How to Validate Demand for Your Product | Hacker News Reader

How to Validate Demand for Your Product

upupgrow.com

262 pointsmike247741 comments

I didn't write my book on how to break into consulting until I validated demand. Here were my step:

1. Write up a table of contents

2. Throw up a quick landing page on unbounce. This was the page I used http://unbouncepages.com/become-a-freelance-software-consult... (but I did a 1month trial of Unbounce premium so I could cname it to codeforcash.zackburt.com)

3. Bought traffic on Reddit ads (/r/programming) and Facebook (programmers in USA). BTW, two young kids (a college student and a recent graduate) commented on my Facebook ad to bash me. The ad performed better after their comments.

I got email signups from Reddit at $4.50 net Cost Per Lead and from Facebook at $6.50 net Cost Per Lead. I spent a total of $100 buying traffic before I sat down to write the book. Although there was no way that 100% of the emails would convert to sales, (ultimately, about 35%+ of them did so far), it was clear to me that there was a potentially scaleable marketing channel (once I optimized the ads to drive down cost and improved conversion rate on email -> sale). That, and people on HN constantly ask how to break into consulting, so I also intuitively believed in the market.

But these days I am reluctant to dive into anything unless I know there is a repeatable sales process. I qualify potential startups as employers or clients based on this belief – I don't want to waste my time and I don't want them to waste theirs. I've been burned WAY too many times by startups with products or services that haven't been proven to have economic demand. Let people vote with their wallet not their mouth.

Where can I find your book? The above link does not work.

Link's in my profile!

Bought your book. Would it be possible for you to also create an ePub version of the book or would that be a lot of work?

I read eBooks on my eReader and therefore ePub is my preferred format.

Sent via email.

Anyone else: Send me an email please. I will send you the ePub.

My non-Amazon publishing partner, Draft2Digital, handles distribution to nook, iBooks, kobo, Scribd, tolino & Page Foundry. They perform the ebook conversion.

I will reconfigure SendOwl so that instead of buying the PDF, you're buying the bundle of pdf+mobi+epub, that way everyone gets all the formats. Thanks for the feedback + inspiration to improve.

Excellent, thanks :)

Thanks for sharing!

Do I interpret your numbers correctly in that with the $100 budget and about $5 per lead, you generated just 20 leads, of which about 7 finally bought the book?

You're welcome!

That's approximately correct. Most of the purchases were via Amazon (30% royalties on ebooks >$10, 70% royalties on ebooks < $10). I am experimenting with squeeze page marketing etc. now in order to get the economics fully online

>But these days I am reluctant to dive into anything unless I know there is a repeatable sales process.

Exactly. If you're incapable of selling the product, it doesn't matter how much demand you think there is; you're still going to end up wasting your time.

Myself and other people in my shared office have started taking this up a level: can you find an affiliate program that involves a not-too-different product?

If so, can you sell it?

The aim isn't to make money from the affiliate program directly, breaking even or running a small loss is fine; the aim is to find out whether it looks like there's a business in there and you yourself are capable of marketing it and you can make sales.

Superb comment BTW, thanks so much for sharing a real-world example!

I feel like you're hinting at something I felt myself after failing to find a market for a service I spent a lot of time on. That is; pivoting to selling and marketing products others have created, and away from product creation myself. If in the end it all comes down to marketing and sales, why waste time on the creation part?

I found this realization to be profoundly depressing. I'm curious if others have thought this as well?

>That is; pivoting to selling and marketing products others have created, and away from product creation myself.

One major flaw of affiliate marketing is that, by and large, it's hard to maintain a marketing relationship with someone else's customer.

That is, once you've made the sale, that's it, and you never hear directly from the customer again. Sure, depending on what you're promoting and how, there may be angles - look at what TheWirecutter.com has achieved! - and yet the fundamental flaw remains.

(The other angle is that you're leaving money on the table by promoting other peoples' products; why not investigate using your sales and marketing talents to take on the other side of the business as well?)

Affiliate marketing is very different from owning and marketing your own product.

For starters, you have next to no control unless you are a major source of revenue for the merchant. This is a huge risk factor. Just ask everyone who got slaughtered on eBay's program when they decided they wouldn't pay a flat $25 CPA for new sign ups who purchased. Businesses lost major revenue overnight.

You also have lower margins and often can't use similar marketing tactics because in many programs you need to land the last click to get credit. That often rules out display, video, mobile in many cases (if the final sale happens on desktop you won't get credit), etc.

Lastly, you are competing with every other affiliate. So instead of having an affiliate program that serves as a force multiplier for your business, you are competing for table scraps, often for only 10-15% of gross revenue as commission on many programs.

So all of that said, affiliate programs can be great to vet a product space. You might get some small sense of market sizing, pricing, positioning, etc all from reviewing competitor program's terms and details.

If you like the post, I recommend you to read Start Small, Stay Small: A Developer's Guide to Launching a Startup[1] by Rob Walling.

> "Start Small, Stay Small also focuses on the single most important element of a startup that most developers avoid: marketing. There are many great resources for learning how to write code, organize source control, or connect to a database. This book does not cover the technical aspects developers already know or can learn elsewhere. It focuses on finding your idea, testing it before you build, and getting it into the hands of your customers."

[1]: https://www.amazon.com/Start-Small-Stay-Developers-Launching...

Heh.

That article ends with "My online marketing course is launching soon. Buy now and get the early bird discount ($155 saving)"

Like hell it is. He is doing the classic testing of demand. No class exists, but if enough people sign up then he will create one.

Nice catch!

a thread with 140 points is not really a good gauge for demand

besides the n.1 issue in doing demand validation is "people will say they're interested into something but when asked to put money down very few do it"

crowdfounding is a very good way to get people to put money down, but you need a huge reach for it to be a valid metric.

other than that, it's mostly luck and bullshit.

>> a thread with 140 points is not really a good gauge for demand

It's a much stronger signal than 5 threads with zero upvotes!

I wish there was more detail about the pain-point-finding process. As is, simply looking for examples of current pain points is very prone to cognitive bias -- if you go looking for a pain point, you'll find one, but how do you quantify the intensity of pain and willingness to change solutions? Maybe more of an overall competition-assessment strategy (rather than a specific pain-point-search) -- if you research the current shortcomings AND high points of current solutions you'll have a much better understanding of the value your product can add.

I think you have to talk to as many people as you can about this pain point. They should not be friends or family. They need to be at best acquaintances. You want honest feedback from people who don't care about hurting your feelings, only what they need for their business.

How big of a pain is it? Does your idea solve that for them? How much would they pay for your service over what they use now? Can you make switching cost effective? ....

It depends on your approach - if you come up with an idea, then go looking for people to confirm it is a pain point, yes, you may end up being off. But if you simply identify a market you want to help, then go ask people in that market what their biggest pain points are, your should end up with a valid list.

If your product can be crowdfunded on kickstarter/indiegogo I think it is a great exercise to get you to think critically about your product and validate demand.

Thanks for sharing. This is really helpful. Has anyone else done this before? If so, I would love to hear other methods.

Yes I have used similar methods. In addition to using generic, relevant searches on Google, Reddit, etc., I did competitor searches looking for discussions about them. That helped me figure out which competitors were most popular. Typically people would discuss what they like or dislike about them which helped inform some product decisions. In my case there seemed to be some dissatisfaction with existing solutions and willingness to try new products which suggested there is demand.

I let this tab open on my Chrome and it just used 3GB of data, 97% of CPU after some time. Is somebody facing the same?

Hey there, author of the post here. If anyone else gets this can you let me know? Wondering if it's the image size on the header..

If you know how to debug let me know as well :)

Got the same 6GB of RAM 99% CPU, didn't debug why yet.

Pegged CPU with FF 51 also.

Yeah I had a similar problem, my cursor was also jacked on the page. had delayed scrolling and could not click on links. Had to refresh the page.

Thanks Mike! So, seems like it increases both disk and cpu use after some time. If the user just read the article and go out I don't think that they saw it occurring.

And thank you for the article. Simple, well written and right on point. Keep it going ;)

Gray color fonts on gray color background. It gives too much strain to my eyes and makes text unreadable.

Please check this out : http://contrastrebellion.com/

I would invest in a weed ETF. How would you even go about setting that up? Let me know when it's available!

Hey, thanks for the feedback! We've got a simple landing page up right now where you can sign up for early access -- cannectcapital.com

I'm trying to build a tool for analyzing cannabis stocks and choosing an investment strategy. But in the meantime I've got a Google Sheet I'm using to track them - https://docs.google.com/spreadsheets/d/1X2cwnwmzgdRfuy0yiPo6...

Would love your feedback! And happy to answer any questions about it.

Put in my info. I'm doing a little bit of research on setting up an ETF. It seems like there's quite a bit of paperwork and cost involved. How close are you guys?

Huge understatement.

https://www.sec.gov/Archives/edgar/data/1579346/000119312516...

Among other things, you just need to prepare one of these simple forms and get it approved by the SEC...

A few tens of thousands of people searching doesn't even come close to the level of demand to make such a thing worthwhile.

how many would you need to make it worthwhile?

I'm curious, how'd you compile the list of stocks?

I found a site that listed all the stock tickers and threw that in Google Sheets. But I forgot the exact site. Definitely missing a few stocks (especially Canadian ones) at this point..

Just invest in Yum Brands (NYSE:YUM) and GameStop (NYSE:GME) as a proxy.

Ha! As a similar investment strategy I've heard of folks investing in Scotts Miracle Grow. But also heard from a guy in the grow op industry that no one uses their products so it's mostly hype.

Paid traffic from facebook and call to share if liked - one of method to test idea also

Nice article! Good breath of fresh air from the fluffy blogs out there.

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