One of the most important ways of validating your idea is by using a landing page. 1
So nowadays if you see any digital product or even real products being launched you'll see you know 2
six months in advance or three months in advance 3
people will create a landing page like so. 4
So this is the one for a London based app called Great little Place. 5
This is one for Robinhood which is a zero commission stock brokerage. 6
And the thing that you notice that's common to all of these is that they have this box that allows you 7
to put in your email address 8
and it says "Be notified when we go live." 9
And the reason why this is really important is that you can demonstrate that there are people who are 10
actually interested in your product. 11
This is way before you put down a line of code, way before you even you know put in any investment. 12
And in fact this is our Aaron Patzer who is the founder of Mint talking about how he validated the idea 13
of mint.com before writing a single line of code or before putting in any work by just seeing how many 14
people will actually sign up to this page. 15
And it's so true what he says. 16
A lot of people are obsessed with this idea of getting the product out there just make a prototype really 17
really fast and try and you know be first to market. 18
But actually there's no point doing it until you know that there's people who are interested in your 19
product. 20
Additionally you'll have a bunch of people who are ready to download your product, who can receive an 21
email telling them that your product is ready and they will be the most likely people to download your 22
app or buy your product. 23
Now there's a number of ways of doing this type of idea of validation. 24
And there's companies out there which specialize in this 25
for example QuickMVP which allows you to essentially set up your landing page and start driving 26
traffic to it 27
and looking at conversions etc. But I'm going to tell you about a cheaper way of doing it and a lot 28
more flexible. 29
So the idea is that you have a landing page that you've set up that's super simple basically just you 30
know a heading with a little bit of branding telling people what it is that your product does how it's 31
going to help them. 32
And the most important thing is this box here, just a place where they can put down their email address 33
to be notified once it is ready so that you can collect a large list of interested people and you can 34
hit them up on the day of launch. 35
Now in order to drive traffic towards this landing page you're going to use either Facebook ads or Google 36
adwords. 37
So people would see your ads in their feed 38
and again it would be you know something catchy that drives them towards this page makes them want to 39
click on a button like check it out now or by now or sign up now etc.. 40
So in Facebook ads you can set up what that button reads and depending on what it reads it will change 41
your conversion rate. 42
For example buying now will have a lower conversion rate i.e. less people clicking on it than 43
something like 44
Find out more. 45
But it does also mean that the people who click on buy now are telling you an intention that they will 46
buy it right? 47
So these are a lot of things to experiment about and to implement it iteratively so that you can see 48
what works what doesn't and improve on it day by day. 49
So with Facebook ads you get a whole load of metrics. 50
You get to see how many engagements there are i.e. how many people clicked on it and how many people 51
interact with it and sometimes in Facebook I mean post engagement can mean just that when people were 52
swapping on the phone they paused for a little while on your ad that counts as an engagement. 53
So if you ever wonder you know why it is that you see more of certain friends post on Facebook it's 54
because Facebook has algorithms that detect what you're interested in. 55
So you know for these wedding photos, for baby photos, they get a lot of likes 56
immediately as soon as the person posts it and that's flagging to Facebook that this is really interesting 57
content. 58
And also you know when you're scrolling through Facebook and you see a post from your ex or you know 59
from your crush and you pause on it, that pause also signifies to Facebook that you're interested in 60
this person's content. 61
So that's what post engagement can mean. People who paused on your ad or people who clicked on it or 62
people who liked it or commented etc. And depending on how you set up your Facebook ad you can gear 63
it towards different things. 64
So what we tend to say is that for the sole purpose of idea validation what you want to do is set up 65
automatic bidding so that Facebook automatically calculates how much you should bid for this ad placement 66
because there's loads of people who are looking to take up that ad space and they look at the bids of 67
the various adverts and the one that's highest gets the spot essentially. 68
Now the other thing that Facebook tells you about is reach which is you know when you're scrolling through 69
the desktop version you'll see the ads popping up in the right 70
and when you're scrolling on mobile they'll just flash through in the main timeline. So reach is how 71
many people potentially saw your ads. 72
So now you have a metric between reach and post engagements or click through. 73
So if you calculate that as a percentage, 74
so for example 3000 divided by 80000 that's about three or four percent engagement out of all the people 75
who saw your ad for in a hundred people actually interacted with it. 76
So by looking at some of these metrics you can already start to interpret how much interest is there 77
in what it is that you're trying to sell or create. 78
So for example, if you create your ad in a really simple way with an engaging image and with a few sentences 79
that describes what it does or what problems it solves for the user 80
and you see just how interested like if a thousand people saw this ad how many people would actually 81
click on it. 82
As with any sort of ads you do have to iterate through it. 83
So don't just create one ad like this, but create you know 10 or 20 and see which one performs better 84
because depending on the images that you use depending on your wording, people will have different rates 85
of engagement. 86
So try and optimize that 87
and then look at your best performing ad how many people are clicking on it after they've seen it. 88
And that's a good indicator generally of interest in your product. 89
Now you don't have to just stick with Facebook. 90
The other option is using Google Adwords and this is basically the part that appears in the sponsors 91
sections which is usually at the top currently in Google. And you can target particular search terms. 92
So for example this person's search for Bangkok hotel reservation and you can make sure that your particular 93
website shows up first for those search terms. 94
Now it works in a similar way to Facebook ads. You create your landing page that has the all important 95
email collection box and then you drive traffic towards it through these Google sponsored link. 96
So target those search terms like you think your user might be looking to solve. 97
Really think about those search terms. 98
For example if you're creating an exercise app or an exercise regime, people might not necessarily search 99
exercise regime or exercise routine. 100
They're probably more likely to search for the outcome which is weight loss or body building. 101
So essentially you know gear your key words towards the positive benefits that people get rather than what 102
it actually does. With a really minimal budget like a $100 you can get some really interesting data. 103
Essentially what you want to look at is this kind of funnel. 104
So you look at the number of impressions, so say 100 people saw your ad 105
how many people actually clicked on that ad and then you got maybe one sign up out of it and that's 106
about a 1 percent conversion which is okay. 107
But on the other hand if you had data that looked more like this where out of 100 people who saw your 108
ads maybe 10 people clicked on it and then you have 9 sign ups, that becomes really interesting because 109
that means that there's a lot of people who are incensed to take action. 110
And this is a more favorable funnel than the previous one. 111
So I would say that between the tier 1 impressions converting into clicks is interest in your ads. 112
So a lot of this depends on how well you word your ads, how-- what kind of images you're using et cetera 113
so that you grab attention. And it's really this step where you turn those clicks onto your website 114
into sign ups that really demonstrates how much interest people actually has in your product. 115
So if you're looking at this step, you know this is a 10% conversion from 10 clicks into 1 sign 116
up which means you know if there were 100 clicks and there would be 10 lineups compared to something 117
like this where there was 90% conversion from the people who visited your landing page into sign 118
ups which demonstrate just a higher level of interest in your product rather than in your advert. 119
So essentially what we would recommend is put on Adwords campaign or put on a Facebook ad depending 120
on your niche. 121
So with Facebook ads you have a real ability to really target your users. 122
So depending on what your product is say if you are targeting single women or single men or people who 123
were recently engaged. So say if you're a wedding photographer and you're selling your services on Facebook, 124
you can actually target the people who've recently changed their relationship status from single to 125
engaged. And by showing the ads only to those people you can guarantee a much higher conversion rate. 126
So whereas on Google it's more about their search terms, 127
what are people looking for that you can help them with. 128
So it's a slightly different set up and depending on what it is that you do one will probably be a better 129
use case than the other. 130
So usually what we say is set a max budget of say $20 a day and use automatic bidding, maximizing click 131
through. 132
So this is what you want. You want to channel people from Facebook or from Google onto your landing page 133
so that they can read what your product is about and then demonstrate whether they're interested or 134
not. So usually you know if you start with a maximum bid per click of about 50 cents and then you can 135
raise that bid by 25 cents every two hours or so if you're not seeing much activity until the point 136
where you start seeing click through. 137
And then at that point to stop and observe to see whether if those clicks are turning into conversions 138
i.e. whether people are giving you their email. 139
So this is actually a really cheap way of testing and validating your concept. In the next module we're 140
going to talk about how you can create these landing pages very very quickly pretty much under 141
an hour and then you spend another hour setting up your ads. 142
And that's two hours plus maybe $100 and you would have saved yourself hundreds hundred thousands of 143
pounds of investment in something that may or may not work. 144
I mean obviously if you validate your idea it doesn't mean that you're going to be the next unicorn or 145
you're not you're going to be the next Facebook. 146
But it does mean that you have a significantly higher chance of success if the data shows that there's 147
a lot of people who are interested. 148
So in order to reduce risk in your startup or in your business, always go with data rather than go with 149
hunches. 150
So another variation on this type of idea of validation is slightly more aggressive and it essentially 151
relies on this fact that you know even if people put down their email, that doesn't mean that necessarily 152
you know come launch day that they will actually buy it or that they will actually download it. 153
And in order to have a higher percentage accuracy in your in the validation of your idea you need to 154
somehow see if people are willing to pay for it. 155
There's no point building a product and then later on finding out that people are interested in using 156
it but they're not interested in buying anything from you 157
because in order to sustain yourself you need patrons. 158
So essentially this takes that email box where people demonstrate interest just one step further and 159
see if they're willing to say you know shut up and take my money. 160
So the key difference is in your landing page. Essentially you still have the same cell where you say 161
"My product is so awesome, 162
It does this. It helps you with that." Whatever it is that you believe that your product can solve or can 163
help people. 164
And then importantly at the end instead of having an email sign up box you actually have a "Buy now!" asking 165
people to commit straight away. 166
Now you know and I know that your product doesn't exist and that's fine. 167
It's just about getting a confirmation from the user that they actually would pay money for this. 168
You know, you're not worried about pricing right now you're not putting you know putting down something 169
like buy now for $5 or buy now for $10. 170
It doesn't matter. 171
It's just about asking the user whether if they would pay for this product. 172
Now the problem that you'll see is that what happens when they click buy now when you don't have anything. 173
Well usually what people do is say that you know it's out-of-stock if it's a physical product or that 174
if it's a digital product you have like a limited release or a rolling release of beaters 175
and they can sign up when the next batch is available essentially. 176
So yeah. It's a little bit disappointing for that user who would want to buy it but at the same time 177
it means that you can demonstrate that there are people who are willing to pay for this product then 178
you will actually go and create it for them and then this is the part where you put in that email box 179
so that they can be notified when it's available. 180
And the funny thing about humans is that we really like to be consistent, internally consistent. 181
Now this is probably not going to be the first time that I'm going to mention that. Knowing a little 182
bit of human psychology knowing a little bit about you know the cognitive side of how we work, is really 183
useful for understanding human behavior. 184
So one of the things that you'll notice is that humans really like to be consistent. And that means that 185
if they clicked on a button that said "Buy now" their brain is saying "Oh I really wanted this thing because 186
I was willing to pay money for it." And that means that when you next confront them with an email sign 187
up box because it's not yet available 188
you have a much higher chance that they'll actually put down the email and want to be notified when 189
it is available. 190
And indeed sometimes you can get people who are really upset and angry that it's not immediately available 191
right there. 192
So this as I said is a little bit more pushy of a tactic in terms of idea of validation. 193
But the reason why I'm telling you about it is because it does give you better data. 194
The people who are willing to click the buy now button are markedly different from the people who are 195
willing to put down their email. 196
So essentially that would be a sales conversion rather than just a sign up conversion and it will give 197
you a better indication and more accuracy in terms of how in demand or how much people would actually 198
want your product. 199
So I would highly urge anybody you know if you're launching anything just you know it doesn't matter 200
like it could be a bricks and mortar shop, 201
just try and maximize your chance of success by figuring out if there is actually demand if people actually 202
want your product. And it doesn't matter if it's an app or if it you know a shop or if it's a product. 203
Demonstrate that demand first before you sink in all your time and all your money. It will be infinitely 204
worth while. 205
Don't go down the route that everybody does where it's like "I need to create this right now because 206
XYZ is going to come in and they're going to make a much better version of it. 207
Or like you know somebody else is going to catch on to this idea." 208
In my experience and barring the experience of a lot of people around me, it has always always been worthwhile 209
taking the time. 210
It can be anywhere between one and six months of idea of validation just to ensure your chance of success. 211
I think you know a lot of times starting a startup is like playing the lottery and you probably have 212
lower chances of winning at startup than winning the lottery. But doing idea of validation doing that 213
bit of research is the equivalent of say buying a thousand lottery tickets compared to just one. 214
Even if you don't take away anything from this whole course just remember that 215
always always always validate your idea before you commit all your time and resources to it.