Last in a series with Victor Cheng, a San Francisco based business coach, and author of the Recession Proof Business.

Tom:
It’s expensive to create a new product or engage new customers in a new service. How does a company make those decisions without getting spread too thin?

Victor:
Start small. Take baby steps.

In the software industry, companies “invent” new software technologies that exist only in the minds of the management team. First, they create a PowerPoint presentation describing the software (that does not yet exist). Then they market the product as if it existed.

This is known as “slide-ware” (software that does not exist in a form other than PowerPoint). Critics of this process call the product “vaporware” because it doesn’t yet exist in physical form.

In the direct marketing industry, this is called a “market-test”. They create a marketing promotion for a non-existent product, send the direct mail piece, and count the corresponding orders — then promptly refuse to take the customer’s money.

The idea is to see if the product will sell, before committing R&D dollars to actually creating the product.

Find the cheapest, easiest way to “market-test” demand. If you can present “slide-ware” and get a large purchase order out of it, that’s a very favorable sign the product is worth investing in development.
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You can download a free e-copy of Victor’s book, The Recession-Proof Business. This concludes our series with Victor Cheng. He’s a bright guy, check him out.