THE DREAM IN ACTION

So, I’ve been focusing on both mastering and minimizing mistakes. Mistakes lead to a less “dreamy” lifestyle, the opposite of what we’re trying to achieve here. If you’ve been reading, you know that I recently closed my first startup, so I am excited to get back into a project. Before I sink dollars and time into ‘the next big thing’ I’ve created 4 simple rules for myself on what I will do before diving all the way in. Pay attention.

No, I’m not just going to ask my friends if they think it’s a good idea, I’m not just going to poll my twitter followers (although I do love you guys!), and I’m not just going to do one Google search (or Bing!) to find the obvious competition. I’m going to force myself to be analytical towards, and skeptical of, the opportunity in order to protect the downside and make sure the option has a runway.

Let me first explain why further precaution is necessary. When you ask a friend “would you buy this product?”, 80% of the time they’re going to say yes. They don’t want to disappoint you and people hate the word, No. Instead of asking ‘would’ you buy, ask them ‘to buy‘, right on the spot. You’ll have a much more accurate understanding of whether or not you have something of value. This is called dry testing and I’m going to try and become religious in using this & similar methods in the future when testing ideas. Here are the 4 must execute steps to how I’ll dry test:

Numero 1: Check out the competition (24 hours)

I’ll post more on market research later but for basic purposes of finding top searches use standard Google searches and Google’s keyword tool. Also, get on the “real time web” and search Twitter for your key words. Once I’ve analyzed my findings I’ll identify the top 3-5 terms and look at the sponsors in Google’s paid ads (look right). I’ll dive into the landing pages of each of these sites and locate the similarities between their pitches and come up with 2-3 ways that my pitch could be better than theirs.

1. Better Service or Quality (like Zappos)
2. Better Price (even if it’s a higher price)
3. Better Experience (make it sexy, see Virgin Group)

Numero 2: Get a site up, think basic (48 hours)

Next I’m going to launch the ‘test’ site that user will eventually be sent to through my ads. I’ll write a sales pitch describing the product, the uses of it, and focus on the value that it brings to the user. I’m not going to reinvent the wheel here and I’ll use much of the existing content from competitors pitches but will be very careful not to plagiarize their content.

This sales pitch will be focus on on 4 things:

1. Getting their attention
2. Keeping them focused on the product
3. Getting them interested in a purchase
4. Asking them to purchase or a call to action

These sales pages, I’m sure you’ve seen them, can be very ‘hoaky’ but they do serve a purpose, funneling people through the above steps to make a sale. If they didn’t work, they wouldn’t exist. These pages are easy to get up and you can use services like Weebly or a even Wordpress to get them up. At then end I’ll make sure to have a “Buy Now” type button so that I can measure clickthroughs. Note, that it is important to have your own domain for this site and it should be descriptive of your product.

I won’t want to miss out on possible sales opportunities if the test does work and the product turns out to be a success, so I’m going to add a form that collects email address on the page after the “Buy Now” button. You don’t have to pay anything to collect this info. Services like Aweber, MailChimp, or Campaign Monitor can help setup a form to collect this info for free and will only charge you to send emails out to the people you collect. Other easy form options are Wufoo and Google Forms.

On the page after the “Buy Now” button you’ll need to explain why the product isn’t there! Try things like:

“We’re sorry the product is sold out”

“The product is almost ready, we’ll notify you when it is release.”

It’s very important to include Google Analytics on the page after the “Buy Now” button so that I can measure conversion rates. Without being able to gather accurate information the test is rendered worthless.

NOTE: It may take more time than stated per step without any technical skills, but these things are not difficult and most of the services I’ve mentioned have very detailed instructions on how to use their service. Just like it’s my job to get people to buy this ‘imaginary test’ product, it’s their job to make their service easy and useful.

Numero 3: Test product with AdWords (24 hours)

This is where the commitment and creativity enter into the test. I will have to spend money on this test, roughly $500 bucks, but the time and money saved is significantly larger than $500. While I definitely don’t consider my efforts in building my first startup, SocialDreamium, a complete failure, I wish I would have spent more time testing the demands of the market.

I signed up for an AdWords account and now I’ll start a campaign. I’ll create at least 2 ads, with highlighted differences so that I will know which works best when I actually begin advertising or building the business. This is where some strategic thinking and creativity really come into play. I’ll need to make sure that my ads hit the same goals that I hit with the sales pitch, only in a matter of seconds.

For my ads, following the standard Google text ad format, I’ll do my best to write an attention grabbing headline. Then I’ll back it up with a 70 character (half a tweet) description of the product. The first half of the description I’ll focus on the benefit of the product and the second half I’ll make the offer clear. Common key words can become expensive because of the competition so niche products will be more cost effective. I’ll set my CPC to $1 expecting to pay about half that per click so I’ll get roughly 1000 visitors out of my $500 budget, a safe sample size to judge my test.

Numero 4: Review, iterate, adapt test (144 hours)

Reviewing the test can be the worst, or most exciting part. How good is the product? How effective were my ads? Was the landing/sales page effective at funneling towards a purchase? There are so many factors that can come into play so a careful analysis of the data gathered through analytics is critical.

Before judging the test as a success or failure I’ll first consider:

1. Were my ads relevant enough? What were my competitors ads saying?
2. Was my sales page effective? Maybe the offer/guarantee wasn’t appropriate to the customers.
3. Or maybe my product idea just sucked.

Remember, discovering that my product sucked and that a business around that product idea won’t work is, believe it or not, a successful test. I will have just saved enormous amounts of time, money, and energy. The process of testing served it’s purpose.

Result

In total the process took about a week or 240 hours of time. I spent about $500 for advertising and $10 for a domain name (I have hosting). What I will have received is a head start on my businesses cost analysis & understanding my Cost-Per-Conversion is huge! This knowledge will help if I plan on pitching the idea to others (VCs, Angels, c0-founders), and it will help to determine the optimal cost of the product.

I should also state that this idea for testing a product or title is not my own. This strategy was first brought to my attention through Tim Ferriss and his book The Four Hour Work Week. His analytical approach to testing and determining results is extremely valuable and I hope that you learn as much as I have from him.

So, I’d love to hear how your tests have gone or what you plan on doing with this testing strategy. This is one of the best ways to minimize mistakes and make sure that a venture is worth chasing after before you sink to much time and money into it. Best of luck!