A lot of you are here because you’re looking to start a business selling a product or service so that you can either quit your job or supplement your income.  And I’m sure 100% of you are afraid that there may be no demand for your product. (If you’re not, please leave, because there is no helping you)

Before even concerning yourself with your finances or website design or Twitter handle or anything like that, you should worry about testing to make sure there is a need for your creation.

I’ve created the following script because I’ve realized that so few people actually understand market research.  It’s not about trying to prove yourself right. (There are plenty of people out there who will give you the answers you want just to be left alone)  Instead you actually want to try to try to prove your idea wrong.

So, on with the script:

[For the purpose of this script, let’s say you have a idea for an iPhone application.]

You see a stranger in a coffee shop on an iPhone, and approach as non-threateningly as possible. It helps if you’re actually there for coffee.  If you’re the only one in a coffee shop without coffee, people tend to look at you a little strangely.

You:  Excuse me, I don’t mean to interrupt, but would you mind if I asked you a few questions about your iPhone?

Stranger: Sure, I guess.  (They might say no, but then you just apologize and walk away)

You: I’m an app developer and I’m just curious how people use their smart phones.

Stranger: Oh, okay…

You: How many apps do you have?

Stranger: Five, I think.

You: Do you have any to help you find nearby restaurants? ( or find friends, translate dog barks, or whatever the app does)

Stranger: Yeah I have Yelp, I think.

You: Do you like it?

Stranger: I guess it’s alright.

You: Well, how often would you say you use it?

Stranger: Once a week, maybe.

You: Is there any reason why you don’t use it more?

Stranger: I’m pretty much set in my way and never really use it unless I’m in the mood to try something new.

You: Well, if Yelp could remember the previous places you’ve eaten at and liked and could suggest new ones to you by notifying you automatically when you were near them, would you be more inclined to use it?

Stranger: Definitely, that sounds cool.  I just never know what’s around!

You: Would you be willing to pay for a feature like that.

Stranger: Maybe if it wasn’t too expensive, like $.99.

You: Have you ever paid for an app before?

Stranger: No. (This is where you thank her for her time and leave, she’s not your target market)

-OR-

Stranger: Once or twice.

You: And what did those apps do?

Stranger: They were games.

You: So what would make you pay for an app that wasn’t a game?

Stranger: It would have to be something that allowed me to connect with my friends.

You: So if you had the option between an app that made suggestions for you or allowed you and your friends to recommend restaurants to each other, (Something your product isn’t currently planned to do) which would you rather spend your $.99 on?

Stranger: The second one.  I would love to be able to know the places my friends like.

You: Very, cool.  Thanks, I really appreciate you taking the time to help me out.  Have a nice day.

Finish your coffee and either leave or find another person with an iPhone.

Lather, Rinse, Repeat.

As you see, it’s just as important to test out the ideas that the potential customer proposes (Like a social networking element) as it is to test the idea you walked in their with.

By comparing your idea with products and services people already use, including finding out how much they actually use those products you can get a sense of the real demand for your product and what types of products people might want instead.

It’s important to reach out to people who don’t know you and have no reason to lie to you.  Your friends, family, and neighbors all won’t want to hurt your feelings, so their opinions are essentially worthless.

Starbucks, public parks, conferences/fairs for your product type and anywhere else you can find relevant strangers to bother are prime places to go.  Now is not the time to be shy.

Think of it this way: is your social embarrassment so great that it’s worth missing your chance at success?

In the end, the most important thing is to be willing to walk into market research with one idea for a product or service and walk out with something completely different.

If you’re not willing to do that, you’re destined to fail.