Chapter 3: How Do You Know If You Have a Really Good Idea?
CHAPTER 3
How Do You Know If You Have a Really
Good Idea?
Key Takeaways & Action Steps
1. Testing Your Idea in the Real Market
The “Well, I’ll Be Damned!” Test
Developed by entrepreneur Wilson Harrell, this is a practical, low-cost way to gauge genuine
market reaction before investing heavily.
How to Run the Test:
1. Take a sample of your idea to at least 20 potential buyers.
2. Critically: do NOT test with friends, relatives, or neighbors — their feedback is biased.
3. Watch for spontaneous reactions like “Well, I’ll be damned!” or “Why didn’t I think of
that?”
4. If most people do NOT react that way, you likely do not have a winner.
Follow-Up Questions to Ask Positive Respondents:
• What would you be willing to pay for this?
• If it were available at that price, would you definitely buy it? Maybe buy it? Why?
• How would you use it?
• Would you consider investing in it? Why or why not?
💡 The Swap Meet Test
Get even a primitive version of your product made, set up at a swap meet, hang a
microphone around your neck hooked to a loudspeaker, and try to sell it — just like the
slicer-dicer guy at the county fair. If you can’t sell it there, you probably can’t sell it
anywhere else.
2. Dan Kennedy’s Eternal Truth #5
⚠️ The Most Important Rule of Entrepreneurial Marketing
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Chapter 3: How Do You Know If You Have a Really Good Idea?
You cannot trust your own judgment. Test, test, test. Then test some more.
The core principle: get the actual marketplace's assessment, preferably early rather than late, at
as little cost as possible. Patience in testing is one of the most critical entrepreneurial
disciplines.
3. Ask Your Customers
The Stew Leonard’s Supermarket Story
The store regularly held customer feedback sessions over coffee and doughnuts. When they
introduced “Fresh Fish” in neat packaging, sales didn’t improve — because customers didn’t
believe it was fresh. Feedback revealed the real insight:
• Customers wanted the experience of a fish market — open trays, beds of ice,
unpackaged fish.
• They had “over-served” by sanitizing the experience. Sales soared once they
recreated the fish market feel.
• The experience you create and deliver matters enormously.
The New Economy Customer Reality
New Economy customers know they hold the power. They want more than goods and services
— they want to feel like stakeholders. They expect:
• To have a say-so in the business.
• To be treated as partners, not just consumers.
• Products and services customized to their specific needs.
• On-demand delivery of exactly what they want, when and how they want it.
Tools for Gathering Customer Intelligence
• Detailed surveys and questionnaires (not token “Suggestion Box” gestures —
sincere data collection).
• “Build-to-Suit” product development: survey customers before planning events or
products, then show them you built what they asked for.
• Continuous acquisition of intelligence about evolving customer interests, desires,
and preferences.
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📌 Real-World Example: The Appliance Retailer
A major electronics retailer discovered customers hated waiting all day for deliveries. He
built a guaranteed 2-hour delivery window system and made it his main advertising promise
— with fantastic results. He checked Yellow Pages ads in 200 cities and found no one else
doing it. Listening to customers created a lasting competitive advantage.
4. Ask Your Counterparts & Competitors
One of the easiest, fastest research tasks: examine the advertising and marketing of others in
your category of business, locally and beyond your geography.
What to Look For:
• Advertisers doing something nobody in your area is doing — this is a potential
opportunity to import.
• Products or services you haven’t considered offering.
• Weaknesses in competitor pricing, offers, and presentations you can exploit.
How to Research Competitors:
• Visit their stores or buy their products firsthand.
• Visit their websites, watch their online videos, download their free materials.
• Attend their webinars, take virtual tours of their offices.
• Have their salespeople come to call on you as a “prospect” — observe their whole
process.
📌 The Pest Control Company Example
One of Kennedy’s members who owns the most successful pest control company in his city
borrows a house every few months and has competitors’ salespeople and technicians come
through, putting them through their paces. He is not obsessed with competition — he is a
serious student of his competitors.
5. Smart Direct-Mail Testing
Direct mail is the best testing tool available to most entrepreneurs because it is the easiest
medium in which to measure results. Other media are far harder to test:
• Yellow Pages: locked in for 12 months, cannot be changed.
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Chapter 3: How Do You Know If You Have a Really Good Idea?
• TV infomercials: expensive to test different ideas or offers.
Advantages of Direct Mail Testing:
• Cheap and highly targeted.
• Split-test one letter against another, or one offer/price/premium against another,
for just a few hundred dollars.
• Tests can be as small as a few hundred pieces mailed.
• Once you find a winning formula, you can use it for years.
Modern Fast Split-Testing Options (Low/No Cost):
• Email blast: set up two identical websites with one variable changed (headline,
price), send every other visitor to each version.
• Fax blasts: split your list and test one variable at a time.
• Offer something free (report, CD, sample) to “dry test” interest without illegally
selling non-existent product. If they won’t take it free, they won’t pay for it.
6. “Steal” Already-Tested Strategies
💡 Kennedy’s Secret
Inventing a new idea is a lot of work. Stealing a successful idea is a lot faster, easier, and
more likely to yield successful results. Top-tier copywriters all use “swipe files” to recycle
what is known to work rather than experimenting unnecessarily.
How to Apply This:
• Build a “swipe file” — a reservoir of marketing content (ads, letters, campaigns)
that have proven to work in your industry.
• Research your industry, counterparts, competitors, and customers thoroughly. The
more you know, the better your starting “guess.”
• Adapt proven letters, headlines, and campaigns from other contexts to your own
business, changing only the relevant details.
• Keep your reservoir current with continuous research and acquisition — this
drives both effectiveness AND speed.
Speed is critically important in The New Economy. The blank sheet of paper is the enemy of
speed. A swipe file eliminates the blank sheet of paper.
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7. Moving Ideas from One Business to Another
Some of the most profitable innovations are simply successful concepts borrowed from
completely different industries:
• Drive-up windows: banking → fast food → dry cleaners, beverage stores, florists,
even casino sports betting.
• Fractional ownership: time-share real estate → fractional jet ownership.
• QVC/home shopping: Tupperware home parties → television → a million viewers at
once.
• TV infomercials: carnival and county fair pitchmen → direct-response TV.
Somewhere right now, outside your business and its industry, in an apparently unrelated field,
lies a moveable idea that could revolutionize your profits.
Making Your Business “About Something”
The most powerful moves are sometimes about reframing what your business stands for, not
changing what it does:
• Domino’s: focused on delivery, not pizza.
• Subway: made itself about weight loss and healthy eating, not fast food (Jared
campaign).
• Apple: reframed from “for nerds” to “for the cool kids.”
⚠️ The New Economy Mandate
Just producing or providing good products or services at good prices is nowhere near
enough to justify your existence and command the interest of customers. You must stand
for something, and continuously adapt based on customer intelligence.
8. On “Creativity” in Business
Kennedy uses the word “creative” with caution. Artistic creativity — inventing entirely new things
from nothing — is largely not what works in business. What works is:
• Practical creativity: borrowing, adapting, combining, and transferring proven ideas.
• Testing and refining, not inventing from scratch.
• Speed over originality: adapting a proven idea in 20 minutes beats inventing
something new in 20 hours.
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Master Action Steps — Chapter 3
✅ ACTION STEPS
1. Run the “Well, I’ll Be Damned!” Test: identify 20+ real potential buyers (not
friends/family) and gauge their spontaneous reaction to your idea.
2. Get a primitive prototype made and test it at a swap meet, trade show, or public
venue before spending money on advertising.
3. Set up a formal customer feedback process: surveys, coffee chats, or questionnaires.
Make it sincere, not just an appeasement exercise.
4. Build a “Build-to-Suit” loop: ask customers what they want before building events or
products, then show them you built it.
5. Do a competitor audit: visit their stores, buy their products, review their websites, and
have their salespeople call on you as a prospect.
6. Research counterparts in your industry outside your geography for marketing ideas
nobody in your area is using yet.
7. Set up a split-test using email or fax: change ONE variable (headline, price, offer)
and measure the difference in response.
8. Use free offers to “dry test” a concept before producing inventory or investing in
production.
9. Build and continuously update a swipe file of proven ads, letters, and campaigns from
your industry.
[Link] outside your industry: identify at least one concept or mechanism from a
completely different field that could be transplanted into your business.
[Link] what your business is “about” — identify the deeper value or identity it
delivers beyond the product or service itself.
[Link] to the eternal truth: never trust your own judgment alone. Always test, then
test more.
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