I attended a start-up course by CEED last month and one of our mentors, Jaka taught us what I consider the best way to almost effortlessly (and completely free) test whether you can actually make money off your idea.
First, you need to think who your target customers are (doh!) and pay a couple of them a visit. After explaining your idea, (here comes the magic) ask them a simple question: Would you give me $10 right now for an early access to the application I’m going to build?
If a significant percentage of the prospective customers actually gives you the money – you have a market!
Of course there are two rules to this approach:
- be honest to yourself
- avoid friends and family
Be honest to yourself
It’s easily to get carried away by the enthusiasm you’re feeling and selling to your prospects, so don’t try to play dirty mind tricks on them, unless that’s your strategy even when you have a real product. Give them the facts, listen to their feedback and see whether they open their wallet. And have a significant representative sample, visiting 3-4 people will probably not suffice.
Avoid friends and family
This one should go without saying, but your mom will always support you – and so will your friends. Avoid both if you really want to get unbiased responses (and you do).
Of course this approach doesn’t work on all ideas and there are always exceptions so I’d say there’s one rule which is equally important: Trust your gut feeling.