How Do You Know If You Have a Good Idea? Try These 3 Tests.
By Stephen Key
That’s the million-dollar question, right? But does anyone really ever know? I’m not sure.
In January, I received a product in the mail from someone whose name I didn’t recognize. When I opened the package and saw what was inside, my gut told me right away, “This is a winner.” I was so sure, in fact, that I immediately called up a good friend who’s always looking for new ideas to tell him, “I’ve got one!” Fast-forward to today, and this product is selling extremely well.
So, how did I know that entrepreneurs Michael Sturba and Rachel Duguay had a hit on their hands with their product MicroPuzzles, colorful miniature jigsaw puzzles packed in test tubes?
Well, for starters, it was unusual. The attention to detail and professionalism of the packaging stood out as well — the test tube factor was unique and cute, the label looked like it had been applied professionally, and the top cap was even personalized with the company’s logo! In every way, it looked ready to ship. And so, my entrepreneurial mind started racing. Because of its small size, it could be placed at every cash register imaginable.
Related: Report: 52 Percent of People Ask Themselves This Question Before Pursuing an Idea
Michael and Rachel — who have been running their business out of their home in Anaheim since 2018 — didn’t reinvent the wheel with MicroPuzzles. There was no huge wow factor. But its potential was solid.
So, do I think I know when I see a winner? Absolutely not. When anyone tells me they can, I have to raise an eyebrow. No one has a crystal ball, and consumers are fickle.
The good news is that the market will give you the feedback you need, and there are ways of testing the market before spending a lot of money or time.
Here are some of my favorite ways to test the waters when I have an idea for a new product.
1. Create a one-page advertisement
The simplest way to test your idea for a new product is by creating a simple one-page advertisement. I call this a sell sheet, but essentially, this is your marketing piece. If you don’t have a prototype, no worries — you can use 3-D computer-generated graphics.
More important than the rendering of your prototype is your one-line benefit statement. What is it about your invention that will cause consumers to care? At this point, your goal is to sell the benefit of your product idea — not the prototype, not the product itself. Is anyone actually interested? You need to know.
You can show your sell sheet to companies looking for ideas and even buyers to get a read on their level of interest in carrying it. You could also show it to a distributor to see if they would carry it in their line.
Related: 100 Businesses You Can Start With Less Than $100
This strategy takes away the risk of wasting your resources on an idea that is not marketable because you can get a sell sheet made very affordably. So, if after you’ve shown your concept to 30 companies and maybe a few retailers as well, and no one is interested, that’s okay — you haven’t spent a lot of money or time. If your point of difference in the marketplace is just not strong enough, you might decide to walk away from the idea entirely or redesign it.
Unconvinced by the feedback you receive? Keep testing the waters with your sell sheet.
2. Get some orders
It’s never been easier to test the waters this way because you can target potential customers very specifically using a Facebook ad. Design a dynamic one-page ad and place it on Facebook. Does anyone click? Make sure the ad is simple and compelling. This will help you gauge interest in the product, and is exactly how As Seen on TV companies test potential new products these days. I mean, you can target older men living in Kansas City who love fishing! If you get a lot of traction, now you have some proof of demand. Proof of demand is a very helpful asset that takes away risk for you, potential licensees, and even investors.
There are a lot of marketers who specialize in this, so there’s no excuse for not learning as much as you can about conducting a successful Facebook ad campaign.
3. Test at retail
The best test of all is still selling at retail, which could include a county or state fair — basically, anywhere you can interact with the public and pitch your product for sale. When people pull out their wallets and fork over cash for the product, you know you have a winner.
Selling on a street corner is how I learned to create products that sell. I would make things during the week, and then sell them on Saturday. I’ve also tested products at retail using a custom display. In fact, that’s how I tested the market for my Hot Picks guitar picks and scored 7-Eleven as a retailer.
Related: 5 Science-Backed Ways to Boost Your Creativity
If I had walked into 7-Eleven’s corporate headquarters and shown them my uniquely-shaped guitar picks, they would have laughed me out of the building. Guitar picks at a convenience store? But I knew my picks were for music fans, not players, and that market was huge. So, I convinced the owner of my local 7-Eleven to display the picks at the register. When I returned on Monday, they were sold out. Had we sent our friends to purchase the picks, the regional manager wanted to know? We ran another test, and then seven more. The picks sold out every time! Eventually, our picks were sold in 7-Elevens across the country.
You can run tests in retailers using graphics only, another strategy I used to help me get the guitar pick business off the ground. To learn which pick designs customers liked best, I had a local music store display images of potential picks and ask people to vote which one was their favorite. This provided us with priceless feedback before we invested in an initial run.
Producing enough product to sell at retail or any other venue can be expensive and difficult. But, if you can produce a limited quantity regardless of the price point and get test results, it’s a goldmine.
When you have the right product at the right price point at the right location and people keep on coming back to re-order, that’s when you know you’ve hit on a winner!