Validate Your Startup Idea BEFORE Building an Expensive App | Short #1

Our first short! Enjoy!

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David Baxter has been designing, building, and advising startups and businesses for over ten years. His passion, knowledge, and brutal honesty have helped dozens of companies get their start.

In Biz/Dev, David and award-winning Creative Director Gary Voigt talk about current events and how they affect the world of startups, entrepreneurship, software development, and culture.

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Transcript

David: 0:00

Hi, everyone, welcome to biz dev shorts. This is a condensed version of our podcast where we focus in on business lessons in a quick and easy fashion. Our first episode here is going to be on validating your idea looking at traffic first, rather than taking the more traditional build it and they will come approach. This will allow you to see if your startup has legs before investing huge amounts of money. Enjoy when you build a startup, and I, we've been doing that a long time. So I have a lot of experience with that. But I will tell you, almost everybody comes to me and says I need an app. It and I that's my first step. Right? They don't even have a company yet. They don't have anything. First thing they that I've got an idea. And then I have to build into an app. That's how everyone comes to us. And we turn away people who aren't ready for us. We've talked about that in the past. But one of the things that that struck me was man that's backwards. This is what what I was reading about. The thing that you should figure out first is whether or not your idea is any good, right? Why spend X number of dollars 1000s and 1000s of dollars 10s of 1000s of dollars to build an app that you have no idea of anyone wants, you know, you think it's a great idea. But the question is, is anyone else care? And no one really knows that if I ask any of our clients when they came to us, did you know there was a market for this? No, no, let's go figure that out later. That's how everyone is. Except for one i one client who did it through YouTube invalidated his market through YouTube. But aside from that, so credit to him

Gary: 1:36

the process of validating that idea first, I think is where you're going?

David: 1:41

Yes. So the idea of this is create an idea, right? Create a simple web page that talks about that idea to very, very high level. Like think of a landing page, that you've been to a million times on a million different things when you clicked on an ad, right? And it's just kind of a one pager? Not not. Now I'm thinking in my head, those super long scrolls that they're the really high intensity internet pushes to sell you will get? That's not what I'm talking about. Yeah, it's

Gary: 2:11

not it's not necessarily a marketing web page. No,

David: 2:15

I'm not talking about like some scary thing with a single big video, and I'm gonna change your life in three steps. Just watch this video, get my webinar, not that. Not that. I'm saying to make a simple landing page that explains your idea at a high level. And all it is on there is sign up for a newsletter, right? It's got to look nice. So that doesn't look like you're a fly by night. But you create this little simple landing page. And then you spend some money, I'd say 1000 $2,000, maybe, again, compared to building the app, this is dirt cheap. The idea would be you spent a couple $1,000. And you do some research. Now that's That's tricky. You either you hire someone to do this, again, you'll save yourself a lot of money by doing this step first. But you might not be able to have the skill set to do this on your own. Because this isn't just everyone doesn't know how to deal with Google and all that. But there

Gary: 3:05

are plenty of companies that do tons of companies

David: 3:07

that will do this. We are not one of them. So I'm not even talking about us doing it. But at least not yet. But you hire them to create an ad campaign that points to your landing page. You do Google Facebook, whatever you think your audience might be at, you don't know who they are. So you just try a few things. Try them and see if anyone clicks. Right? If you find that people are, if it takes three weeks to burn your$1,000 for your idea, hey, that might be there's something there if it takes three, three months to burn that $1,000. Maybe that's not very useful. And you just say,

Gary: 3:41

when you say burn that$1,000? You mean how much activity is coming back to that

David: 3:44

site? Correct. Sorry. So yeah, that means are clicking on the ad.

Gary: 3:47

So the landing page is basically you telling the world? This is the idea I have? Do you think you might be interested in this? Is this going to be a value to you, then the ad campaign is saying, Alright, let's find the people that might be interested in this and see if we could validate that this has value for them. And then the clicking on either subscribing to I don't know if you're gonna do a newsletter. Just collect names.

David: 4:12

If you're just calling I mean, it's a newsletter. Do you actually have to use this newsletter? No, because I think what it does is a two tier interest, right? So if you let's say $1,000 And let's say that will afford you 300 clicks. I'm just making up numbers but

Gary: 4:26

let's say that works. If you're doing a pay per click, like ad Yeah,

David: 4:30

like an ad campaign through any of the social media, whatever the The how is not important, right, the second but let's say 300 clicks. So that's validation one. And if does that 300 Click take three months or three weeks, right? That's a huge tell. Right? Yeah. If that if you burn that $1,000 down because 300 people click on it in an hour. World Hot diggity you are doing something really cool there. Someone's really digging this. If it takes a year then dude find something else. to do, but whatever your I mean, there's a lot of variables here. But the idea is you get it out there. And then the second level, the second level of validation is did they sign up for the newsletter? Because now it requires, I know, it's silly, but given away your email address, a lot of people aren't gonna do that. So now your 300 People click how many people sign up for that newsletter? If that is if you got 50% Holy cow. Whoo, that's good stuff. I would say if you're above 10%, you're probably doing okay. I don't have that spec completely.

Gary: 5:29

Yeah, I was just gonna say between 20 and 30% is definitely enough interest to pursue further.

David: 5:35

So that's and you've spent, you know, maybe you hired the guy to run this campaign for you for a month, or whatever. Maybe cost $3,000 $5,000. Okay. Now, the risk is that your ideas trash and no one cares, but and you just spent $5,000 on an idea that's trash? Okay. Yeah, you could look at it that way. Or you could look at it as you spent $75,000, building an app, and then find out your ideas, trash.

Gary: 6:07

Come on, at least with the validating your idea, you have room to pivot there where you could say, Okay, well, what if I just adjust this, or maybe, maybe you do end up getting some feedback, if some of these ads placed in social media channels, people are commenting or something like, oh, I went to the website. And this looks like something else, or someone else is doing something similar. But if you change it to this, this might be beneficial, you can get all kinds of feedback just from sending out those ads to begin with. And then if you do pivot, and you kind of change that idea slightly, do another campaign that's a little bit different, maybe target an audience a little bit more specifically. And so you do spend another three to $5,000. To your point, that's $10,000. Now, instead of the 55 to 75,000, that you would have spent building the app that does nothing for anybody.

David: 6:57

Correct. And that's where I want to make sure that I mean, these are, these aren't small numbers here. But I think, and you can make that number smaller, right? You could say, let's, I got $500 To do this, and I'm going to do the research. And I'm going to learn how to make the ad. Yeah, you could do a lot of this yourself, you can but the risk there is that you're going to make a bad ad. And you think your idea is bad, when in fact, you're targeted the wrong person. Right? That's, you know, let's say for instance, I use one of our clients, you know, he's he does grammar. It's got YouTube videos, and all that stuff, grammar flip is they're out and they're amazing. They, let's say he's made this great thing. And instead, before he built it, let's say he targeted students. Right, maybe we made some ads for students, and didn't get any clicks. Because kids don't care about grammar. He might think, oh, maybe my idea isn't good, when he should have and this is a silly example. But he should have targeted teachers. Right? Yeah, educators. And, and he is, you know, I'm just using him as an example. He did a wonderful job with us. But what I'm saying is, if he had done it himself and targeted it wrong, he might have gotten the wrong conclusion. And that's where it's, it probably is worth hiring a pro to do that. But I'm telling you, man, every dollar you spend here, it's like, what does that old adage is like an ounce of prevention is worth $1 for prevention is like $100 for treatment, something like that. I'm butchering that horribly. But that concept is what we're talking about here. Because every dollar you spend here, you're going to learn something is your idea. Good. Who is your audience? Right? You might be like, Oh, okay, because then you say, let's say my password, and it worked. And now you say, okay, cool. What's the next step? Well, the next step would be to build a small version of your app, not the full enchilada, small version. And we could talk about that more detail later. But you build a small version now. And then you've still got this audience, you still know how to talk to these people. I mean, this is the gift that keeps on giving,

Gary: 9:02

and give it directly to them to test. Yeah, you already have a built in audience,

David: 9:06

you've got potential beta testers, you've got you know, you know, if you've got a, you got your hand on the tail of a dragon, all you gotta do is pull on it, and he's gonna, you're gonna get a reaction. And you can put, you know, once you're ready, do you double down and start spending $5,000 instead of 1000. Because you know, this works, right? If you get a 10% return on your investment, that's people signing up this little small app, I wouldn't call it the MVP yet. But at the partial app, again, I'll go into that more later. But another podcast but what you've got the small thing and potentially could make you some revenue and that may be that fund your next round of stuff so you can build your app the real thing that you need to do it for real. But the more I noodled on this idea when I came across it on the intertubes it is just brilliant. And I wish I thought