I’ve been reading more and more about larger companies that are creating “startup” groups or partnerships so they can test, learn, and innovate in a different (and likely faster) way. It’s a smart idea.

However, if you’re a smaller business you can just as easily use the “startup” approach. At the heart of this approach is testing and adjusting product ideas before you make a big investment. Key to this approach is to ask customers for their direct input and feedback on your prototype ideas. Then, once you have a specific product defined (edited based on customer feedback) with enough real consumer interest, you can move forward into development and fuller funding.

Let me break down the steps to this basic approach:

  • Develop new ideas that would be appealing to your target customers. These can be ideas from customers or ideas from your team that you believe will be well-received.
  • This is the most critical step: Get in front of customers and gather feedback. Show them a prototype of your MVP (minimum viable product). What that means is that you need to create a draft, a mock-up, a basic prototype version of your idea. (This will be something you could later build based on consumer interest.) If at all possible, gather customer feedback one-on-one. This allows you to ask probing questions and gather more specific feedback plus you can see their first gut reaction to what you are sharing (watch their facial expressions).
  • Evolve the prototype per customer feedback and test again. At this point, you could move to a survey or other group forum to collect feedback. The key is DO NOT rush steps 2 and 3.
  • Optional: you could build out your idea at this stage into a beta version. This would be something customers could actually use and provide you further feedback about. This approach surely helps the pocketbook since it doesn’t require you to move into full product investment yet.

The overall idea here is don’t invest too much in the MVP until you have true customer interest. To clarify, this is NOT about asking a family member if they like the prototype. This about putting the new concept in front of an actual buyer. I don’t mean someone who works for a company that would buy it, I mean the actual purchaser who has a budget and would buy your prototype if it was available today.

Koolaid(TM)I’m sharing this advice from experience. I’ve been a part of teams that are so excited about their product ideas that the customer validation isn’t confirmed as strongly as it should be before a notable investment is made. They were drinking too much of the product “Kool-aid.”™ (It doesn’t matter what kind of investment you will make—it could be building out an online product, a physical product, or whatever. You still need to validate first.) Keep in mind it can be very hard to recoup an investment if the customer interest doesn’t pan out in the way you hoped. And to pivot after a major product investment will likely require even more investment, and that is painful too.

Have any questions? Post a comment below. I’d love to share what I know from my 3 startup experiences.