Lean Market Research: How to Test A Business Idea

Test your business idea

Market research, or validation, is a crucial but often overlooked step in the process of starting a new business or project. It's much simpler than you'd think, especially with the help of modern digital marketing tools, which means there is no excuse for skipping this step.

You don't want to risk becoming another statistic. Plus, the clear benefit is that you'll start strong by learning about your target audience, which should be an ongoing thing for any business.

The basics of market research

  • Market research is traditionally about surveying people who are ideal candidates for a new offering. The problem is, focus groups are proven to be ineffective

  • "No market need" is the #1 reason startups fail, accounting for 40% of false starts. Don't become another statistic.

  • We have the validation.run methodology that uses digital marketing to derive a measure of demand from your target audience. it also identifies them further in the process. But it uses realtime action from real people actively searching for your solution or something similar. This might be the biggest different from traditional options.

  • Testing your positioning statement is key. This is all about who you're targeting, what their problem is, what your solution is and how it's different from alternatives or competitors out there. When you nail this, you can start marketing your offering. But you need to confirm this, otherwise you'll never know who you're addressing and what the real issues are that you’re hoping to solve for.

  • Knowing how audacious a task it is to build a new company, why not do everything you can to safeguard yourself. Take the measured approach, use a touch of the scientific method, use the tools we have at our disposal to their fullest potential and try your best to quantify your audience’s demand and their association to your offering.

Our methodology of lean market research

  1. Clarify positioning statement

  2. Keyword research: working to understand search intent

  3. Ad campaign to test

    1. Curiosity (CTR)

    2. Specific messaging options (ad performance)

    3. Implied cost (avg. CPC)

  4. Landing page to summarize offering

    1. Measure demand (CVR)

    2. Messages from leads (customer development)

  5. Reporting to bring it all together

Access our Validation.Run Playbook: See step-by-step how we implement the Validation.Run methodology of lean market research to measure demand and identify the target audience for new business ideas.

Outcomes of effective market research

  • The first question we're always looking to answer is "does anyone even give a damn?" then, assuming that's a "yes", the second question is "ok, who are these people and what's their situation?"

  • Once you know this you can start to reach them with effective marketing

  • Know the right verbiage to really connect with them. After all, you're going to build something for them.

  • Figure out the best acquisition channels (pick one to focus on) to bring in new customers

  • Continue testing, iterating, and scale from here.

Considering how simple and helpful it is to properly validate your business ideas, hopefully many more people will consider it as a good place to start. We're building the free resources so you can do it all yourself. And if you want us to do all the heavy lifting, take a look at our offering.

We hope you join us in giving appropriate time to testing before committing substantial resources to the wrong path.