will buy them.
But here is the reality…
Manufacturing a product that is a money making machine is all about the time and effort put in at the beginning to make sure the market wants your product.
Firstly knowing what to look for and finding the source of good ideas, and secondly ensuring the idea is a fool proof money making machine.
The hard part for us impatient entrepreneurs is actually putting in the time it takes to properly prove an idea is valid and ready to be sold – and make loads of money.
Because, validation has no timeline.
Don’t move forward with a product idea until you KNOW your product will sell heaps AND you’re able to answer why it will sell heaps with data to back it up. (Disclaimer here: if it’s taking you months and months to validate a single idea it might be time to move on from that product.)
Before we get into the bulk of the article I’d like to share a video Rico and I recently made walking through the idea generation process. Take a gander below and then finish off the article for the nitty gritty details and secret tricks.
How to Find an Idea That is a Money Printing Machine?
Passion or Profit
Inevitably when setting off down the entrepreneurial path the question comes up, “should I start a business around a topic/product I am passionate about or should I pursue a niche with the highest potential for profit?”
Are passion and profit mutually exclusive?
With passion you pursue things that are within the niches that interest you.
An example of this would be that problem you noticed on your last spelunking expedition.
You love to go spelunking regularly and every time you go you notice that one thing. You catch yourself saying often, “if only this product existed it would make this so much easier.” This is an example of passion leading to product business.
Because it’s your passion you most likely have a much clearer picture of the market and the viability of selling the product you’re thinking of along with how many people would potentially buy the thing.
If you wanted to get hyper focused and create a product within your passion that meets very specific needs – take two of your passions and merge them together.
Say, you’re a parent with younger children.
You also love spelunking. But every-time you take your kids spelunking you encounter a certain challenge.
Cross combine the niches to get hyper specific and find a problem with a real solution. (We’ll get into this more below.)
With a profit focus the niche has no sway – anything is fair game as long as it rakes in the big bucks.
Imagine being hunkered over a computer busting out the spreadsheets and going to town with the research. This is just purely a numbers game and doing the research to find maximum opportunity.
Something to consider here is your drive and willingness to continue and discipline yourself even when the work is not interesting.
As I asked above, are the two approaches mutually exclusive?
If you pursue a passion are you forgoing potential greater profits elsewhere?
If you pursue a profit approach are you selling your soul to the profit monster, never to return the same again?
The good news is they don’t have to be mutually exclusive. There are opportunities to build amazing products and make awesome money in just about every niche.
It’s a question of how much effort is put into the research. The idea generation and validation phase is all about solid research to maximize your potential for attracting numerous customers to your new product.
If you’re not doing the research correctly then no matter if it’s your passion or not the product will most likely not succeed. Let’s looks at how to find a solid idea and then how to validate that idea will sell to actual real live human beings.
You may already have a product in mind, if you do, skip down to the validation portion of this article. (Or, it might behoove you to read the following portion to make sure you were rigorous in your idea selection.)
Are you solving a real problem?
First things first, identify the clear problem that needs to be solved.
In the passion example above about realizing something was making the spelunking experience less great and if there was just this one thing then the adventure would be so much better. That’s solving a problem in a market.
If you want to sell products you have to solve real problems. If others can’t figure out what the need for your product is then you are not solving a problem.
And if you’re not solving a problem then you need to fill a gap – is there some way you can make the market 1% (or more) better with a unique angle?
This would be a pre-existing problem with a pre-existing solution and your addition to the market solves the problem in a better way.
Example of this would be a travel coffee mug that holds heat and keeps the coffee fresher for longer than anything else on the store shelves.
Coffee travel mugs have certainly existed for a long time but they could be better – aka there’s a gap in the travel coffee mug market. Fill that gap and you will be rewarded.
Locating the Winning Product Ideas
Here’s a universal truth – everyday people group themselves together around commonalities and preferences (cars, political ideals, soccer teams, and pop stars).
A good way to use this to your advantage as your searching for that money generating machine is to look at the trends within these commonalities and preferences – find out if more and more people are increasingly interested in something.
Get a pulse for what is popular or trending right now by going to product curation sites like Cool Material, Supercrompessor, and Product Hunt. Use these as a guide to see what people are talking about, what they crave, what they aspire to, are there any commonalities, do any of the products fit within a niche you’re passionate about, just see what people like. Then take that information and look at the data.
Look at growth market predictions through business new sites. All the time Bloomberg or Fast Company and the like are making predictions about what the future holds. Which technologies are the biggest thing. Make note of that and follow the data to see if the buyers are really following those industries/markets. Here’s an example that one of our Enter China members posted within the private member’s area.
Interpret the Data
Once you feel like you’ve found an idea or niche market that looks promising go see what the data says.
One of the best ways to do this is to head over to Google trends and see if the search volume is trending upward.
Google trends doesn’t show the actual volume of search but it does show the search data compared to previous searches for the same term. So you can see if people are searching for this concept, product, or market more and more.
For example I went over to Cool Material and poked around for less than five minutes and found a ring activity tracker. Activity trackers are all the rage with the likes of fitbit et. al, but it had me thinking, is this industry dying out? Is it oversaturated?
So I went over to Google Trends and typed in “Activity Tracker” and this is what trend looked like:
With Google Trends we can see that the peak of interest for the term “activity trackers” was actually this past December (2016). (As an interesting aside do you notice how the term peaks at the end of every year? New year’s resolutions anyone?)
The trend is definitely upward. Although the growth has slowed over time it seems there is no sign of downward movement. This would definitely be an interesting market to present a fresh solution (filling a gap) to the market. Especially with the world’s fascination with wearable connected tech.
After you do this with a few different ideas you’ll have a feel for which market or product niche you’d like to pursue more seriously. At that point find out what the winners are doing.
Who is a winner?
A company selling a product that’s bringing in a lot of money.
How do you find that out?
Here are two quick options.
Facebook ads – type your product idea into the Facebook search bar. Find a post that is an ad or was an ad.
You can tell an ad because typically they will display the product with a link to purchase and has a substantial amount of likes and share. If the product has an unusually large amount of likes and shares most likely the company paid for that post. If they paid money to get the clicks then we want to know if the ad worked for them.
So find a post that fits that criteria and click through to the website.
For example I typed “timepiece” (I’m in the watch industry – this is also great for competitor research) in Facebook search.
Scrolled down to “public posts” and found this ad post
See the 12k likes, 287 comments, and 112 share? AD!
So I clicked the link.
I was redirected to clusewatches.com
Now this is where things get cool – this is the insider knowledge.
I then navigate over to Similarweb.com a website that will tell you traffic volume, referring websites, traffic sources, and a whole host of other information on pretty much any other website out there.
I typed in clusewatches.com in Similarweb and was met with this…
Over the past 6 months they’ve grown from 500k visitors per month to over 1.3m visitors in December!
That means they are the #35,333 ranking site in the world – #4,114 in France for good measure!
But where is all this traffic coming from?
They have a pretty good spread of traffic sources. But over that same 6 month period 13% of their traffic came from social (ADs!).
So what does any of this tell us?
This means that if Cluse Watches is able to maintain their ad spend – which is not cheap – over a 6 month period then it’s probably financially worth it form them.
The market wants what they are offering.
Whatever product you are researching you can use this same trick to see if companies are spending money to acquire customers and if those customers are actually buying (aka companies keep spending money on ads).
Crowdfunding campaigns – another great option for finding products that are winners (again, that means products that are bringing in the big bucks) is to check crowdfunding websites.
This process is fairly simple.
Navigate over to Kickstarter or Indiegogo.
On Kickstarter select “Explore” in the upper left corner.
Sort by “most funded.”
Then pay attention to the kind of products that are doing really well on Kickstarter. Which categories are they in? Do you notice a trend towards a certain category taking the lion’s share of highly funded projects?
Use this to help inform your selection process. Especially if a particular category or product matches up with your interests and passions. Green light!
We actually have a blueprint on Crowdfunding and finding winning products that will raise a lot of money on crowdfunding. It’s the same blueprint I used to raise $85,000 on my campaign, other members of Enter China used it to raise over $200,000 on their campaigns. In the blueprint among other things we show you how to use one tool that will streamline your product research substantially. If you’re interested in that blueprint you can check out the details here.
The last method I want to mention is Amazon. Of course everyone knows Amazon and it’s because Amazon sells A LOT of products. So why wouldn’t we check what’s selling well on Amazon?
Now you can immediately jump to the best sellers but you are likely to be competing with major brands on commodity-like products.
The better approach is to find a niche via the methods mentioned above and then use Amazon to research the sales volume as another form of validation in that particular product or niche.
There is a tool called Jungle Scout (the link is to a video I made explaining Jungle Scout and how to use it) that will show you the sales numbers and total revenue on almost any product on Amazon! This one is a game changer for product research!
Ok, after all that searching around for a product that you are excited to make and release into the world you need to lock down your premise.
What does that mean?
Why is your product uniquely positioned to solve the problem or fill the gap? (share in the comments)
How many people identify with the problem you’re solving? (also, share your answer in the comments)
We already looked at how many people are interested in specific products above. The larger the pool of people identifying with the problem you solve the higher likelihood you will make a winning product.
So go out there and find the winning product ideas and once you’ve got your idea you think is a good pick come back for round 2.
I’ll be sharing everything validation and making sure people will pay money to buy your product!