The Market Potential “Acid Test” Formula

Do you have a great idea for a product or business?

I’m willing to bet that you, like many entrepreneurs, have not only one great idea – but lots. In fact, many entrepreneurs will say they have TOO many great ideas.

While that seems like a good problem to have, it turns out that too much choice can have a negative impact on our success. It can overwhelm us, paralyze us, or have us running in so many directions that we just wear ourselves out and move nothing forward.

The best counsel we can give you is to choose one race and run it hard. Steve Jobs may have said it best:

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1,000 things.”

The sooner we can accept or reject the idea, the less expense and impact it has, right?

I’m sure you’d agree that it would be much easier and less costly to test the idea as soon as you have it, than after six months of getting that creating the product only to find there was no demand for it.

This Market Potential “Acid Test” shows you how to test your idea against a few key success criteria that predict a high probability of success – before you invest significant time and energy to develop your products and services.

There’s a nice side-benefit to this too.

See, one of the reasons we often feel that we have to work on all the ideas we come up with is that nagging fear that the idea we came up with may be “bigger and better” than the project we’re working on. That we’re losing out on a big opportunity.

This is such a big deal that it’s become a meme: FOMO (fear of missing out)!

But when you run your ideas through this Market Potential Acid Test, you’ll not only have the confidence that you’re investing your time, money and energy on the high-probability projects, but the peace of mind that you’ve wisely chosen which projects to reject too.

Some of the key questions this quick test will help you answer include:

• Does our idea fall into one of the three “Mega Niches” categories or one of the 29 niches within them?
• Are there sufficient sources of traffic to provide us a steady stream of new leads?
• Is it an active, even irrationally pasionate niche?
• Are there many channels of media, communities and events that give you access to your potential customers?
• Is there the right amount, and right quality, of competition?
• Can we uniquely position ourselves to meet an under-serviced or unmet need in the niche?

To prepare to use this Implementation Plan, please review these trainings and reports in the STARTUP Club member area:

• Niche Intelligence Report
• Turning Talent Into Income training modules:
  • Identifying Opportunities and Trends

Here’s how to use this implementation plan:

1. Review the reports and training listed in the “Preparation” section to remind yourself of the proven markets and niches that you ideally want to pursue, and the key principles for finding a viable niche market.
2. Download the worksheets and prepare to use them – either by printing them out, or opening the electronic copies on your computer, ready to enter the data from your research.
3. Watch each demonstration video as follows:First, watch the video all the way through once or twice without pausing to get “the big picture”. Don’t worry about understanding all the details — just get a sense of what the main steps and ultimate goal of the exercise is.

   Then, watch the video and pause to make notes where necessary of things you may need to do in order to take the actions demonstrated. For example, you may need to open a google adwords account, or set up your facebook ads manager, etc.

   Finally, watch the video and do each activity as demonstrated.

   When you’re done, your completed “Market Potential Canvas” will give you a effective bird’s eye view to help you decide whether or not to pursue your idea further.

files Market Potential Canvas worksheet

You don’t have to go very far, or pay anything, to get detailed data on how actively people are searching for your solution online. Google’s very own Keyword Planning tool gives it to you “straight from the horse’s mouth” and it’s absolutely free.

The Keyword Planner is typically used to find keywords for organic (SEO) and paid search traffic campaigns. But in this video, you’ll learn a simple way to use it to determine how to gauge the market demand for your idea.

The best part about it? One of the key elements of validating our idea is to offer a solution to an unmet need that people are already looking for. And what better indication of that is there google’s database of what people are, literally, searching for?

Download your Market Potential Canvas worksheet, and let’s get started…

files Market Potential Canvas worksheet

In addition to the Keyword Planner, Google’s Display Planner tool is another valuable ally in our search to evaluate the market potential of our idea.

You see, Google allows advertisers to reach their audience in two ways. The first, which most of us are familiar with, are through the ads that appear at the top and right side of the page that Google displays in response to a search query.

What you may be less aware of though, is that Google’s Adsense program allows any website owner to partner with Google to display ads on their own website (in exchange for a share of the revenue that Google earns through the ad).

That means your ad can appear on millions and millions of other websites that are in Google’s advertising partner network.

The amount of advertising space on all these websites is called the “ad inventory”. What we now want to do is use Google’s Display Planner tool to evaluate the amount of that ad inventory that displays on websites related to the most active and relevant keywords identified by the Keyword Planner.

And, as a bonus, we’ll not only find out how much ad inventory is available to us – but also the demographics of the people who will see those ads — important information for us to use when we create our advertising and marketing campaigns.

Next to Google, Facebook is the biggest advertising network easily available to online advertisers.

Facebook ads work much in the same way as Google’s display ads. They are displayed whenever people are using facebook, not as a results of search queries.

Facebook aggregates thousands of data points about each user, and allows advertisers to select the audience for their ads based on a selection of demographic, interest and preference, and lifestyle data.

In this video, we’ll show you how to mine Facebook’s database of user data to estimate the number of people that have the profile and characteristics that indicate they’d be good prospects for your solution.

Naturally, Google and Facebook are not our only advertising channels. There are also many traditional media channels like Magazines, TV and radio, and new media euqivalent like ezines, youtube and podcasts.

And let’s not forget the “feet on the ground” opportunities like seminars, trade shows, networking events, conferences, association meetings and their virtual equivalents.

These channels and communities present more opportunities and ways to get our message in front of an audience. Their presence, especially in abundance, indicates a high level of interest, engagement and passion — highly desireable characteristics of the market we want to serve.

At this point, we don’t need to do a lot of research into each of these channels and communities. But we do want to see evidnce that they exist, and make a note of the most popular and active ones that will be good candidates when we’ve decided to target this niche.

As you narrow your niche, the size of your available audience very likely diminishes. That is a good thing in terms of your ability to communicate directly and specifically to their needs. Often, people are concerned that this smaller audience size will be insufficient to sustain their business.

But even small niches can be lucrative and well worth pursuing. In fact, it can be a competitive advantage, and even gives you a chance to be “the big fish in a small pond”.

So how much traffic is enough traffic? Let’s have a look…

If you’ve followed along with the videos, your Market Potential canvas will now give you an instant snapshot of whether you’ve got a winning idea or not.

If you don’t see lots of keywords, traffic sources, other ad medias and passionate communities on your worksheet; or if your “ideas” column isn’t full of ways you see to enter the market and position yourself against the other players, this is an idea you likely won’t want to move forward on.

On the other hand, if the canvas is overflowing with evidence of keywords, traffic sources, other ad medias, passionate communities and all sorts of ideas for entering – even dominating – the market … you may have just discovered your next big winner — go for it!