Lori Greiner On Shark Tank (Image Source: Instagram/@sharktankabc)
Highlights
- Lori believes Entrepreneurs should gather real customer feedback through questionnaires, in-person research and online surveys.
- Lori feels Testing purchasing intent through pre-orders ensures that people are willing to pay for the product at a profitable price.
- Lori Greiner’s step-by-step validation process can help entrepreneurs with decisions making process for the business.
Shark Tank investor Lori Greiner, who is known for making ideas million-dollar companies, is no new face to converting ideas into million-dollar ventures. With more than 120 patents to her credit, she has established herself as a creative, innovative, and astute decision-maker in the business world.
But according to her, having a good business idea is not sufficient, it requires solid market research and validation to be successful. More recently, Lori offered a systematic methodology for testing business ideas, with a handy step-by-step list that allows founders to know whether their product or service has legitimate market value.
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1. Start with a Questionnaire
Lori’s advice for entrepreneurs is to create a questionnaire designed to gather customer feedback. She suggests to make 8-10 open-ended questions that provide insights into what potential customers actually want and how much are they willing to pay.
This is an opportunity for entrepreneurs to shape their product around actual customer needs, not guesses. By getting feedback early on, business owners are able to pinpoint potential weaknesses and strengths before product launch.
2. Conduct In-Person Research
The second step is to validate the idea by engaging face-to-face with people. Lori recommends business owners to determine at least three venues where they can do in-person research.
By collecting information from various customer groups, business owners can determine how their product performs in the various market segments. This aids in the improvement of the target group and the adjustments to be made in the product.
3. Leverage Online Research Tools
In addition to face-to-face research, Lori also points to the potential of online spaces. She invites business owners to identify virtual platforms—like surveys, social media polls, and forums—where they can get in touch with more people.
This method enables companies to gather information from a greater number of customers and a more diverse group, allowing them to gauge the total demand for their product.
4. Verify That People Actually Enjoy the Product
After gathering information via questionnaires and research, the second step is to verify customer interest. Entrepreneurs need to look carefully at customers’ reactions, survey outcomes, and comments to identify if people are really eager about the product.
This stage is a safety net, preventing business owners from putting too much capital too early into an idea that does not yet have sufficient market demand.
5. Gauge Customer Demand
Lori points out that the need to understand what is presently going on in the market is essential before introducing a product. Entrepreneurs should observe the performance of their competitors and assess if the market is saturated or the place for growth. A venture into consumer attitudes, competitor behavior, and industry trends will aid businesses to identify market gaps and set themselves up for success.
6. Test Pricing and Willingness to Pay
It is important to understand what people are prepared to pay. Lori recommends that entrepreneurs take a look at the market pricing and assess buying intent by pre-ordering or conducting crowdfunding campaigns. This helps in ascertaining if the product can be priced competitively and still be profitable.
“Look at market pricing and what customers are willing to pay.” Lori Greiner
7. Price It Right
The last step is determining the retail price—but only after doing all the research steps before it. The retail price should consider: Production cost, customer’s willingness to pay, and competitive placement. Following this systematic step-by-step process allows entrepreneurs to ensure they are not only releasing a product—but releasing a product that will sell.
Lori Greiner’s business validation checklist is an entrepreneur’s guide to success. Her method reduces risk and increases chances of success by emphasizing actual customer demands, trends in the market, and pricing strategies. If business owners heed her professional recommendations, they can transform their concepts into money-making businesses, rather than start blindly and expect to succeed.
Entrepreneur, auteur, raconteur. Rob Merlino is a blogger and writer who enjoys the Shark Tank TV show and Hot Dogs. A father of five who freelances in a variety of publications, Rob has a stable of websites including Shark Tank Blog, Hot Dog Stories, Rob Merlino.com and more.
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