Case Study – How To Validate Your Business Idea

validate business idea

As we’ve always said, ideas are nothing without execution but how do we know when an idea is even worth while pursuing? Many times entrepreneurs will use their gut feeling to make a decision if its worth the effort to put in the sweat, money, and tears, to take an idea to birth. But what if we told you there are some more methodical ways of validating your business idea. After all, any business would love to have people lining up and flocking to them consistently. Today we’re here to show you how we used free tools validate our business idea; an app idea to be more specific.

Step 1 – The Idea

We’ve talked many times on how to find the perfect idea. We honestly think any idea has potential as it’s in the execution of the idea that can take it to success rather than the idea itself. See this article on how to find a business if you’re having trouble. We’re not going to re-invent the wheel but suggest to create a list of business ideas you think have potential and narrow it down as you begin your research. Start by solving your own problems and just being aware of your surroundings and finding opportunities.

Our idea is an app for the iPhone, iPod Touch, and iPad devices that will be used for social networking purposes, something users practically do/use everyday. One thing about apps that we think is important is the lifetime value of a customer. If you create an app that will be used once then it’s worthless. If you create an app that will force the user to have to open it every time to use then your chances of success will be higher. Our app idea certainly is not a revolutionary idea by any means since there’s already a few similar apps on the market place but we honestly feel like we can create something better. Some of the competitor apps actually are in the top 25 for its category which is a good sign that there’s a demand but also competition.

Step 2 – The Demographic

validating our ideaOur demographic begins with smartphone users, and more specifically with iPhone users since the app will be created for the iOS platform initially. According to Apple they have sold 365 million iOS devices. Our app caters to iOS4 and up so its obviously a smaller sample size but even 1% of that market share would be amazing. Most likely this app will be used in the 14-30 year old age group worldwide but a little bit weighted towards females, since it deals with a specific type of behavior within social networking.

Something we learned from reading Noah Kagan’s feature on Tim Ferriss’s website is to use Facebook ad targeting to see what how many people have an interest in your topic. In my case, we did two searches, one was really specific to the app idea and functionality, and the other was a little bit broader. The audience with half a million users is dead on users who would currently have an interest in what our app can do. However, there’s potentially 10.5 million users we can tap into. But realistically anyone with an iPhone would could be a potential customer however not everyone needs our app since its more for fun but still enhances the experience.

Step 3 – The Research

As online marketers, we’ve been trained to do our research a certain way. It’s always been to use free tools like Google’s Keyword Tool and Google Trends to get a gauge on user interest. This is very important for us in validating our idea as you will see in a little bit.

Using some basic keyword research, we typed in our main keywords in Google’s Keyword Tool. These same keywords would be what people in the app store would type in also. With that I got these results:

Google Keyword Tool

As you can see there’s quite a bit of search volume. Our main keyword gets roughly 6,600 searches a month and the secondary keyword (but still important) gets roughly 4,400 searches a month. The third keyword is the same as the second keyword but in reverse order.

Next thing is to plug in the same keywords into Google Trends and see if it’s trending, stagnant, or on a decline. As you can see, there’s quite a bit of interest and it seems to be on the up and up with a slight decline here and there but overall rising.

Google Trends

We also think it’s pretty important to browse the social web to see if there’s any discussion from people looking for something that you’re about to create. The skies the limit in searching Tumblr, Facebook, forums, Q&A sites, etc but we like Twitter since it’s pretty public and meant for conversation. You can use Twitter’s Advanced Search to search for people that fit your demographic who are also potential customers. Here’s a sample search of tons of people looking for an app to manage multiple Instagram accounts from one login. We wish we had that ability! ;)

Twitter Advanced Search

Step 4 – The Validation

Once we determined that there was definitely a market for our idea, we had to validate it one step further. Again, coming from an online marketing background, we chose to validate that idea by making a website around the topic/app. This was to solve two questions: 1) are people actually searching for this type of app like Google suggests? and 2) can we capture these people and build up a list of people who want our app?

There was only one way to find out… so we built a website! Now if you’ve read our affiliate marketing eBook: Affiliate Marketing 101 – How To Make Money Online, this section will make complete sense. If not, we highly suggest you check that out so you can learn how to build and make money from websites.

With domains there’s something called Exact Match Domains (EMD) which is when your domain name is exactly the keyword you are trying to rank for. For example, if your keyword was “soccer tutorials” then the EMD equivalent of that would be Usually, but not always, an Exact Match Domain does see a small boost in visibility since Google thinks it’s a branded term thus giving it a higher rank with less effort. Lucky for us, our main keyword was available as an Exact Match Domain so I purchased the domain through GoDaddy and set up webhosting through Hostgator.

The next step was to build out the website that was more focused on being a landing page to capture interested email subscribers. All we did was found a free WordPress theme and added a few pages of content relevant to the idea but also had one page strictly about the app. However, all the pages had an area to capture someones email address. There are a ton of free themes for WordPress that serve this purpose. Just Google things like ‘wordpress squeeze page’ or pay for Unbounce or Optimize Press. Since our idea is app related, it also made sense that our theme was responsive meaning that it was optimized for desktop, tablet, and smart phones.

validating visitors idea

We won’t get into too much detail on search engine optimizing the website but it takes the usual backlinks to get it at a good position. Again our Affiliate Marketing eBook explains how to optimize a website. According to Google, the two main keywords have a combined 11,000 searches a month. Let’s say the #1 spot on Google gets 35% of that traffic. That means our website could get 3850 hits a month or about 128 per day. Well we’re glad to report that within 2 months we’ve been able to get the website onto page 1 of Google and within the top 4 but not the #1 spots yet. However, we’re still easily getting nearly 200 hits a day already.

We do want to mention that tons of people prefer to use Pay Per Click from Google Adwords to do the same thing since it’s near instant traffic but it comes with a cost. The decision is up to you but you can’t go wrong either way for validating your idea.

Step 5 – The Result

With all this traffic coming into our site, our main goal was to convert that traffic into email subscribers. Basically people who are genuinely interested in our app and ready to buy/download it when it’s ready to launch. As mentioned previously, we had an opt-in form on every single page of the website so a user would never miss it. We kept it really short and sweet and simply stated for the user to sign up to be notified when we officially release the app.

Our preferred choice of email subscription providers is through Aweber which is what we use for this SE as well. It’s easy to use and extremely affordable.

Although the site is still relatively new, the response has been fantastic to say the least. Our opt-in sign up rate is converting at 5% as you can see below. Not too bad if you ask us. If we average 200 hits a day and keep converting 5% then our interest list would grow to 300 people for the month.

Aweber Optins


As you can see it’s pretty obvious we’re onto something here. All it took was a little bit of time and a small investment on our part for the website to determine if we should move forward with our idea. We feel much more comfortable now that people actually are interested. This exercise answered both previous questions successfully. People are Googling this stuff (probably in the app store too) and people are already getting hyped up. Now will our app be a success like Allen Wong‘s or will it be a flop? Stay tuned to find out…