I’ve met a lot of entrepreneurs who believe their idea will be the next iMac. Optimism is good, but the reality is that 30,000+ new products are launched each year—and approximately 80% fail. How can you beat the statistics? Here’s the secret: strategy. The vast majority of product launches don’t follow a strategic approach.
Below is the process we’ve used to launch several products that brought in seven figures in sales within their first year with a low five figures in capital.
Explore the market.
An important step to testing your product is to test whether a market exists for your product. Ideally, your product targets a niche but is also shareable outside that niche. (Read Seth Godin’s Purple Cow for more insight on this.)
Test your potential target market via pay-per-click advertising. Facebook, specifically, is a great way to test interest in consumer products. Extensive demographic and psychographic targeting options on Facebook allow you to test which groups may be interested in your product. A scrappy entrepreneur could further curb costs by creating their own copy, running ads and developing landing pages.
Read more on Facebook’s Engagement Custom Audience feature.
Find out where your customers are, and then talk to them.
Once you have established the need for a product, research where your customers are and get their feedback. A simple way to do this is through forums, a Facebook group or a site like Reddit. Use a short poll or survey to understand what features your potential customers want to see, what price they would be willing to pay, and what struggles they face with current options on the market.
In our experience, as long as you’re transparent, people are thrilled to see a company that wants their input and plans to use it toward product development.
Turn your market research into a sales advantage.
In a world where marketing is increasingly driven by social influencers, involving customers and applying their feedback is a powerful testament of trust in your business. For example, many of the people who purchased our company Horizon Devices’ debut product, the Precision Drive, did so because they were excited about using a product they helped develop. Community-driven products have a built-in customer base.
Do your due diligence. Use the Internet to test your product and market as much as you can. It’s the best way to save yourself the time and cost of launching a product that doesn’t sell. Is the process fun or sexy? Not necessarily, but it could save you from burning through hundreds of thousands of dollars creating a product nobody wants.
Written for EO by Mehtab Bhogal. Mehtab leads capital raising efforts for Karta Ventures. He has an aptitude for melding unorthodox high-impact marketing with conventional business development.