S7 E5 Demand Validation. Be sure your business will make money before you launch with Jeremy Gray

Episode 5 – Demand Validation The must do first step for success ​ The CB Insights tech market intelligence platform analysed why 110 Tech Companies failed. The leading cause of failure was that they ran out of money.

The second most common cause of failure was that there was no demand for the product or service.

How can you avoid spending hours and money developing your business only to find that no one, or at least not enough people, wants your product or service?

Before you start your business do your research and make sure that customers are interested in buying your product. You believe in your product but in reality, it’s probably not perfect. That’s why you need demand validation.

To test and validate your business idea ask three questions: What problem do my potential customers have? What is the solution to that problem? Why should people pay money for my product?

Behind these questions are further questions. Who are my potential customers? Will my solution appeal to my potential customers? How much are my potential customers willing to pay?

Using your best thoughts on the answer to these questions start to sketch out your value proposition or unique selling proposition. A unique selling proposition, which defines your company’s unique position in the marketplace, is an important part of creating pricing power and a business that customers genuinely love.

A strong unique selling proposition lets you to stand apart from competitors and actively focus your energy on creating things that cater to your ideal group of customers.

As Seth Godin put it: Instead of working so hard to prove the skeptics wrong, it makes a lot more sense to delight the true believers. They deserve it, after all, and they’re the ones that are going to spread the word for you.”

Why You Need a Unique Selling Proposition

It’s likely that many of your prospective customers have difficulty deciding which option in your industry is the one that deserves their time, money and trust.

This selection can be a daunting process for customers that don’t have the experience to know what separates one competitor from another.

That’s why it is your job to assist them by making your unique selling proposition obvious, different and memorable enough that they can see exactly what your business has to offer that the other guys do not. At this stage you only have ideas, guesses, hypothesises that need to be confirmed or refuted. How this can be achieved will be covered in the next Segment – Demand Validation – First Steps – Your initial research.

Tags: how to launch a product, launching your product, product launch plan, product launch, product launch formula, marketing strategy, IBGR.network, Jeremy Gray, Practical Solutions to Difficult Problems