Product idea proof via first sales

#startup_notes

When you enter a new market, trying to sell your innovative, life-changing product, there is always a step when you must prove your business idea. At this point, you find 10 customers and sell your product or service to them. Yes, like this.

Because, when does your business exist? When do you have a business model or a sample of your product? No!

Your business exists only when you have PAYING customers

That is why what you need to do is to list potential customers who are very, very similar to your Persona. Why do we need to do it?

1) Because it’s a test drive for our product
2) Business is built on the need for Persona

Some entrepreneurs, skipping this step make a huge mistake, especially if they build a product first, investing money and time in it. But then nobody buys the product, it’s so painful. I had such an experience, when we created a new service (thank God it was a service not even a product) for our tutoring platform but wasted money on advertising not even reaching 1% of conversion into sales! I still remember how hard it was to stop ad campaigns because of already happened sunk costs, despite all irrationality.

The good thing is you can use this trick to assure yourself and investors that your business model is sustainable and will not fail, as you have no potential but already paying customers.

The list of actions to be taken:
1) List more than 10 potential customers (better if twice or 3 times more)
2) Contact each of them to validate your hypothesis about Persona’s priority need and other assumptions, specifically:
a) show the product and its features
b) explain when it will be used (Life Cycle Use)
c) Share Value Proposition
3) Ask for feedback, especially pay attention to a negative one
4) Ask if he or she will be interested in purchasing and notified when the product is ready? (Don’t push)
5) Make a list of contacts who are interested
6) Analyse all received information and how to deal with it
7) When the product is ready, try to sell

It doesn’t mean you must sell your product by all means, the idea of this step is to get enough proof that your product meets the needs of the market, so if nobody wants to buy your product or the selling process is too complicated, it might be a sign that you shouldn’t bet on it, or something needs to be fixed.

Also, when I say 10 customers, this number will be different for different businesses, if you sell highly marginal products, you can sell to fewer people.