A smoke test is basically pretending that a certain product or service exists to see whether potential customers are willing to buy.
A key aspect of a smoke test is that people think they’re making a real purchase, not filling out a questionnaire, which can be notoriously misleading. It is important, however, not to cheat these potential customers by promising to deliver a product that is not ready to be delivered.
A smoke test is a great way to gauge the interest of potential customers regarding certain aspects of your business model.
A test dashboard can be a good way to track the smoke test
Landing Page Test
Most web services have websites containing a fairly limited amount of information, often a single-page scroll-down website with information about benefits, pricing and so on, after which you are urged to sign up for a product or free trial.
Before actually building the web service, it is quite easy to set up a website that describes the service as though it actually exists. Once potential customers elect to sign up, they are taken to a website that displays a message like “Product arriving shortly. Would you like to receive an email when our product is ready?” Otherwise, the product or service is delivered through a blog-around solution.
A famous example of this test comes from the early days of online retailer samples, when people were still unsure whether anyone would actually buy shoes online. One company, instead of using a great deal of money to purchase inventory, simply set up a site to sell shoes. When somebody purchased the shoes, someone from the company went to the local shoe store, bought the correct size and shipped the shoes to the customer.
While this cost them a little bit of money, it also allowed them to test the core assumption that people would buy shoes online without spending vast amounts on inventory for a variety of shoes in a variety of sizes.
A landing page smoke test can be a good way for you to test the basic assumptions of your own business model. Are people interested in your value proposition? Are you targeting the right customer segment? These and other questions can be answered by a landing page smoke test.
When doing a landing page test, advertisements can be a great, inexpensive way to drive traffic. The shoe company in the example above probably had an AdWords campaign for the keyword “shoes.”
Besides generating traffic, an AdWords campaign can be a test of something even more fundamental: will any of the people who Google your keyword actually click your ads?
Physical Smoke Test
Smoke tests are not limited to the online world. You can use the same principles to design a smoke test in the physical world.
A young woman I know gave me a great example of a physical smoke test. She was thinking about setting up a business that would buy used cars from private owners. To test demand, she simply walked around her neighborhood asking people if they wanted to sell their car to her.
An important aspect of her approach is that she did not ask people if they wanted to sell their cars to her in the event that she started her order business, as in a questionnaire. Rather, she went up to them and said: Did you you know that you would be able to get so-and-so that model of car ? would you be interested in selling it to us ?
Not the Final Answer
Results from smoke tests can be valuable when developing and designing business models. However, it is important to note that they do not hold the ultimate truth. While they can be very valuable data points, it is never a good idea to make decisions based on a single point of data.
It is always best to spend a significant portion of your budget testing core solutions rather than building a huge product based on limited information. Such testing can be done using smoke tests or a subsequent minimum viable product with ongoing testing.