Founding a startup company does not automatically lead you to business success even if you think your idea is original and unique. Many allegedly innovative startups founded by great professionals sank in abyss, without leaving a footprint on the history’s map. Oppositely, multiple completely inexperienced startups saw their products becoming successful, popular among the public, and profitable for their owners. And that happens because the successful startups tested and validated their business ideas prior to releasing their products. It allowed them to fix mistakes and understand what their target audience finds important.
In this article, we will briefly tell you how to validate a startup business idea and why it is important for gaining success.
Shape Out and Describe the Concept of Your Future Product or Service
Concept of a Product or Service is not a business plan that is basically a waste of time for startups as it starts changing immediately after you get in touch with your first potential client.
Concept of the Product or Service is determined by answers to several key questions to be validated in practice right away. It is, in its core, a set of your ideas about your product features and their importance. The earlier you test these ideas, the lower risk you are exposed to at the release stage.
And in the course of describing this concept, you will be thinking of really important matters and things you haven’t paid attention to previously.
The mentioned questions are:
- Who are your clients?
The answer cannot be “everyone” as it means “nobody”. Be very precise and point out exactly who your future clients are, be it drugstores or car sellers. Identify characteristics of your ideal client.
- What are the problems your product or service solves?
Do not think about your product or service from the standpoint of its advantages, novelties or alike as it can complicate or even prevent your business growth. Define the exact problems solved by your product or service. And then make sure your target audience has the same understanding of the problems and needs them to be solved.
- How exactly does your product or service solve the identified problems?
Think and define how the solution of the problem can reflect on the people’s life or business operation quality. How can your product or service make the clients’ life better? How can it help them make profits or optimize certain processes?
- What are the key properties of your product or service?
Describe key features of the product/service and make sure it can provide the clients with certain benefits. But do not try to implement too many useful features in your product or service. Focus on creating an MVP (minimum viable product) with a limited functionality set first. It can reason the key benefits for the clients and help avoid high costs for you.
Structure Your Unique Value Proposition (UVP)
Focus more on your product or service value for customers/users rather than on its features and peculiarities. Indicate which benefits and advantages can your clients get from using your product or service. It can be anything: time saving, profits rise, process optimization, or even some social benefits.
In any case, these value propositions are directly linked to the problems you have identified before. For this purpose, make sure you structure your UVP properly and try to communicate it to your clients in the most simplest manner, in order to get fair feedback.
Test Viability of Your Considerations and Assumptions Out
After identifying some baseline things, go to your potential clients or to the people and ask them how they do find it. This will help you understand how relevant your assumptions are for your target audience. You can also poll some experts, which can be analysts from your domain, your employees, advisers etc.
If you cannot reach out to your audience for a personal talk, use technologies – Internet forums, communities, or simply landing pages or web ads – to check whether you move the right way.
Ask ‘Why’ Questions
Do not be afraid to ask your clients “why”: why they find your idea good/bad, why they like/dislike the product or service, why they want to use it for certain purposes. These questions will help you understand the true needs of your clients.
Find Investors Ready to Pay
Even if the audience likes your idea, it doesn’t matter somebody’s ready to pay for it. Your task is to convert good words about your idea into agreement to pay for its implementation. Your idea is validated if during the pitch somebody comes to you, opens the cheque book and gives you the money with the words “I want to pay and be the first to get your product/service”. You can also start with your relatives as initial investors – if you can honestly cause them to invest in your idea, then real investors will pop up as well.In 2013, family investors contributed 3x more than Angel Investors or Venture Capitalists, according to fundable.com.
Act, Act, and Once Again Act
No matter which business domain you operate in, your time and resources are most likely limited. That is why we don’t tell you to focus on details, as they may have no importance at this stage.
Validation of the idea helps startups obtain information they need to take decisions and start acting. And this approach does really work.
You shouldn’t spend too much time on the idea validation, though. You need to identify the biggest problems and get the overall understanding of the market needs. Otherwise, if you will run after 100%, you will start procrastinating, when you will be delaying your idea implementation with an excuse that you ‘need to be a bit more confident in its viability“.
If you don’t have enough experience in business idea/concept validation, it will be the best choice to find a partner that would do it for you. No matter what type of the software idea you nurture, our company is ready to help you with that. We specialize in helping startups succeed and blossom, and for this purpose we do even more: we provide free idea assessment and validation for startups who contract us to help develop their solutions!
Feel free to grab this opportunity and get your business idea validated for free!