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One of the most important ways of validating your idea is by using a landing page.
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So nowadays if you see any digital product or even real products being launched you'll see you know
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six months in advance or three months in advance
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people will create a landing page like so.
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So this is the one for a London based app called Great little Place.
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This is one for Robinhood which is a zero commission stock brokerage.
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And the thing that you notice that's common to all of these is that they have this box that allows you
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to put in your email address
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and it says "Be notified when we go live."
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And the reason why this is really important is that you can demonstrate that there are people who are
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actually interested in your product.
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This is way before you put down a line of code, way before you even you know put in any investment.
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And in fact this is our Aaron Patzer who is the founder of Mint talking about how he validated the idea
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of mint.com before writing a single line of code or before putting in any work by just seeing how many
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people will actually sign up to this page.
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And it's so true what he says.
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A lot of people are obsessed with this idea of getting the product out there just make a prototype really
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really fast and try and you know be first to market.
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But actually there's no point doing it until you know that there's people who are interested in your
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product.
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Additionally you'll have a bunch of people who are ready to download your product, who can receive an
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email telling them that your product is ready and they will be the most likely people to download your
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app or buy your product.
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Now there's a number of ways of doing this type of idea of validation.
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And there's companies out there which specialize in this
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for example QuickMVP which allows you to essentially set up your landing page and start driving
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traffic to it
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and looking at conversions etc. But I'm going to tell you about a cheaper way of doing it and a lot
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more flexible.
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So the idea is that you have a landing page that you've set up that's super simple basically just you
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know a heading with a little bit of branding telling people what it is that your product does how it's
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going to help them.
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And the most important thing is this box here, just a place where they can put down their email address
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to be notified once it is ready so that you can collect a large list of interested people and you can
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hit them up on the day of launch.
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Now in order to drive traffic towards this landing page you're going to use either Facebook ads or Google
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adwords.
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So people would see your ads in their feed
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and again it would be you know something catchy that drives them towards this page makes them want to
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click on a button like check it out now or by now or sign up now etc..
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So in Facebook ads you can set up what that button reads and depending on what it reads it will change
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your conversion rate.
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For example buying now will have a lower conversion rate i.e. less people clicking on it than
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something like
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Find out more.
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But it does also mean that the people who click on buy now are telling you an intention that they will
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buy it right?
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So these are a lot of things to experiment about and to implement it iteratively so that you can see
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what works what doesn't and improve on it day by day.
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So with Facebook ads you get a whole load of metrics.
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You get to see how many engagements there are i.e. how many people clicked on it and how many people
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interact with it and sometimes in Facebook I mean post engagement can mean just that when people were
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swapping on the phone they paused for a little while on your ad that counts as an engagement.
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So if you ever wonder you know why it is that you see more of certain friends post on Facebook it's
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because Facebook has algorithms that detect what you're interested in.
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So you know for these wedding photos, for baby photos, they get a lot of likes
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immediately as soon as the person posts it and that's flagging to Facebook that this is really interesting
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content.
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And also you know when you're scrolling through Facebook and you see a post from your ex or you know
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from your crush and you pause on it, that pause also signifies to Facebook that you're interested in
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this person's content.
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So that's what post engagement can mean. People who paused on your ad or people who clicked on it or
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people who liked it or commented etc. And depending on how you set up your Facebook ad you can gear
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it towards different things.
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So what we tend to say is that for the sole purpose of idea validation what you want to do is set up
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automatic bidding so that Facebook automatically calculates how much you should bid for this ad placement
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because there's loads of people who are looking to take up that ad space and they look at the bids of
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the various adverts and the one that's highest gets the spot essentially.
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Now the other thing that Facebook tells you about is reach which is you know when you're scrolling through
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the desktop version you'll see the ads popping up in the right
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and when you're scrolling on mobile they'll just flash through in the main timeline. So reach is how
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many people potentially saw your ads.
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So now you have a metric between reach and post engagements or click through.
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So if you calculate that as a percentage,
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so for example 3000 divided by 80000 that's about three or four percent engagement out of all the people
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who saw your ad for in a hundred people actually interacted with it.
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So by looking at some of these metrics you can already start to interpret how much interest is there
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in what it is that you're trying to sell or create.
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So for example, if you create your ad in a really simple way with an engaging image and with a few sentences
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that describes what it does or what problems it solves for the user
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and you see just how interested like if a thousand people saw this ad how many people would actually
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click on it.
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As with any sort of ads you do have to iterate through it.
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So don't just create one ad like this, but create you know 10 or 20 and see which one performs better
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because depending on the images that you use depending on your wording, people will have different rates
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of engagement.
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So try and optimize that
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and then look at your best performing ad how many people are clicking on it after they've seen it.
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And that's a good indicator generally of interest in your product.
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Now you don't have to just stick with Facebook.
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The other option is using Google Adwords and this is basically the part that appears in the sponsors
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sections which is usually at the top currently in Google. And you can target particular search terms.
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So for example this person's search for Bangkok hotel reservation and you can make sure that your particular
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website shows up first for those search terms.
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Now it works in a similar way to Facebook ads. You create your landing page that has the all important
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email collection box and then you drive traffic towards it through these Google sponsored link.
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So target those search terms like you think your user might be looking to solve.
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Really think about those search terms.
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For example if you're creating an exercise app or an exercise regime, people might not necessarily search
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exercise regime or exercise routine.
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They're probably more likely to search for the outcome which is weight loss or body building.
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So essentially you know gear your key words towards the positive benefits that people get rather than what
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it actually does. With a really minimal budget like a $100 you can get some really interesting data.
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Essentially what you want to look at is this kind of funnel.
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So you look at the number of impressions, so say 100 people saw your ad
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how many people actually clicked on that ad and then you got maybe one sign up out of it and that's
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about a 1 percent conversion which is okay.
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But on the other hand if you had data that looked more like this where out of 100 people who saw your
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ads maybe 10 people clicked on it and then you have 9 sign ups, that becomes really interesting because
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that means that there's a lot of people who are incensed to take action.
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And this is a more favorable funnel than the previous one.
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So I would say that between the tier 1 impressions converting into clicks is interest in your ads.
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So a lot of this depends on how well you word your ads, how-- what kind of images you're using et cetera
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so that you grab attention. And it's really this step where you turn those clicks onto your website
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into sign ups that really demonstrates how much interest people actually has in your product.
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So if you're looking at this step, you know this is a 10% conversion from 10 clicks into 1 sign
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up which means you know if there were 100 clicks and there would be 10 lineups compared to something
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like this where there was 90% conversion from the people who visited your landing page into sign
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ups which demonstrate just a higher level of interest in your product rather than in your advert.
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So essentially what we would recommend is put on Adwords campaign or put on a Facebook ad depending
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on your niche.
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So with Facebook ads you have a real ability to really target your users.
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So depending on what your product is say if you are targeting single women or single men or people who
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were recently engaged. So say if you're a wedding photographer and you're selling your services on Facebook,
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you can actually target the people who've recently changed their relationship status from single to
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engaged. And by showing the ads only to those people you can guarantee a much higher conversion rate.
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So whereas on Google it's more about their search terms,
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what are people looking for that you can help them with.
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So it's a slightly different set up and depending on what it is that you do one will probably be a better
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use case than the other.
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So usually what we say is set a max budget of say $20 a day and use automatic bidding, maximizing click
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through.
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So this is what you want. You want to channel people from Facebook or from Google onto your landing page
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so that they can read what your product is about and then demonstrate whether they're interested or
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not. So usually you know if you start with a maximum bid per click of about 50 cents and then you can
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raise that bid by 25 cents every two hours or so if you're not seeing much activity until the point
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where you start seeing click through.
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And then at that point to stop and observe to see whether if those clicks are turning into conversions
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i.e. whether people are giving you their email.
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So this is actually a really cheap way of testing and validating your concept. In the next module we're
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going to talk about how you can create these landing pages very very quickly pretty much under
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an hour and then you spend another hour setting up your ads.
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And that's two hours plus maybe $100 and you would have saved yourself hundreds hundred thousands of
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pounds of investment in something that may or may not work.
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I mean obviously if you validate your idea it doesn't mean that you're going to be the next unicorn or
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you're not you're going to be the next Facebook.
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But it does mean that you have a significantly higher chance of success if the data shows that there's
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a lot of people who are interested.
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So in order to reduce risk in your startup or in your business, always go with data rather than go with
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hunches.
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So another variation on this type of idea of validation is slightly more aggressive and it essentially
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relies on this fact that you know even if people put down their email, that doesn't mean that necessarily
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you know come launch day that they will actually buy it or that they will actually download it.
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And in order to have a higher percentage accuracy in your in the validation of your idea you need to
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somehow see if people are willing to pay for it.
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There's no point building a product and then later on finding out that people are interested in using
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it but they're not interested in buying anything from you
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because in order to sustain yourself you need patrons.
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So essentially this takes that email box where people demonstrate interest just one step further and
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see if they're willing to say you know shut up and take my money.
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So the key difference is in your landing page. Essentially you still have the same cell where you say
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"My product is so awesome,
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It does this. It helps you with that." Whatever it is that you believe that your product can solve or can
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help people.
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And then importantly at the end instead of having an email sign up box you actually have a "Buy now!" asking
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people to commit straight away.
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Now you know and I know that your product doesn't exist and that's fine.
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It's just about getting a confirmation from the user that they actually would pay money for this.
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You know, you're not worried about pricing right now you're not putting you know putting down something
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like buy now for $5 or buy now for $10.
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It doesn't matter.
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It's just about asking the user whether if they would pay for this product.
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Now the problem that you'll see is that what happens when they click buy now when you don't have anything.
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Well usually what people do is say that you know it's out-of-stock if it's a physical product or that
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if it's a digital product you have like a limited release or a rolling release of beaters
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and they can sign up when the next batch is available essentially.
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So yeah. It's a little bit disappointing for that user who would want to buy it but at the same time
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it means that you can demonstrate that there are people who are willing to pay for this product then
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you will actually go and create it for them and then this is the part where you put in that email box
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so that they can be notified when it's available.
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And the funny thing about humans is that we really like to be consistent, internally consistent.
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Now this is probably not going to be the first time that I'm going to mention that. Knowing a little
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bit of human psychology knowing a little bit about you know the cognitive side of how we work, is really
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useful for understanding human behavior.
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So one of the things that you'll notice is that humans really like to be consistent. And that means that
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if they clicked on a button that said "Buy now" their brain is saying "Oh I really wanted this thing because
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I was willing to pay money for it." And that means that when you next confront them with an email sign
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up box because it's not yet available
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you have a much higher chance that they'll actually put down the email and want to be notified when
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it is available.
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And indeed sometimes you can get people who are really upset and angry that it's not immediately available
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right there.
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So this as I said is a little bit more pushy of a tactic in terms of idea of validation.
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But the reason why I'm telling you about it is because it does give you better data.
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The people who are willing to click the buy now button are markedly different from the people who are
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willing to put down their email.
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So essentially that would be a sales conversion rather than just a sign up conversion and it will give
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you a better indication and more accuracy in terms of how in demand or how much people would actually
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want your product.
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So I would highly urge anybody you know if you're launching anything just you know it doesn't matter
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like it could be a bricks and mortar shop,
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just try and maximize your chance of success by figuring out if there is actually demand if people actually
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want your product. And it doesn't matter if it's an app or if it you know a shop or if it's a product.
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Demonstrate that demand first before you sink in all your time and all your money. It will be infinitely
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worth while.
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Don't go down the route that everybody does where it's like "I need to create this right now because
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XYZ is going to come in and they're going to make a much better version of it.
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Or like you know somebody else is going to catch on to this idea."
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In my experience and barring the experience of a lot of people around me, it has always always been worthwhile
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taking the time.
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It can be anywhere between one and six months of idea of validation just to ensure your chance of success.
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I think you know a lot of times starting a startup is like playing the lottery and you probably have
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lower chances of winning at startup than winning the lottery. But doing idea of validation doing that
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bit of research is the equivalent of say buying a thousand lottery tickets compared to just one.
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Even if you don't take away anything from this whole course just remember that
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always always always validate your idea before you commit all your time and resources to it.