What is idea validation? Must-have for any startup!
What does it mean idea validation? And why is it a must-do for any startup?
Startup founders continually make the same mistake, instead of analyzing their ideas properly, they convince themselves they have a great idea. This belief in their project without the necessary research to ensure it has a market, is one of the many reasons that 9 out of 10 startups fail in their first year.
The absence of idea validation is one of the main reasons for startups failing. As a founder, you can build whatever you want but as a businessman, you need to be smart and create products that people want to buy. Validating your business idea helps you identify if your vision will succeed and that matters if you don’t want your startup to fail.
What is idea validation?
In short, idea validation is the necessary proof that your business idea is viable and helps you avoid unnecessary risks and expenditure. You had a great idea, identified your target market and the next step is to confirm your idea works in the real world.
If you don’t first gain clarity on who would buy your product and why, then you can end up burning cash on coding and developing a product with no sales or marketing channels. As important as it is to have a good idea it is also necessary to ensure the idea has real-world value.
You can begin talking about your idea with friends and family, asking them to give you honest feedback. Any criticism at this stage is very useful and it’s important you listen to and consider it. The more weaknesses you can find in your idea the better chance you have of fixing them and creating a successful product.
You want your product to be a success and to do this it is important that you don’t waste important resources before you have even built your product.
Why do you need to validate your idea?
Validating your idea is important for two reasons.
Firstly it is a cheap way to discover more about your market and potential customer base. It is a risk free approach that gives you a lot of information before you have invested money into your product.
The level of research needed varies from project to project, sometimes it is enough to do only interview based research, never underestimate the value of questionnaires.
Secondly validating your idea ensures that there is a real demand for your solution. It is important to research before you begin building and spending money on your product.
A common mistake many founders make is misinterpreting the significance of the problem, leading to increased expectations. The market loves ambition but not delusion, so make sure you stop wasting your resources so you can start producing products with a real world value.
A list of points that will help ensure success:
Before launching your product it is important to assess the market and your chances of success. This is something you want to continue doing throughout the process to ensure you are creating a product with real-world value:
- The right time. Sometimes the wrong timing can prove to be a costly mistake, even with a seemingly groundbreaking idea.Remember Google Glass – a product that was way before its time, then in contrast, take a look at AirBnB which was the right product at the perfect time.
- Early adopters. This is the term for the people who are first to use your software, it’s important to identify these customers as it is their feedback which, will go on to define the look of your product.
- Empathy. This refers to the way in which your solution fits your customers wants and needs. Find out what your audience wants by analysing their feedback. .
- Advantage. This is what makes you stand out from your competitors, it may be your business model, the way you provide your services or even how your product is designed.
- Complexity. Are you making the life of the customer easier or not? It is best to find out directly from your users and not just assume.
- Simplicity. If you cannot explain what your product in one sentence – stop. Unclear ideas do not help anyone, the idea has to be simple enough that everyone understands what you are doing.
Each product has its own specific requirements and these are general tips but if you follow them you will definitely be on your way to creating a successful business.
Idea validation checklist
What you need to do
We have created an easy to follow list to help you validate your idea:
- Define your customer, “Everyone” cannot be your customer. Avoid general words. It is also important to specify your customer requirements, i.e. location, role, age, sex and so on.
- Define the problem. 42% of all startups fail because there is no market need. If you want to become a true entrepreneur, make sure first that there is actually a need for your solution.
- Define current solutions. It often happens that the problem you want to solve does not need a new solution for many reasons. 19% of startups get outcompeted and die. The cause lies in the lack of valuable advantages to attract and keep customers.
- Confirm uniqueness. Make sure your solution is not only better but can also become relevant. If customers answer they ready to pay for your killer-feature it’s a good sign. But ask to specify the amount of money. No numbers – no confirmation.
- Validate the business model. A strong side of your project could be the new way of sale. Think about Uber. Nowadays its model looks obvious. But be sure, at the stage of idea validation customers said: “Yep, it gonna be interesting”. You need the same.
It’s important to produce a questionnaire and get feedback from at least ten people. If the results don’t look promising it might be time to consider a pivot. What matters more to you? Creating a product that fits with your vision or building a successful business.
How you need to do
8% of startups fail because they burn out before they come into fruition. Here are some steps that can help you stay disciplined.
- Be as critical as possible. Inspiration and enthusiasm are important. But if you don’t take a critical look at what is going on, you cannot avoid fatal mistakes. The truth is, that even for a good idea there are a lot of bad options.
- Be simple. When you have a lot of possibilities and hypothesis, they all make some sense but it’s important to save time and resources that you decide on a general workflow of validation.
- Be systematic. Having a system in place helps you keep to your goals and hypotheses. Constant discipline is required if you want to make sure your idea will make it in the real-world.
- Pay attention to others’ mistakes. It’s a cheap way to learn and improve. Ask other entrepreneurs what critical mistakes they faced during their early stages and learn from them.
It is important to remember that idea validation doesn’t mean you will not have any problems, but it does help you be more prepared to deal with them as they arise.It is a cost effective way to minimize any potential risks before starting the development process and will help you see if your idea has a potential market or if it would in fact be a good idea to pivot.
Posted byAugust 12, 2019
Max BabychCEO, Founder
I am serial entrepreneur and IT professional. Launched 4 own products and more than 20 products for customers in SaaS and Marketplace industry
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