A feasibility study can help you decide whether an idea is worth testing. The pilot starts when you put a real offer in front of someone and ask them to give up something for it. That could be money, time, or access to the people who would have to use it.
In 2016, I put together a conference from scratch, from financing through to execution. It became the Asia Investment Conference, which we went on to run annually. I later recognised a similar idea in investment banking. Equities teams called it corporate access. They brought investors and companies together as part of their work with clients. There was a familiar service at the heart of what we were building, even though the platform itself was new to us.
Years later, I took part in a test run for a new product as part of a market feasibility study. I had seen plenty of those studies in banking. It felt different to be on the side responsible for deciding what to do with the findings. After hearing one rejection after another, I wondered whether we could turn the product into a commercial venture.
Find out what the customer declined
When a customer turns down a pilot, I want to know exactly what we asked them to do and how they responded. A buyer who already pays for another solution is telling us something different from a team that barely encounters the problem. The first conversation gives us a way to investigate what might make switching worthwhile. Several of the second kind might change whom we approach.
Imagine a founder testing a tool that helps finance teams prepare monthly reports. Several controllers like the demonstration, but decline to trial it because setting up the tool would consume a reporting cycle. The founder could test a smaller offer that works with a file the team already produces. The next test is whether anyone sends the file and uses the result at month end.
Give the next round a question to answer
Before putting more money in, I would write down the assumption we are testing, the smallest change that could test it, and what would count as progress. If we are testing willingness to pay, we need someone with budget authority to consider a price. If we are testing whether we can deliver profitably, we need to track how much staff time each customer requires. A founder working late to make every trial succeed can easily underestimate that cost.
A team needs enough persistence to get past the first few rejections. It also needs to notice when the same answer keeps coming back. If a change to the offer gets customers to take a step they previously declined, there is a reason to test it again. If the behaviour stays the same, I would change the question or put the money to work elsewhere.
Adapted and expanded for IJK Capital Partners from Finding the escape velocity on Kenny Ng’s personal blog.