How to test the viability of your online business idea

I tried exactly the same approach (based on the Lean Startup blog) but I got burned: Google Adwords banned me for life. Seriously! I tried to create another (unrelated) campaign and created a new user for that, and they still blocked me (I guess they are able to track my name through my credit card).

Anyhow, to this date I don't know why (they never explained, and they were quite rude and abrupt on the email). I believe it was because they found out that I didn't actually have a real product. I analyzed the access logs and I believe they actually verify the sites by hand before approving the ad.

In summary, be careful when you use Adwords without a real product.

The problem with this approach is that it doesn't necessarily tell you anything about the market for your product. It only tells you whether or not you understand how to market or sell the product effectively over the web. Your first attempt at putting out a sales page is likely to be abysmal, and through continuous refinement you will get to a point where you can effectively convert people.

I think the approach presented in the four steps to the epiphany is superior. Get out of the office and go talk to people who your solution will help. Find out what they need. Find out what things would make them buy and what things they don't care about. Talk to about 20 of them, and you'll get a pretty good idea what they are looking for.

Seriously, instead of wasting your money on a poorly optimized ad campaign (that may even get you banned for life from adwords - see comment by fluxcapacitor) take that money and go buy "the four steps to the epiphany" on amazon, and then read it! If you want an even quicker and simpler intro, get the ebook "Entrepreneurs Guide to Customer Development", it is based on Steve Blank's work and it is well worth it: http://www.custdev.com/.

Overall those books will pay you back much more thoroughly than a hacked out adwords campaign ever will.

Starting a business is about understanding a real business need, finding out who has that need, figuring out how you get in front of them, what will they pay for your solution, and then how to repeat that process on a regular basis. Oh, and it is almost certainly going to take more than four hours a week to do that.

Context:

I am preparing some presentation for an Ignite event and I asked my future audience which topic they would like me to cover.

I decided to blog about the topics that I won't be presenting at the Ignite event.

This is an old trick.

It works much better to test the viability on people in your social circle than random strangers on the internet. Cheaper, too.

If you are trying to sell to people entirely outside your social circle, the probability is that you don't know enough about the field to penetrate it - not without a lot of extra effort (compared to something you know about). It also drastically increases the likelihood that your brilliant ideas are moot or unwanted. Yes, you could find that out this way, but you might not - you might not even know what search terms to use, or the ads for them might be very expensive.

If you don't have a social circle, ditto.

FTR, I pre-launched Freckle exclusively to our blog readers/twitter followers and we got 900 email addresses, which led to $1300 the first month post-30 day trials, never spending a penny or chasing after random strangers on the internet. Doing the same again for Charm (http://charmde.sk).

I'll be writing about this specifically in the next week over on my biz blog, btw: http://unicornfree.com