When To Kill Your Business Idea

Now I remember why validating a business is difficult. Because it’s the first taste of reality slapping you in the face.

Picking the idea is like walking on air; validating it is like trudging through mud.

By the numbers

99 survey responses received. My validation price was set at $25 based on some rough unit cost estimates:

Product  – $10
Shipping – $6
Random – $3
Payment processing – $1

Total cost per unit – $20
Minimum desired profit per unit – $5
Minimum product cost – $25

Long term costs would decrease (and profits increase) with scale, but I prefer to plan conservatively.

Ultimately, 18 of the 99 survey respondents gave me their contact info and said they’d pay atleast $25 to pre-order a Giant DIY Kit — roughly a 20% claimed conversion rate. That seemed pretty good.

The problem was that there was no consensus on which kits people wanted. Some wanted Giant Bath Bombs, others wanted Giant Slime Balls, and still others wanted Giant Reese’s Peanut Butter Cups or Giant Ice Cream Cookies.

I was targeting at least 10 pre-orders for a single-item before moving forward with a first run. But no single DIY Kit received more than 8 votes amongst pre-orderers. That’s a red flag. Especially because it was unlikely all 8 pre-orderers would pay.

Qualitative findings

In some ways, the qualitative responses were more influential than the numbers.

Parents preferred non-edible kits, like Giant Paper Airplanes, because those are less messy / sugar-y and offer learning value. That eliminated the cool factor for me as I had been envisioning parents and kids making these Giant Gelatin Coke Bottles in their kitchen and taking hilarious photos with them.

I saw this as something you’d do on a rainy day and then throw away after you take the pics. Some parents hated that these DIY Kits wouldn’t have lasting value.

Adults without kids liked the novelty more than parents and could see themselves posting photos of their Giant DIY Kits on Instagram, but they were less willing to prepay.

Altogether, only a couple people seemed super excited about the Giant DIY Kits. Like they HAD to have it. This was concerning as you need some raving fans in the early going to give you momentum and motivation.

The best thing that happened

There was a fear in the back of my mind that if I didn’t act on this, someone else would. I’m no longer worried about that. There’s no emotional attachment or fantasy left. Data is comforting.

That’s well worth the many hours spent on the validation.

Summary

I’m killing the Giant DIY Kits idea for three reasons:

1 – Then survey numbers were just OK, not great.
2 – My passion for the idea started to wane once I read the survey responses and found that parents did not like the edible versions of the Giant DIY Kits.
3 – My wife wasn’t too excited about this idea.

What’s next?

Tuck my tail, admit defeat, and pick a new idea to validate. Vetting the Giant DIY Kits idea reaffirmed the importance of validation for me. It’s also strengthened my drive to solve a painful problem for a specific target audience.

The questions now are: which problem to solve? and for which audience?

Please add your suggestions in the blog comments.

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