If you’re a visionary type of person, you probably have new ideas for products and businesses every day. But how do you know which to go ahead with and which would be massive wastes of time? Warren Buffet once said that you can view your life as a 20-slot punchcard, where each slot represents a significant investment you can make. Once you’ve made 20 punches, you’re done. The goal is to fail as fast as possible so you only use up your punches on the winners.
Which business ideas are worth your valuable time, and how can you discern the real gems from the damp squibs? Even before you begin validating your ideas, you should adopt a framework for coming up with them in the first place. This ensures you’re creating concepts within parameters that suit your goals and lifestyle. There’s guidance on how to do this here.
Once you have your great idea, don’t rush into investing in a fancy website, making your first hire, and spending thousands on product research and design. Instead, validate it with robust questioning and testing. After figuring out a system for quickly and reliably validating business ideas, here’s my four-part process:
Your personal attributes are closely linked to the likelihood of your business being a success. Before you go any further, figure out how your idea fits within your skillset and network, if it does at all. Within the insight section are problem, unique opportunity and unfair advantage, and each contain questions to ponder before testing further.
Define the problem you’re solving:
Does your idea or product solve a problem you have a unique insight into? Do you have this problem yourself or do you know people that do? Finding your customers involves knowing their pains inside out and positioning your business as a solution to them. No problem, no customers. Ideally your next venture isn’t a nice-to-have, it’s something a specific audience can’t wait to buy from you.
Establish your unique opportunity:
What makes now the right time for this idea to be turned into a business? Answer the question, “why now?” Why hasn’t this been done before? Maybe something has changed in technology or human behaviour. Perhaps specific markets are about to explode. Figuring this out is key to being relevant or early and not at the cusp or too late, which you definitely don’t want.
Figure out your unfair advantage:
What makes you uniquely placed to deliver this solution? Do you have special access to networks, knowledge or resources? Do you have special skills, access to cash or something that means you can throw more into this than other people? Do you have a personal brand in this space or are you connected with people who do? Ideally, you know the first few people you will chat to and you know the first few moves you’ll make. Use your unfair advantages instead of starting from scratch.
Who is your customer and why are they buying? Too many business owners try to sell what they want to sell, rather than what customers want to buy. Be firmly in the camp of having your products and services hunted out, rather than having to convince people to part ways with their cash.
Define your perfect customer:
Get familiar with the exact avatar of who will buy this product when it’s let loose in the world. Understand who they are, their demographics and the reason they might want it in their life. Maybe this person is based on you, or someone you know really well. Become so familiar with them that you feel like you’re inside their heads and can think as they would. I made a free course on how to do this here.
Understand their problems:
Channel this customer avatar and ask them what keeps them up at night. What are they worried about, what is niggling them, what challenge do they desperately want to overcome? How important is it that they solve this problem? Think about how well your idea or product fits that gap and how confident you’d be explaining it to them. Consider all the reasons they might choose not to buy from you.
Know their hopes and dreams:
As well as their worries and concerns, think about their hopes and dreams. What is aspirational to your perfect customer? Who do they look up to, what do they dream of owning or experiencing and what are they trying to prove and to whom? The more you know this, the more you can talk to the visionary part of their brain and the more they will be excited by what you’re selling.
Telling someone about your idea is great, but showing someone your idea is even better. With the tools at your disposal right now, within a few hours you can have a brand and landing page and look super legit. Create your idea as if it was real and let interested parties register their interest. Of course, you’ll make it clear that it’s not yet available, but seeing who puts their hand up will tell whether your idea is viable.
Buy a domain name:
You don’t have to spend thousands on a domain name. Find a simple URL that doesn’t have to be the .com. If you don’t have a catchy name for the company or product, just use a describing term for what it does. Head to GoDaddy or 123-Reg, find your domain and buy it for one year. When you make your site on Carrd (explained shortly), you’ll attach this domain and be good to go.
Create a brand:
Head to Looka and type your brand or product name as well as a simple explainer of what it does. Use ChatGPT to find multiple slogans. Choose from colours and icons to make something that looks legit. Looka let you download the brand kit for a very low cost, especially compared to a human graphic designer.
Make a landing page:
I love Carrd for simple landing pages with simple forms that let you communicate key information, establish interest and collect data from those interested. This doesn’t have to be complicated. If a visitor completes your form, they are interested. If they don’t, they’re not. Explain the offering, add some bullet points that resonate with your target audience and make the form super simple. Here’s an example. When someone completes the signup form, the thank you page can make it clear that it’s not available yet, but they will be the first to know when it is!
By now you have your idea sorted and you’re confident there’s a market for it. Not only that, but you are uniquely placed to launch this business with your existing resources. You’ve thought hard about what your audience is looking for and you have a brand and landing page ready to test. Here’s where you put this page in front of people and get some real data.
Ask your friends:
Getting feedback from your friends and network can be hugely valuable, especially if they’re in your target audience. While you’ll likely get detailed, qualitative feedback, it might not be truly honest or unbiased. After all, they might not want to offend you and they want to see you succeed. Ultimately, your success will be underpinned by your ability to reach new audiences so don’t stop at your friends and existing network.
Run Google Ads:
Decide a budget and set up some Google Ads. If you’re familiar with the platform, dive right in. If you’re not, use Google’s wizard to get some help. Remember that Google is happy to take your money, whether or not your campaign is any good. Ideally your campaign bids on the phrases and search terms you think your audience will be searching for, so get an idea of these first or ask Chat GPT to suggest them for you. Use a catchy headline, include a value proposition and link the domain you just made that is now connected to your Carrd site.
Advertise on Reddit:
Reddit contains a mountain of value for people looking for products and services just like the one you have thought up. Search on Reddit for subreddits that group discussions on specific topics together. Create a list of 6-10 and write them down. Next, head to Reddit’s advertising platform and register to get their $100 joining credit (correct at the time of writing). Create an audience based on the subreddits you identified, specify the location and make an ad containing you value proposition and link. Test with a small daily budget until your free credit runs out.
Post in forums:
If you’re already in forums, ask for feedback on your idea in there. Make sure you follow the forum guidelines so you don’t get kicked out. You will likely get honest feedback from people who don’t care about offending you, and if your idea is valid, you’ll start to get signups to your page. Find Facebook groups and Discord communities of people who match your target audience and assess the feel of the group before sharing your link and asking for feedback.
Over to you
Do the above in order then commit to a phase of testing where you experiment, assess and keep track of the number of signups you get. Measure this as a raw number and as a percentage of people who view the page. If you’re unable to gain traction using the above framework, you need to adjust the offering, the messaging or the audience. If it’s still not working, it’s probably a sign the business isn’t right and might not be the best choice to proceed with.
The brilliance of this method is that you get fast feedback. You can test your idea in the real world and know within a matter of days whether you’re on to something. Equally, you’ll know if you’re not. While that might be tough to hear, it’s better to learn that after spending $100 instead of after you’ve built an app, complicated website, or labour-intensive prototype.
Remember, you don’t have to do this all yourself. For the data collection phase especially, there are people on Fiverr or Upwork who can handle these tasks for you. I used a Reddit specialist to seed the link in 5 different places and a Facebook community specialist to post in some groups.
Use the data to decide whether this idea will be one of the 20 punches you make on your punchcard, and good luck.