The Importance of Product Testing For Business
Daniel Nathanson, Ph.D. from UCLA Anderson Graduate School of Business, mentions some of the common mistakes that entrepreneurs make when starting a business and emphasizes the importance of product testing.
There's a long list of mistakes entrepreneurs make. The first is trying to plan design and make the best most perfect product for the target market before really knowing what the customers want. And you can't really know what the customers want until you test the product on your target customers. The popular term (now made famous by Eric Ries in The Lean Startup) is to create a "minimally Viable Product." So don't make the mistake of trying to write a perfect plan and make a perfect product. Instead, get something out into the field to early adopters before it is perfect because chances are it won't be right anyway, and you will have wasted lots of time and money building a perfect product that nobody wants.
So create a workable product, put it into the hands of early adopters (who by definition are friendly customers), and then test it and measure the results. Do this over and over getting the true feedback from the market until it's ready for mass adoption. So said another way, you have to do as Nike says and "just do it". Learn as you go and iterate on both your product and your plan.
Another common mistake many entrepreneurs make is they fail to realize that the primary goal of a business in the early stages is simply survival. The most critical mistake entrepreneur's make early on is underestimating the amount of time and effort and capital necessary to get it right, to go through the build measure test cycle and reach break-even. As a result many companies are dead before they have a chance to discover that true opportunity. So make sure to conserve cash as you go and have enough available cash in case it takes longer than expected. Remember the entrepreneurial process is in a way like digging for gold. You need to have the time and the resources to keep digging until you find the sweet spot.