How to validate demand in a niche
How do you know if someone wants to buy your product?
Let me be clear here. There's only one way to validate demand in a niche.
Before we get to what validates demand, let's see what demand is not.
- It's not when your friends all say that your idea is amazing / you are accepted into a startup accelerator
- It's not when someone signs up for your waitlist.
- It's not when you put out a tweet and it gets liked.
All of those things are important points of information; and they are valuable signifiers.
Think of them as a lighthouse - illuminating the way for you.
A customer pays you for the product.
They give you the money.
The cash money:
But why is this the case? and why is there so much confusion on this topic?
Well - there are two main reasons why:
- Over complication of the idea validation process
- A desire for people to find alternatives to hard things
Overcomplication of the idea validation process
Think back to the last time you searched up a startup guide or news article in the web.
Most likely, there is an emphasis on starting lean. There are a lot of advantages to this process. The reality is that most startup fails; and the biggest reason why is often the idea.
Therefore, it makes sense to try start quickly and get as many signals as possible to tell you in as short of time as possible if there is a market demand for your product or not.
Now I agree with this.
"But you just told me this isn't true!?"
I agree with the sentiment, but the interpretation is not great.
Think of how everyone else is doing this. The way others traditionally think about doing this is putting together a landing page, put together some words promising a product, and finally a subscriber list.
Now let's see what might happen
- You get 10 emails in a month
Very easy analysis here - it's probably not interesting and/or compelling to anyone
2. You get 100 emails in a month
A little bit more difficult here, it's harder to discern whether or not this is useful. But it could be something useful.
3. You get 1k emails in a month
A bit easier to discern, but what does this really mean? And how should you translate this into actual revenue.
The reality is that people often sign up for things for the novelty of the action, rather than the value they expect to get out of the product.
So what does this mean for you:
Try something different - instead of just asking for a newsletter subscription, go straight into asking for payment.
A desire for people to find alternatives to hard things
You know what's easy?
Slapping together a landing page, writing a copy letter, and making some nice graphics.
You know what's hard?
Doing all of the above, and also building a great product, making nice designs, AND asking for payment.
People are addicted to quick wins. What they want to see is instant results, and they are looking for the type of results that will give the dopamine hit of success.
What they don't want to do is wait slowly, and see the lower conversion rate in asking for payment.
Nor are they patient enough to really see if they are able to earn money from their product.
Here are some quick takeaways for todays product:
- If you want to validate a market - make sure you charge for it upfront
- Don't be afraid of doing hard things.