Inside Small Business | Small Business & Home Business Marketing
Finding Diamonds through Market Testing
Skip Shuda, Team and a Dream
Team and a Dream spent last Friday morning at the Mid-Atlantic Diamond Ventures (MADV) investor meeting. MADV is a business cultivator that provides support to early-stage high technology businesses. Seven companies were presenting, including current and former clients Healthy Humans and Vienna Human Capital. Since we believe strongly in market testing your idea, our team thought it would be fun to see how well these companies have validated their business models. What techniques have they used to gain insights into their market? How well do they understand their competition? What feedback have they received from their potential clients?
Healthy Humans (recently launched into Alpha mode). We know that Healthy Humans has performed a competitive analysis and has done market testing using Google Adwords (because we helped them on those fronts). Healthy Humans also conducted some early focus groups to help validate and expand their market concept. The best way to validate a concept is to gain direct feedback with some version of the product. Since the team has launched in Alpha mode, they can now validate their conversion rate from their free offering to the paid offering. With their initial Alpha test group of a handful of consumers they reported seeing 100% conversion. This conversion rate is not likely to carry forward, but the interest and energy is a powerful indicator of how well Healthy Humans may perform.
Another MADV company that presented was Life-Pack – Born out of the pain of 9/11, the inventor went to firefighters and asked them about their concept to have a “bail-out system” for people in high rises. The firefighters asked for a smaller product to help them. When escaping a fire, firefighters reported “All I could think about is living” – so they developed a product that only required that a firefighter to “hook and jump.” They have created an advisory board of “fire rescue” people. It is clear that the Life-Pack team have co-created their product with their target customers.
On Sept. 23, I had the pleasure of hearing Mr. Joe Douress, Vice President of Content Operations for LexisNexis, talk about his role in creating Lawyers.com, a directory and resource for finding attorneys. Joe was speaking at the Innovators Club. Joe is a huge proponent of market testing. They did an enormous amount of research through the evolution of Lawyers.com. For example, early on their research revealed that there are 4,000 categories of businesses in the Yellow Pages, but lawyer listings account for 1/15th of the total revenue! Lawyers REALLY want to be found! But they didn’t stop with market research. Joe’s team met with attorneys, directory companies and affiliate partners to understand what the market needed. They test market different promotional mechanisms – from coffee cups to television advertising. The huge success of Lawyers.com can be largely traced to this investment in market testing and concept testing.
These are just a few stories ranging from established successes to emerging successes. Understanding your market, testing your concept and adjusting your message are key steps every e-Business startup should consider.
Posted on Friday, March 20th, 2009 at 12:56 pm and is filed under Business, Leadership, Marketing. You can follow any responses to this entry through the RSS 2.0 feed.
