How do I do validate my digital start up idea at low cost?

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I’m working with several start-ups now which are in niches that haven’t been realised yet. All of them have the same challenge, they don’t have much money and so the question is:“How do I validate my digital start-up idea at low cost?”. That’s a conundrum for many start-ups because if the niche isn’t filled then how on earth do I know there’s a market for what I have in mind? You might be lucky and do it and it works but you’d be better to look at it rationally and use your intuition. There’s a key point to understand if you are doing market research for digital start-ups, it’s a bit theoretical but worth knowing.

When we think of human needs there are diverse types – overt, which are obvious like McDonald's needs to do healthy choices, covert, which is where through observation you can see a problem, an example would be that coffee cups these days often have a grip to stop you dropping or spilling them. But most start-ups are in what’s called the ‘latent need’ space or ‘created needs’1 and that’s harder because the need is less obvious if you ask people. It’s like asking people, who have never used a mobile phone, if it’s going to be useful, the answer my mother gave is “I don’t need one people can ring me at home!”

So, if you take AirBnB, that’s a classic latent need, no-one was screaming for it, but you could deduce the need by looking at the number of holiday let websites, the growth of on-line booking for accommodation and a variety of other things. Another example would be a smart meter at home, you need to try it to feel the benefit and that’s the rub. Market research is faulty when you ask people if they need something when they haven’t tried it or realised they need it. What do you do? There are four steps, they are obvious but often missed:

  • Look at Google n-grams2
  • Review your key -words using a systematic approach
  • Use deep web search hacks to see if there are sites that indirectly meet your needs (holiday let websites suggesting AirBnB)
  • Use a market researcher with a long history of conducting innovation research on latent or created needs.

What’s a Google n-gram? It’s a free service which looks at the frequency of a phrase in the English language and how it’s frequency is changing through time. For example, if you look at ‘travel websites’ it shows exponential growth starting in 1996.3 The downside is sometimes the data is bang up to date and other times it’s not but it’s worth trying, for example ‘craft beer’ as a term took off exponentially at the end of 1995 so that’s a strong hint that the beer market was going to change. (And of course, it has and did with big brewers in the USA getting hammered and having to purchase craft beer brands.)

The second thing is to review your key- words, just recently I’ve been working with a digital start- up in the personal development space, I can’t be too specific I’m afraid, but I can make the point. If we hadn’t systematically looked at all the potential search terms, then we would not have had a business case at all. We systematically broke down all the search terms into related ones and the best way to do this is to use the visual word thesaurus which gives you some goes for free.I don’t want to teach you to suck eggs but be disciplined, if you were going to launch AirBnB you’d need to write down all the potential search terms e.g. independent on-line booking, independent B&B’s, staying in people’s homes and then put the key words in the visual thesaurus.

The next subject are deep web hacks, now there are literally 100’s of these hacks and here are three I’ve found very useful. The first is related: followed by the websites, it’s a wonderful way to find competition without trawling through acres of Google pages. Another is intext: which is where only key- words (multiple ones) will appear from the search. The last is – NOT which allows you to omit certain key terms, so the search NOT - "Airbnb" yields the set of competitors from disgruntled Airbnb clients

The last thing is, if you do focus groups, you need a psychologically trained moderator who is experienced in handling innovative ideas and it’s the difference between killing an idea and letting it live. You need a researcher who can ‘thing on their feet’ to save an idea. I have many examples of this but one that sticks out was researching a flavoured water drink, the basic idea was ho- hum, until we explored different ways things could be presented, one of those was a ‘sports water’, suddenly the idea went from ho-hum to, yeah! Another was a digital idea for a finance company with a new way to pay, simply by reframing it as ‘mofinance’, it went from an academic concept to a digital idea that people got excited about, a portal to lots of on-line financial options.

The key message here is to discipline your natural exuberance with ‘your baby’ with a disciplined approach to validating it. We know one of the biggest cognition biases is ‘confirmation bias’, put simply if you have an idea, your mind will upweight all evidence to support it and downweight data to the contrary. And it’s for this reason we’ve created an affordable package to help start-ups, so you get an independent view, without losing your shirt! If you want any further pointers please e-mail me at





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Jake Pearce

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"Different to get better results". Jake is obsessed with marketing ROI. He helps companies amplify word of mouth to get business more easily. He uses Meanomathics to boost Comms cut through 10-30%. He uses co-creation to future proof innovation - he turned around a drinks category providing 15% growth using professional co-creation. And he helps top CEO and celebrities with their personal branding and brand purpose, which links back to Word of Mouth marketing. 

Worked with Vodafone,Kellogg'sMcDonalds,ANZ,McDonalds,Suntory,Danone,HSBC,Barclays,BAT,Meat Brands,Saatchi&Saatchi,Draft FCB,Fairbrother Industries, Les Mills, Holmes Place, Grey and a host of digital start-ups.

Jake Pearce is a specialist in brand planning, development & innovation. Jake is currently working on a Word of Mouth Marketing start-up, a personal branding start-up and new delivery systems for wellness products. - for brand development and innovation - for word of mouth marketing expertise


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