Let me sum this up in one sentence:
As a startup or new business, the amount of time you spend writing up a sexy business plan to pitch investors would be better spent running a $500 PPC campaign testing your idea.
The pain point for me comes from both sides. I have new business ideas all the time, much like other entrepreneurial people. I also do the investor/angel thing, mostly with my boys here on GrowthPartner.com.
You can save everyone a lot of time and trouble with a simple PPC campaign. Doesn’t matter what side of the coin you’re on. Let’s look at the how and why . . .
The Business Idea Side
The ‘market potential’ for your product means nothing without testing. Back in the day, you had to rely on market surveys and other empirical data to determine if your business idea had any mettle.
That was expensive. The intention, though, should remain with the entrepreneur of 2010.
You are lucky enough to live in a world with Google Adwords. This is a good thing. The costs of launching a new business online are hastily reducing to zero. Testing a business idea or even a half-baked, half-assed business-sorta idea, is easy. So do it.
Stop thinking about writing a business plan (that you mostly copy of some web template – be honest), and start here:
1. Register a domain name. Doesn’t have to be good. Starting a bird feeder biz? Get birdfeederdepot1.com.
2. Get hosting, install the CMS of your choice.
3. Make 3-4 landing pages. Ask questions. Find out some key answers to the market you are hoping to serve with your genius new idea. Offer to sell your service right now.
4. Setup an Adwords campaign and spend $500.
5. Read the answers you get. Scour the analytics, the keywords and clicks. Any sale or response is good. Email your new ‘customers’ and find out more about them.
Now it’s time to reflect.
That was easy wasn’t it? And informative? You bet. Guarantee you have a different perspective of your starter business after a little Adwords campaign and ‘customer’ interaction. Guarantee you saved yourself from future, more expensive mistakes.
The point is, this is so easy and cheap to do, you should do it. There’s no risk in doing so, and the upside is possibly priceless.
It could save you from wasting 9 months of your life chasing a bad idea. It could teach you what people really want, not what you think they want. It makes you get serious.
The Investor Side
As an investor, I want more of the aspiring to take the time to use Adwords for research. Putting your idea, or at least a shell of your idea, in front of the right audience is very ‘real world’.
Business plans don’t equal funding. A business plan lives somewhere else than the real world. Unfortunately, success will only come outside those .doc walls. Maybe you feel safer with just a ‘plan’?
A quick test PPC campaign toughens you up. That’s what I like.
Also – How immune to BS business plans do you think a seasoned angel or VC is? I am 27, and if I read one more sentence about the ‘market potential’ of an idea with 0 customers and 0 test customer interactions, I am going to flip.
If you’ve tried some things online, you’ll ask better questions of your investors. You’ve saved us all a bunch of time. You don’t need me or any other crusty angel to help you right now. Go do, and come back later.
Potential investments that have a passionate leader, a verified business model/service, and existing revenue are so much more inviting than a fluff plan about market potential. While you may not make it that far in your Adwords test, you’ll be a lot closer than otherwise.
Takeaways
Don’t write a business plan and try to pitch investors without running online campaigns that force you to interact with your desired customers. You don’t know what people want. Use the easy and cheap tools the internet provides to make yourself more refined, and wiser, ahead of seeking investment.
Image: vbsuresh
