Thursday, February 16, 2012

The Top Ten ways to test your product with consumers

This is a slightly adjusted version of our article published in The Globe and Mail, Canada’s top national daily newspaper.  You can see the published article here:

As an entrepreneur you don’t have dozens things to deal with, but hundreds: public relations & marketing, sales, technology, finance and accounting, human resources...  At the end of the day, it all boils down to the two most important things: your customers and your product. The big question is how to build a product that will be embraced by customers. It’s a long road to convert an initial idea into a successful product. Below we lay out ten extremely cost-efficient ways to test and improve your product or service.

1. Ask your friends

This is a very simple and accessible way to test your product. You probably won’t get the most critical perspective, but speaking with friends will allow you to identify the most glaring points that need improvement.  Some friends aren't afraid of being very frank and honest, especially when it can help your business. The best part? You can always go back and ask if the new changes are an improvement.

2. Embrace Starbucks, Second Cup, Tim Hortons, Aroma, and all other coffee shops

It might sound strange, but grabbing a random person in a coffee shop can become a first unbiased product user with fresh eyes. Latte sippers are not in a hurry, so asking someone to quickly try the product isn’t complicated. Many people love to be asked! Best of all, you can choose testers from almost any customer segment: from a techy teenager to a 50-something office worker.

3. Do a 65+ test

The best products are simple and easy to use. In this case, a 65+ test can help.  Ask several seniors to try the product and watch how they engage with your creation. They might pay attention to completely different aspects than you think. Considering their input may open a door to a totally new customer segment! Another good aspect of this interaction – they have time and will be happy to share their perspective!

4. You don’t speak my language? Test my product!

To ensure that a user interface speaks for itself, find someone who isn’t fluent in your language.  Is your product simple enough that it doesn’t need to rely on heavy text explanations? Sometimes knowing the language is required to use the product, but in many cases you will be able to either make the interface more intuitive or simplify the language. Mother-tongue speakers will also be grateful! 

5. Test with industry experts

Nobody knows more about your product than you. And nobody knows more about the industry than industry experts. Experts could be active and respected in the industry, or be retired after decades of experience. They can offer professional insights about your product and help you think about additional elements that will allow you to develop an even better product. To meet numerous experts for a variety of feedback, both about your product and your business model, try participating in an innovation competition.  You’re sure to get valuable input. 

6. Leverage your employees

It may sound banal, but ask everyone in your team what they think about the product. Comments from accounting or marketing will be different from those coming from the developer or designer. Your team will feel more involved and motivated when they’re contributing to the product’s overall success! InsurEye’s employees are always the first testers of our products!

7. Call on subscribers 

Most small businesses have a web presence and also an option to subscribe to a newsletter. Many offer a blog to share news and updates with their users or customers. Remember that the majority of those who subscribe to your newsletter or RSS feed are people who are sincerely interested in your business, and they’ll be happy to provide feedback. You can be sure that there will also be numerous industry experts among them. If you offer a small volunteer incentive, such as a prize or draw, it can’t hurt. 

8. Shake up cocktail conversation!

At this year’s seasonal party circuit, why not combine business with pleasure? When people ask what business you’re in, use this opportunity to gauge interest for your area. A short survey of the crowd with, “Can I get your honest opinion on three designs so that we can create an amazing product?” will surely engage many party-goers. You may discover new fans of your product or industry experts. Just remember to keep it short and simple – it’s still a party and not an office! Many of our friends know that we’ll bounce some ideas off them during parties. Luckily they don’t mind! 

9. Use social networks 

Most of us use social networks; some more, some less. They allow us to stay linked to others, get updates, and share our lives. But social networks are also a powerful, low-cost business tool for product development. Just ask people what they think – many social networks offer feedback tools, such as the Facebook survey. Not everyone will get back to you, but you’ll surely get a lot of insightful feedback! Interestingly, Twitter proved to be a good way to address specific people that we’d targeted for feedback! 

10. Big debut with journalists & bloggers

If the product or service is ready for the greater public, try it first with specific journalists and bloggers. These are busy people, so if it captures their attention, you can be sure it will do the same with many other consumers. Once you’ve identified the right target audience, put together a catchy title, a short and crisp introduction, and a link to your product.  That’s all it takes! Don’t forget, you can even offer them unique, exclusive publications if they can be first ones to try out your product! Be prepared that what they really think and write about “your baby” is not always what you want to hear... but you have a cool product, right? 

Business plan a “must” for an entrepreneur? Wrong!

Where did we start at InsurEye...

If there is a topic where both Dmitry and I have the same perspective, it’s the perception of a business plan. We both started InsurEye and simply knew we needed a business plan, and so we wrote it. The 80-page document that resulted, looked like a completed PhD. It took a disgustingly huge amount of time and brought extremely little. So our view on a business plan now is the following: it’s normally a waste of time.

Our own experiences with the business plan

Don’t get me wrong. The thoughts behind the business plan are all right: define your business model, plan activities, calculate financial numbers, etc. The problem is that at the very first start-up phase there is so much uncertainty that you can spend 24 hours a day simply adjusting the plan to quickly changing circumstances.
How many nights did we spend polishing financial numbers and discussing assumptions? I’m not sure if we ever used them for any practical purposes, and we didn't use them for presentations. Let me give you an example – we made assumptions around development costs and then got several quotes from developers. They were off not by 40% but by 400%! Who can pack such uncertainty into the business plan?

Well, one thing is for sure:  After writing your first business plan including financials, you will gain the necessary accounting and finance knowledge. If you are not into that stuff, I can promise it will be painful. I was not a fan of accounting topics in my MBA classes and sometimes regretted not having invested enough time into books full of dollar signs. However, as an entrepreneur you will need this subject again much sooner as you think.

Conclusion about business plan

There might be a couple of cases where it’s probably a good idea to produce a business plan, like preparing for a presentation with investors. It’s probably also good if you want to make sure that you’ve thought through all key topics, using it as a reference.

But in general, invest your time into something more useful like the development of your product / service, testing it with future customers, and building partnerships for your business. Viable product and existing customers will always top any fancy, colorful slides.

What are your experiences with writing a business plan?

Hello world!

This is our first post and we are very excited! We had a long team discussion about whether we should start this blog.  In the end, we decided to do it in order to share our entrepreneurship experiences.  An amazing thing in having a start-up is that you can try so many different things and collect such a breadth of experiences you would never get in any other job.  So, we decided to write it all down.

So what do we do?  Our company, InsurEye, was officially born in March 2011 in Ontario, Canada!  From the very beginning we knew what the focus of the company would be: provide user-friendly online tools to help educate people about insurance.  But we wanted to do it in a cool way, breaking the insurance taboos and creating transparency.  Both Dmitry and I have worked with cool technologies in our previous, pre start-up lives and we loved it.

We’re an unusual company in many ways: we’re not in a typical start-up industry, we have an extremely diverse team, with very dispersed team members.  Our folks are located in Canada (Toronto, Montreal), the U.S., Germany, and Eastern Europe. If you want to read more about how it all started, check out this article from MaRS here!

Here in Canada we work with two organizations supporting entrepreneurs: CYBF (Canadian Youth Business Foundation) and MaRS Discovery District.  Check them out – both are very useful for entrepreneurs.