The best way to test an idea is to go to the market place and seek out actual prospects for the idea. Then, try to get them to sign a “non-binding” letter of intent that should you bring this idea to the market place that they would be interested in buying it. In the process, you will find out all sorts of information, including the fact that you may be the fifth person that’s been to see your prospect with the same idea in the past six months. However, make sure that the letter is on their corporate letter head. If they are willing to provide you with such a letter then this is a pretty good indication of its market potential. If not, maybe it isn’t such a good idea.
For example, a typical letter which has used many times, in all kinds of sales situations, with great success, might go as follows:
Your Name
AddressDear Sir:
Please consider this non-binding letter of intent as an expression of our interest in your idea for ( x ) should you bring it to market. Under no circumstances is this a commitment on our part to buy ( x ), but rather just an indication of our possible interest.
Best regards.
Executive name
Title
Company
These letters of intent will be enormously valuable in raising money for your new venture. Of course, some new Internet based entrepreneurs test the market by getting orders for new applications before they build them which is even better. This is really testing the marketplace.
Entrepreneurship in Ireland