How to Validate a Business Idea with a Landing Page
Do not build a product or service without first running a simple landing page test. I've learned the hard way by investing time, money, and mental energy into creating products and services that fall flat because no one actually wants them. A landing page is a powerful tool to help you validate your business idea before sinking resources into something that may not work.
In this blog, we will explore the steps you need to take to validate your business idea using a landing page, including how to create an effective landing page, drive traffic to it, and analyze the results to make data-driven decisions.
Read How to do Market Research for your Business afterward to learn more ways to validate new business ideas.
What is a landing page?
A landing page is a stand-alone web page. Unlike a website's homepage, which may have multiple goals and navigation options, a landing page incentivizes visitors to take a specific action and is stripped of distractions.
Reasons to use a landing page to test a business idea
There are several reasons why using a landing page to test a business idea is an effective strategy:
- Low-cost validation: Creating a landing page is relatively inexpensive compared to other business idea validation methods, such as building a prototype or running a survey.
- Quick and easy setup: With the availability of website builders, you can easily create a landing page without needing technical skills or extensive knowledge. Many website builders have pre-made landing page templates that you can customize quickly and easily to suit your needs.
- Data-driven decisions: A landing page can provide you with measurable data, such as conversion rates, bounce rates, and click-through rates. By analyzing this data, you can make an informed decision about whether it makes sense to pursue your business idea.
Steps to validate a business idea with a landing page
Step 1: Define your business idea
Start by defining your business idea. As you make progress, your business idea may change. That is perfectly normal, but for the sake of a landing page test, you should have a hypothesis about the following:
- Problem: What problem are you trying to solve?
- Solution: How do you solve it?
- Unique Value Proposition: What sets your business apart from competitors?
- Audience: Who needs your solution?
After you have answered these questions, ask yourself whether you can communicate your business idea in one sentence.
If you don't have a business idea yet, here are some for inspiration:
Step 2: Understand the landing page journey
Before we dive into execution, it's essential to understand the landing page journey. There are three components to validate your business idea with a landing page:
- Acquisition: How do you make your audience aware that you exist?
- Landing page: What single action do you want your audience to take?
- Activation: Does your audience get excited and activate into a customer?
The beautiful thing is that you will get quantitative data throughout the process to make a data-driven decision on whether to pursue your business idea.
Step 3: Make an acquisition plan
Make an acquisition plan by asking yourself the following questions:
- Who is your audience?
- What is the fastest and most cost-effective way to make them aware you exist?
- How will you collect acquisition data?
- What acquisition data will you collect?
Here are some fast and free ways to make your audience aware you exist:
- Send personalized emails: Send personalized emails to your target audience using a free emails finder tool like Hunter and a Gmail account.
- Run Reddit ads: Ads usually cost money, but Reddit has a free $100 ad credit campaign.
- Tap your network: Reach out to your family, friends, colleagues, and more who may fit your target audience.
- Share on socials: Post your landing page on your social media accounts and ask friends to share, so it reaches a larger audience.
- Talk to strangers: Set up at a Starbucks or local coffee shop and ask strangers to check out your landing page.
- Participate in online forums and communities: Join online communities or forums related to your audience or business idea. Share your expertise, answer questions, and engage with members to build credibility and attract attention to your landing page.
Example:
- Who is your audience: Families in Inglewood, California.
- Acquisition tactic(s): Send personalized emails.
- How you will collect acquisition data: Streak.
- Acquisition data: Number of emails delivered, open rate, click-through rate.
Step 4: Create a landing page
Create a landing page by asking yourself the following questions:
- What website builder are you going to use?
- What single action do you want your visitor to take?
- What is your hook?
- Are there any other landing page elements you want to include?
Here is more information to help you pick a website builder and create a landing page:
Regarding the action a visitor takes, not all are created equal. For example, a visitor pre-ordering a product or service indicates more conviction in a business idea than entering an email address. Here are some actions to choose from for your landing page in order from the highest form of conviction (pre-order) to the lowest form of conviction (enter an email):
- Pre-order: A pre-order is the highest form of conviction you can collect on a landing page. It means someone wants your product or service so badly that they will pay you in advance.
- Collect an email and refer a friend: People only refer friends to products or services they are excited about, as they will not burn social capital on something they don't want.
- Fill out a form: If you're unsure of your target audience, having your visitors fill out a form can help you get more information on who actually wants your product or service. This is a higher form of conviction than just an email because it requires the visitor more time to provide all the necessary information.
- Collect an email: Having visitors drop an email is the lowest form of conviction, but that's not necessarily bad. There are many advantages to using email collection as your action. It is the quickest to set up and offers the lowest friction to your visitor, so you cast a wide net that will catch even remotely interested visitors.
Only include additional elements to your landing page if it increases the percentage of visitors to take your desired action. Here are some elements to consider:
- A key benefits of the product section.
- A compelling background image or video.
- Social proof in the form of testimonials, reviews, or press mentions.
- A frequently asked questions section.
Example:
- Website builder: Wix.
- Action: Collect an email.
- What is your hook: Get groceries delivered to your doorstep in 10 minutes or less.
- Additional elements: A testimonial from my mom, best friend, and uncle.
Step 5: Finalize your activation plan
Finalize your activation plan by asking yourself the following questions:
- How will you collect activation data?
- What activation data will you collect?
- What's next for people who activate?
Here are the best ways to collect activation data on your landing page:
- Google Analytics - This free website analytics tool used alone will help you capture the bare minimum amount of activation data, the number of website visitors, and the clicks on your call to action data. In addition, Google Analytics can provide insights into who your audience is and how they found you.
- Glassbox - Heatmap tools like Glassbox can track user behavior on landing pages by showing where users click, scroll, and spend their time. This can provide insights into what elements on the page are most effective.
- Optimizely - A/B testing tools such as Optimizely can help you test different variations of your landing pages to see which version performs better.
Example:
- How you will collect activation data: Google Analytics.
- Activation data: Number of visitors and clicks on the call-to-action button.
- What's next: Send monthly email updates to keep them excited about your progress with product development.
Step 6: Start the landing page test
Now it's time to put things into motion. Put your energy into executing your acquisition plan to drive awareness and get visitors to your landing page.
Step 7: Analyze the results
As a rule of thumb, the more data you collect, the easier it will be to make a binary decision, yes or no, to pursue your business idea.
While I wish I could give you benchmarks to use, it depends on the context of your business idea, audience, and risk appetite. For example, ten email sign-ups from one thousand visitors, a 1% conversion rate, might be compelling enough for you to start a custom piano business since those sign-ups may result in thousands of dollars in revenue with significant profits. But, on the other hand, those same numbers may not be compelling enough for you to start a restaurant since restaurants are low-margin, high-volume businesses.
Non-obvious tips
- Optimize for mobile: As of February 2023, 52.08% of the total web visits are mobile, compared to 47.92% from desktops. With more and more people browsing the internet on their mobile devices, ensuring your landing page is optimized for mobile is essential. This means using a responsive design that adjusts to different screen sizes and keeping your page load times fast.
- Use retargeting ads: Retargeting ads target visitors who have previously visited your landing page. By showing ads to people who have already expressed some level of interest in your business idea, you can increase the chances of them converting into customers.
- Create scarcity and urgency: Scarcity and urgency can be powerful motivators for landing page visitors. Consider using language on your landing page that creates a sense of scarcity (i.e., limited spots available) or urgency (i.e., don't miss out).
Common mistakes
- Focusing too much on design: While a visually appealing landing page is important, it's not the main factor that determines success. Focus on the core components of the landing page and put it out there as quickly as possible to start collecting data.
- Offering too many options: Keep the landing page focused on a specific call-to-action when testing a new business idea. Offering too many choices can lead to analysis paralysis, where visitors become overwhelmed and fail to take any action at all.
- Overloading the landing page with information: A landing page should be concise and to the point. Overloading it with too much information can overwhelm visitors and lead to a lower conversion rate.
Example companies that used a landing page to validate a business idea
1. Robinhood
Vladimir Tenev validated Robinhood, the commission-free stock trading app, with a simple landing page. For the action, the Robinhood team collected email addresses and had people who signed up refer friends. Nearly one million people signed up for early access, making it an easy decision for the team to invest time, money, and resources into building the app. The simplicity of this landing page is beautiful. There is no extra information, just a simple hook highlighting their unique value proposition – $0 commission stock trading.
2. DoorDash
In 2012, Tony Xu, Stanley Tang, Andy Fang, and Evan Moore validated the idea for DoorDash with a landing page. At the time, it wasn't even called DoorDash. The landing page was a simple HTML static page to see if people would pay $6 for food delivery from restaurants in the Palo Alto area. The site included a description of how it works, a Google voice number, and menus from local restaurants. As you can see, the design isn't perfect, but it got the job done because people started ordering online, and the rest is history.
3. Dropbox
In 2007, Drew Houston and Arash Ferdowsi validated the idea for Dropbox with a landing page, which included a sign-up form and a demo video. The sign-up form helped them validate demand for an extremely easy-to-use file-sharing tool in a world that relied on USB flash drives at the time.
Validate a business idea with a landing page today
A landing page may be the best way to validate a business idea fast without spending much money. Remember, not launching is more painful than not learning. So, launch your business idea today with a landing page.
