The Power of Market Validation
The reason these tools have been focused on this question and companies spend tens and hundreds of thousands of dollars doing this research is because there is tremendous power in market validation. As a small business, the value is not simply in knowing that your product will indeed sell, but the fact that you can leverage that knowledge in all of your business activities. Think of some of the key things you need to do:
Funding. If you go into a bank and say, “hey, I need $50k to make my business work, I’ve got a great idea”, you won’t have much luck. If you go in and say, “hey, I need $50k to make my business work, and I know it will because I just sold $50k worth of products without even making it yet”, they are going to be a lot more interested in loaning you money. Same will be true with investors.
Sales: If you go into a meeting with a buyer from Target and say “hey, I’ve got this great product, check it out” they’ll put your product on the pile with all the others to get cleaned out next month. If you say, “hey I’ve got this great product and I’ve sold $25k online and have a list of 500 customers without even starting my marketing push” their ears will perk up and they’ll start talking details with you. Buyers are much more prone to proven products, they want the sure thing.
Manufacturing: As a small business, a lot of manufacturers won’t want to work with you because they think you don’t know what you’re doing, you won’t be able to communicate what you want to make, and the chances of your product taking off are small. Referencing a successful Indiegogo campaign will go a long way to giving them the confidence that you do in fact know some things at least, that you have already been somewhat successful, and if they can make it well, there could be a good future for your product.
Don’t underestimate the power of market validation. It can be leveraged to do all kinds of things. The beauty of these new crowdfunding tools is that they give 3rd party, easily verifiable proof that your product has a viable market.
The best is for you to contact us directly at 949-442-6666 ext 103 or Contactus@CrowdFundingplanning.com