Have you been thinking of starting your entrepreneurial journey? Before you think of any business idea and bring it to the floor, it is imperative to analyse the market. Competitive analysis is the foremost thing that must be taken into consideration. Without any market research your idea can definitely go for a toss unless it has been backed up by multiple fall back plans and you have a clarity of what has been trending in your niche market. So, let’s dig deep and understand what is idea validation and how to do it before you start your new business venture.
What is Idea validation?
Understanding the viability of your business idea is the foremost process of validating and testing your venture. Market validation is imperative to ensure the product or services you are going to offer is actually needed in the market. Other than that, before entering a niche one must also calculate the risks involved. Risk mitigation plan is necessary to test if the start up idea is feasible or not. If the people are not ready to invest in your product, there is no point in wasting your time and skills on such an idea. That is why it is always advisable to test.
Why is it important to validate your startup idea?
Launching your startup without validating the idea is like bringing the catastrophe to yourself. Without having a proof of concept you won’t be able to judge whether you are plunging yourself into a profitable investment or landing yourself in a soup. Here are some of the major reasons for validating the idea.
- Eliminate the risk of launching the wrong idea
Everybody likes the business idea they have come up with. When a particular business idea is stuck in your head, you become obsessive about it and that excitement refrains you from seeing the possible flaws it can have. It is, therefore, necessary that the idea has been verified and tested with at least a few customers in order to check it’s viability.
- Check for the demand
Ensuring that the product or services you are going to launch in the market has real demand gives you the opportunity to improvise your product. Checking on the customers’ likes and dislikes will also help in changing the display or features as per the customers’ likings. You must check what your potential customers could need and what are their pain points to which you can provide solutions.
- Try to sell the product
Before launching the product in the market, if the start-up idea is sold to at least 5-6 customers the viability of the product can be easily measured. By selling your product to customers you will also be able to identify the future requirements and the flaws in your current model.
- Reduce cost
Idea validation minimises the cost because you won’t spend your money and time on your entrepreneur ideas that won’t be profitable. If the idea doesn’t have a good customer demand then there is no point in fueling the energy in that direction at all.
Steps to validate your startup idea
Step 1: Clearly define your problem statement
Identify and define the possible problem clearly instead of trying to get to the solution. Write down the problem, keep it simple and to the point.
For instance –
- A door-to-door grocery facility is not available for your customers.
- Design professional graphics for social media
Step 2: Determine the level of Problem
There are many problems which could be identified but it is necessary to identify a problem which comes as the biggest pain point amongst the top 3 that your customers are experiencing on priority. In order to learn the gravity of the problem you must ask certain questions before heading for the next step, like:
- Do they have a problem? If yes, how serious is it?
- What are they doing to solve the problem?
- Will they be willing to pay for the solution?
Step 3: Properly Determine Existing Solutions
After talking to your potential customers you will definitely get an idea about the thought process they have, the kind of solution they need and which company or products they look up to. You need to gauge their references. For instance, are they quoting or talking about a brand or a popular product? You need to identify where there is already a market and the loopholes of that particular market.
Step 4: Identify Pain points in the Existing Solution.
You must understand the user’s perspective of the product they are using or have used in the past. Try to identify what they are missing out on? Look for cues like, is there a chance to compete with the service the product is providing? You should be able to draw a clear comparison between their product and your solution. Your product/service should provide at least 3-4 added advantages against what your customers are currently relying on. Look for answers like is there an opportunity to resolve a problem in an easier way.
Step 5: Verify your budget
Checking that the product you would be launching will have buying customers is necessary to decipher. If the idea fails to generate funds, there is no point in going forward with the product. You will come to know where to invest your money and what idea will work out the best where people will be willing for the solution they are getting.
Step 6: Leverage prospects to define roadmap
Now that you know people will pay for the problem you will be solving, there is already a prospect base that you have built. Leverage this prospect base to discuss the kind of wireframe you can build, the design, what could be the features of the product, and more such things to develop a holistic solution which your future customers would completely rely on.
Now that you have validated your idea, how will you start implementing it? Here is how to go about it.
How to start?
#Build your prototype or test service
Once you have the idea there is no need to rush. Take a few weeks to gauge which idea really comes across as the best one and sticks to your mind. Now once you are clear about the idea, build a prototype of that idea to show it to people to get authentic feedback.
#Create MVP
Build a Minimum Viable Product (MVP) which is the basic form of your business idea that you can actually sell to a target audience. By using the Lean Six Sigma principles, the basic product can be tested and marketed in the initial stages of the development so that the resulting product aligns to the requirements of the target market.
#Run the idea through critics
Share your idea with or take a survey from your potential customers to check if they can really relate to the solution you are providing against the problem they are facing. This way you will get to know if serving your idea will solve their priority problem. Try and find people from your own group, peers or acquaintances that can form a strong opinion about the selected idea.
#Make the idea suitable by tweaking
Changing the product to suit the target audience is the best way to make the idea a success. Once you have run your idea through the target market, tweaking it in the initial stages could prove to be highly beneficial to increase the success ratio of your product.
#Capture the audience
To increase the engagement and gain traction from your target audience, try creating a simple website and social media handles that your customers can refer to their peer groups. This way it will be possible to gauge how many people are interested in your product and what reviews they have.
# Execute your marketing plan
If you have built a product, you need to market it to check who is interested, what strategies worked and what not, what you can do to improve your product. Doing so will help your business idea to get off the ground and in the process you will build a greater audience by connecting and engaging with more people than you had connected in the initial marketing stage.
#Experiment with your idea
Experimenting the thought process makes you commit mistakes. This helps you become more welcoming to failures and adopt changes easily. Before your idea comes to fruition, you will be able to have clarity as to what could be the future strategies and what will suit the target audience with their evolving demands.
Conclusion
Bringing a new idea is not a herculean task but it is absolutely essential to validate how valuable your idea is to the audience. You should evaluate the chances of the product being successful in the market and tweak it as per the requirements gathered after testing the idea. For any entrepreneur to ensure their business idea works with the target audience, competitive analysis is the first step to get the plan rolling. Without being clear if the idea is serving the needs of the customers, one can’t vouch for success. So, in case you too are an entrepreneur and have an idea in mind, you know how to strategize your next steps.
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