How To Evaluate Market Demand For Product Idea

You need to systematically test market demand for product idea and, if possible, validate your customer. This will help determine your idea’s viability and give you the confidence to proceed.

Start with the following:

1. Market Research:

Everything from trends, technology changes, macro- and micro-economic aspects, target market research, segment profiles; legal regulations, etc.

2. Competitor Analysis:

Learning competitor ‘best practice’, their pricing strategies, customer relationship management, etc.

3. Pre-Project Customer Validation:

Getting a feel for market demand before starting the business. This can involve surveys, getting feedback on mock-ups, testing market demand from landing pages, etc. This sets the stage for developing your Business Canvas Model and Minimum Viable Product (MVP)

4. Financial Models:

Develop some basic financial models. Don’t bother with arbitrary 5-year projections, but you need to costing and break-even analysis for the roll-out of your MVP.

5. Development of the initial ‘Business Canvas Model’ and ‘Minimum Viable Product’. This will, of course, change, but need to have a starting point

6. Customer Development Methodology:

They need a plan on both the marketing strategy to engage potential customers as well as how they intend to manage this engagement data i.e what data are they after and how will they collect and track data? This again can change but it requires a starting point

7. The project plan for the implementation of the MVP. This needs to have clearly defined objectives, a time frame for roll-out, etc.

An example of a straightforward pre-project’ customer development methodology is as follows:

1. Perform market analysis and competitor analysis on the intended app stores. What is trending? Do you have competitors? If you have competitors, get their apps, and determine what features they do and don’t have;

2. Develop mock-ups and designs of your intended site or app (your ‘Minimum Viable Product’);

3. Have people, those you can trust to be unbiased, have an initial review of your MVP and provide feedback on the idea;

4. Target specific market segments and get their feedback on your MVP. You could also develop a survey from Survey Monkey to analyze their preferences & habits in relation to your product;

5. Develop a landing page that contains details and invite them to subscribe in anticipation of the release. Drive traffic via free sources (i.e. Reddit) and paid sources (i.e. social media advertising) to the page and get some idea on the interest. This also gives you an email list to market to on launch day.

Source: QUORA