How to Actually Validate Your Business Idea

Entrepreneurs and freelancers have tons of ideas.

Everyday people from all around the world start new businesses.

But only a few will actually turn into something which makes them money.

Let’s take my dear fictional-friend StupidStuart as an example here…

StuStu, as his best friends call him, is a 31-year-old ecommerce entrepreneur looking for some nice side-income.

He wants to get started in ecommerce. So he studies all available online resources (including my case study), spent 2 weeks building an ecommerce website and also $500 USD on Facebook ads.

His results: 0 sales. Mehhh.

StupidStuart gives me a call: “bro, what did I wrong?”

Long story short: he didn’t validate his idea.

He was so excited that he totally forgot to test his business idea before actually spend time and money on it.

Can you relate? Of course you do…

Because this is a very common mistake.

Luckily, there a few tactics you can do to validate your idea and figure out if there’s an ACTUAL demand for your idea.

Today we will cover validation by building an email list!

Validate Your Idea by Building an Email List

The plot is simple: you build up an audience which loves the niche you’re trying to approach before you start your business. Ok?

Ok…

There are now two ways of using that email list to validate your business.

1.) The Critical Amount of Subscriber Approach

Set a goal of a certain amount of subscribers you’d like to have in a specific period of time. If you achieve this, you will consider your idea validated.

Example:

I consider my idea as validated if 100 people sign up to my email list in 10 days.

I did something similar in a case study where I started an e-sport business.

Ask yourself the question: at how many subscribers will I consider my business validated?

This works because:

Many people usually only give away their email address for something they’re interested in. And – as you know – people love to spend money on things they’re interested in.

Noah Kagan, founder, and CEO of Sumo.com wrote on a guest-post on Tim Ferriss’ blog:

then evaluate your conversion rate for ad-clicks and collecting email addresses. This is how we launched Mint.com (see one of our original sales pages here). You are not looking for people to buy; you are simply gauging interest and gathering data.”

You see, it actually works and successful people used this strategy, too.

2.) The Pre-Sale Approach

Once you reached a certain amount of subscribers, you announce that you’re about to start your business and offering a limited high discount as a pre-sale offer for interested people.

If you have the right people in your list, some will take that limited pre-sale offer!

Send them your PayPal.me link so they can send you some money. Once you made a pre-sale, you validated your idea. Easy peasy.

This approach requires to have some people in your list which are super passionate about your niche.

This works because:

If some stranger from the internet (your customer) gives another stranger from the internet (you) some money, you KNOW they’re desperately waiting for the product you want to sell.

I did the same with my online course.

When I had the plan to create that course I didn’t want to blindly jump into it.

Creating a course takes a ton of time… writing a script…. recording the videos… editing the videos…. rendering the vids…. uploading them….

I wanted to be sure it’s worth the time.

So I offered 100 pre-sales for $199. That’s $19.900 USD. My plan was to pre-sell at least 50 courses. If I would have hit that 50 courses mark, I will create it. If not, everyone will get a refund.

In the end, I sold 91 courses before I even wrote the script.

I KNEW (not hoped) THAT MY COURSE WILL BE A SUCCESS BEFORE CREATING IT.

And you can adapt the same strategies to your ecommerce business (or any other business).

It’s a numbers game. The more qualified leads (aka. niche-interested people on your list) you have, the higher the chances that you’ll make sales.

And, besides of validating your idea… you make some money $$$$

Alright, alright… so far we learned:

  1. You should validate your business by building an email list
  2. Set a subscriber goal when you consider the idea to be validated, or…
  3. Make pre-sales to validate your idea.

If only StupidStuart would have known this… he could have saved so much time and money.

How to Build an Email List From Scratch

Let’s say you want to give the above-mentioned validation method a try. You need an email list, right? Right…

To do proper validation, you NEED the right people on your list.

Quality > Quantity

In the following example, we say you want to sell summer products (eg. sunglasses, beach towels, swimwear, …). Therefore, you want to get people on your list who love or need these products.

Those people could be…

  • People who are about to go on vacation,
  • Travel blogger,
  • People who live in sunny countries.

We go with the example of “people who are about to go on vacation” here.

Find a Topic Your Future Customers Love

As we want them to give us their email addresses, we need to give them something valuable in return.

In our example, we will give them a piece of content they love.

But what kind of content do they love?

Solution: Google.

Two seconds later we have a topic:

“Best places for vacation if you can’t decide”

Google again.

Best places for vacation if you can’t decide” on Google to get an idea of what people want to read. Usually, the first headline is a good inspiration.

Don’t write anything yet. Remember, we don’t want to spend too much time right now.

How to Build a Landing page in Seconds

You need a simple website for people to enter their email addresses.

Follow the following steps and you have set up your landing page in just a few seconds.

Go to MailChimp and sign up for a free account.

Create a list in MailChimp.

Create a free landing page in MailChimp.

You see, I just took the headline I found on Google and created a simple landing page with MailChimp.

Alrighty… we have a topic and a landing page.

It’s time to get people on the list.

How to Get People on The E-Mail List

Many people struggle to get people on their email list. Honestly, it’s not THAT hard.

You just need to know where your potential customers hang out and share your content with them (in a non-spammy way) with them.

Those places could be:

  • Facebook groups
  • Subreddits
  • Niche forums
  • 1:1 message
  • LinkedIn groups
  • Other people’s newsletters
  • Other people’s social media accounts

To begin with, 1:1 messages are the best way to get a foot in the door.

We’re not looking for scaling opportunities here so direct 1:1 messages are working great.

Kindly ask niche-interested people in a direct message (on any platform/forum) if you’re allowed to share your newsletter with them. Tell them it’s free and that they can unsubscribe anytime.

Here’s a template for you to use:

“Hey ________,

Just figured out you’re interested in ___________.

I have a popular newsletter about _________ where I share my experiences.

If you want to join, I’d love to send you the link to the sign-up page.

You can unsubscribe at any time.

Cool?

Have a great day,

YOUR NAME”

A few bullet point tips:

  • Don’t mention your company/business
  • Don’t sell anything yet
  • Keep it simple
  • Be nice, even if they call you a spammer

Send out these messages as long as you need to hit your goal.

What to Do When You Hit Your Goal

If you decided to go with the first approach (critical amount of subscribers) you validated your idea by the time you hit that goal. Congratulations.

Now you can:

  • Write the piece of content you promised your audience
  • Build your online store
  • Use the email list to make sure you have free traffic on the first day you open your store (maybe give a discount)
  • Make money

As you have quite some people on your email list you know that there’s a demand for your topic. You can build your business with a ton of confidence. There shouldn’t be doubts in your head anymore.

If you went with the pre-sale approach you actually do the same. Except for building your online store.

IMPORTANT: Don’t sell in the first email.

Keep up with what you promised. In a second email, you can offer pre-sales.

An email could look like this:

“Hey, ____________

How did you like the latest email? Hope you found some inspiration!

As an ___________ enthusiast, I take the leap and start my own ______ business. Gosh, I’m super excited to share it with you!

As you’re one of my early subscribers I’d love to offer you a __ % discount as a pre-sale.

I attached the product images + prices to this email.

If you think the prices are still too high, just make me counter-offer.

Keen?

xoxo,

YOUR NAME

PS. Don’t forget to send me a counter-offer.

You attach the pictures of your products (with prices) to that email and wait for people to respond.

By giving them the opportunity to choose how much they’d like to pay you even can figure out if your prices are good.

You’re just a nice person here. They will appreciate that.

Let’s say you consider your idea as validated if 3 people will take your offer.

Once those 3 people have sent you money for the products, you can start building your online store (don’t forget to send them the products ASAP).

You know your business will be a success as you already made sales. Without having spent time on building an online store.

Also, you have an email list filled with people who are passionate about your niche. Even if they don’t buy in the first place, maybe they will later.

You can only win here.

Doing all this validation only takes very little time (and NO money) compared to building a complete online store from scratch. And, by the email validation method, you’ll also have guaranteed free traffic on opening day.

An ecommerce entrepreneur’s dream.

Hope you’re now as passionate about validation as I am!

– Tim Kock

PS. Which approach will you pick: A.) or B.) ??? Answer in the comments: