Sell Concierge Service
With this test we enter the realm of “fake it before you make it“, and we are validating customers demand by selling a makeshift product that we pretend to be the real thing.
Just to clarify: this does not mean we are deceiving customers! They are going to get the exact service for which they are paying for, nothing less. However, what is in the background is quite Do-It-Yourself, as what would enable the service is so complex, expensive and full of uncertainty that instead of building it we will be just doing it…through the founders’ manual work.
A good example is how Nick Swinmurn founded zappos.com back in 1999. He had an idea to sell shoes online. He could have raised enough capital to buy a giant warehouse, put in place a complex value chain, stock million of dollars worth in shoes and send them to customers ordering online. All this provided that he had been able to find someone believing in his idea and giving him funds, and most importantly, that customers were willing to buy shoes online. Instead, he made a deal with a few shoe shops in his neighbourhood, took pictures of the shoes and published them on his landing page. If a customer ordered, he would go to the shop, buy the shoes and send them by post. This helped him validate his idea, prove with traction that there was market demand and then raise the money he needed to build the actual service he had in mind.
As you can see, selling a concierge service requires a lot of work from the founders, and it’s not intended to be ready for scaling, or even to make a profit. Let’s imagine this: a concierge service for testing the search engine idea for google could have been a form where users would submit a request, founders would receive the search term by email, would manually look for related urls through a list, and then send them over to the users by email.
Selling a concierge service it’s a learning exercise, it helps validate a value proposition, de-risk the new business idea, and get plenty of insights to put together a meaningful financial plan.
And if orders start piling up, you will have enough validation to meet with investors and convince them to give you the funds required to automate the most time consuming and customer critical operations, thus creating the proper infrastructure able to deliver the value proposition.
The concierge service requires a landing page with an order form able to accept customers payments, and advertising campaigns to drive traffic.
- Use this test to: validate a value proposition for a new product or business idea, get insights for a financial plan, get traction either to convince investors or to decide to take the plunge.
- When to use: you have a competitive value proposition already validated with customers in cheaper ways, and you want to try the real thing.
- Time and resources required to set up: providing the actual concierge service might be extremely time consuming, depending on the service.
- Evidence level: very high. Customers are buying, leaving you feedbacks. It’s like you are really live with your business idea, just at a very small and DIY scale.