One of the most valuable skills to have as an entrepreneur is the ability to strip an idea down to its core essence so that you can validate it quickly and cheaply before creating the full product.
This is the story of my most recent launch (GUIToolkits.com), how I tested the market demand for the idea before creating the product, and how I stripped out part of it, made it profitable and used it to bootstrap the rest of the product.
Phase 1: The Idea
In 2010, I launched Keynotopia in 3 hours with $47.50 budget, and had the first paying customers in the first 10 minutes (you can read the full story here). A few months later, I was receiving emails asking if I had similar UI templates for other tools like Visio, OmniGraffle, Illustrator and Fireworks. After doing some research, I found some templates scattered around the web, but they were either incomplete, low quality, or not frequently updated.
In other words, I found no one-stop-shop for someone creating a web or mobile app to buy and download ready-made wireframe and high fidelity UI components for their favorite tool.
So I got excited about the idea of building that marketplace.
But before jumping in, I needed to validate two assumptions:
1) There was enough market demand beyond the requests I was receiving by email, and
2) That people were actually willing to pay for the product if it existed.
At the time, I was working on a couple of projects projects while updating Keynotopia templates, which was consuming most of my time, and I was concerned about another project on my plate.
So I decided to run a fun little experiment.
Phase 2: The Minimum Viable Product
First, I needed to build a proof of concept that would validate my previous assumptions.
I am not a fan of building “Coming Soon” pages, since they don’t provide insights into potential demand or purchase behavior. So I pretended that the product already existed, and built a site where I could measure how many people would go through the entire purchase funnel to buy that product.
I got a WordPress theme from ThemeForest and created an eCommerce site that included various product SKUs (UI templates) for different tools, along with screenshots that I generated with Keynote. I also added “Buy Now” buttons, and hooked up analytics everywhere on the site to measure clicks and conversion.
Whenever visitors clicked the “Buy Now” button, they would be taken to a page where I informed them that the product is still under development, and asked them to leave their email to get notified when I am done with it.
Over 70% of people who left their email addresses ended up buying the product when I launched it later on.
The whole process of creating the website, including the logos, buttons, etc… took less than a day. I used Keynote as my design tool to create new graphics, and to tweak and customize the graphics of the WordPress theme that I bought.
Next, I ran some ads (Google, Facebook, LinkedIn) for a couple of months and drove traffic to the site. I regularly worked on optimizing the design and copy of each page to make sure they converted well, while optimizing for search engine keywords to generate and measure organic traffic.
I ran dozens of A/B tests on several pages until I found the best combination of graphics/copy for each one.
It took a couple of hours each week (mostly on weekends) to measure and tweak, and things were starting to look promising: I was seeing over 4% conversion on some templates, which wasn’t bad for an eCommerce site without an existing brand.
Phase 3: The Minimum Profitable Product
Even though results from the MVP testing phase were promising, I was still concerned about investing time and money to design all the templates for 5 different tools (I’d estimated it would take 6 months to create them all)
Looking at the analytics, I noticed that there was more demand for Axure UI templates than other tools, so I decided to create and launch the Axure UI templates as a standalone product. That way, I would minimize the upfront investment, and I’d know for sure if the numbers I had measured would translate to real sales.
Since I wasn’t experienced enough with Axure, I had to find someone to help out. After testing several designers on oDesk, I found a designer who helped me design the Axure UI templates.
It took 8 weeks to finish them, and in April of last year, Axutopia was launched.
It quickly became a hit with the Axure/UX community and was featured on Axure.com as one of the top UI libraries. Axutopia recouped its costs (WordPress template, hosting, and design contractor) during the first month, which encouraged me to put similar effort and time to take the dive and create the interface toolkits for other tools, like Visio, Illustrator, Fireworks and OmniGraffle.
Phase 4: The Final Product
During the following 6 months, I worked with a full time designer to create the largest collection of user interface elements and icons for those tools. It took over 1,000 hours to finish them (when it comes to the final product, I am a quality freak). I also designed the full website (in Keynote), and outsourced its development.
I paid for the design and development of the full product using the revenue that was being generated from Axutopia.
GUIToolkits launched last February, and it started generating organic sales before I even told anyone about it (thanks to the SEO work I’ve done on the test site).
Don’t just measure potential interest; measure actual demand
Instead of creating a coming soon page with a text field for people to enter their emails, create your site as if the product already existed. Create screenshots and demo videos, add a pricing page, include some buy-now buttons, and measure how many people will click all the way through your purchase funnel.
It’s one thing to ask someone if they would be interested in your product, and it’s another to ask them to take out their wallets and pay for it.
You can bootstrap your idea using a subset of that idea
Big ideas can be overwhelming. They are exciting to tell friends and investors about, but they often require more time and money to launch. After validating your idea and testing market demand, find out if there is part of it that can be created and launched independently. This would enable you to acquire early customers to validate your idea further, and to generate revenue to bootstrap the remainder of the product.
People pay for high quality products, even when there are free alternatives
One of my early concerns about creating GUIToolkits was the existence of free lower quality alternatives. What I found out is that people will pay for high quality products, especially when you’re committed to improving and updating them regularly. If your product targets a professional audience, saves them time or helps them make more money, and you can outline these benefits to that audience, they will pay for it.
Keynote is a great web design tool
I use Keynote to prototype and test apps, but I’d never used it to design an entire site before. It took less than 5 hours to design the whole GUIToolkits site in Keynote, including graphics, logos, typography, etc… It helped that I had chosen a flat UI design for the site, and I was able to translate the elements into CSS/HTML very quickly.
I should write a separate post about my Keynote web design process. In the meantime, there are lots of tutorials here.