I spend a lot of time stalking Reddit message boards, also known as a sub-reddits or subs, about entrepreneurship. Some are actual entrepreneurs, others are “wantrepreneurs”, people who aspire to start their own business but haven’t. One of the subs I often visit is called “startup ideas”, and one of the discussions that I’ve seen raised in these subs is the question of “what an idea worth?” Fairly frequently, people say they have an idea, but are very vague about them. When pressed on the details, they’ll often decline to elaborate, saying that they are afraid that someone will steal their idea. But in reality, they have NO IDEA if their idea is anything the world wants or needs. So, the question for today is: how to you know if there is actually a market for the product or service you want to invent.
To me, ideas are aren’t worth all that much. And here’s why. As an individual, it’s VERY difficult to predict how the rest of the world will react to something. I can’t tell you how many ideas I’ve had when I was like “this is it! This is the idea that the world has been waiting for!” I thought coin counting by mail was a really great idea! I was convinced of it! What’s more important than the idea is the ability to test the idea, and when ones shows promise, the ability to execute upon them.
So how do we test? If you’ve heard the Cool Idea! podcast before, both Sully from Bombtech and Steve from Earthtiles had some great advice. If you have an idea, build a landing page, with some pictures or a video, a description of the products, and a way to order or pre-order. Then run some advertisements on google or Facebook. For maybe a few hundred dollars, your idea will either be validated or sunk. If 500 people visit your site, and not a single one places an order, you may have your answer. If 500 visit, and 50 order, you now have validated, albeit on a small scale, that there is interest in your product. The point here is that there is no way to know intuitively whether your idea is a good one, and until you can test it on some real actual people, it’s not worth a whole lot.
So before you go out and take an SBA loan to fund your bright idea, offering them your personal guarantee and pledging your home as collateral in the process, take a step back and do a little experiment to determine whether even a small sliver of the population likes your idea. You don’t need to be a genius to know that losing $500 on some Facebook ads is going to hurt a lot less than defaulting on your SBA loan after your business flops.