All thanks to HBO’s Silicon Valley, every entrepreneur’s family or friends believe that their start-up idea is the next billion-dollar idea. However, the truth is that as an entrepreneur with a start-up business idea, it will be foolhardy to assume and conclude that your idea will be generally accepted. For each start-up idea, there is a need to evaluate and validate a plan for it to have a more realistic outcome.
Thus idea validation is a significant step in the process of determining if there is a problem that needs a solution inspired and agreed by future users. Also, idea validation should aid in conceptualizing and also yield profitable returns in other aspects of the start-up processes. To this end, I will be taking you through five simple steps tips to help you know if you have a good business idea or not.
- Start With The Problem
It is often easy to assume that you have a good understanding of the problem and the best solution for the customer with your start-up idea. The right first step to take in validating your idea is to engage a group of potential users. Beyond discovery and understanding of customer needs, you have a sense of solving an actual problem and also have an idea of projected sales. Besides these, you might also identify other key segments in the market worth focusing on.
When interviewing potential customers to gain a better understanding of a problem that needs to be solved, a great tip is to ask open-ended questions. It will help in consistency and also maintain a pattern in their answers regarding the problem they wish can be solved. Another tip is to have a wide range of customers to interview. From a larger pool, you have a clear understanding of your idea and if it covers a problem worth solving.
With the data you gather during these interviews, you can nail the problem by quantifying any negative consequences on the buyer. Such as time or cost increase and productivity decrease.
- Search the market for similar solutions
Before carrying out complex solutions to problems found, it is essential to carry out simple activities such as market research. The probability of an already developed marketplace same as your idea is pretty high. Besides this, there could be companies with similar ideas in the past that have shut down and no longer offer such services.
So when you carry out proper market research, it enables you to analyze the performance of potential competitors. From the research analysis, you should be able to answer questions such as:
- Does your idea top theirs?
- Can the market accommodate another platform?
- Would customers and providers make the switch?
- What are the chances that the other platform will improve?
- Are the odds of finding an overlooked business niche that will be in your favour? Etc.
If the research showed companies with similar ideas in the past that have shut down and no longer offer such services; again, it is essential to analyze the situation using the following questions:
- Why did the business pack up?
- Was it because of the market condition, and are those conditions still prevalent?
- Was it because of bad business decisions made, how will mine differ?
- Was it because of the target audience; is the situation still the same? Etc.
The market research and analysis should in no way discourage you from executing a well thought out idea. Instead, it should only help you focus on ideas that are worth executing. For example, rather than coming up with another cab-hailing service similar to Uber, or another writing service review like Best Writers Online, it is best to work on a niche that has been overlooked.
- Create A Solution Demo
A lot of start-ups fail because they build an idea around a solution without following the same problem definition process. Having a clear view of potential solutions is still crucial because it serves as a benchmark for ideas customers will consider worthy of their time and money from the onset.
Once you have carried out an interview-backed, qualitatively validated solution, you can then design a compelling prototype. Note that this is not the MVP stage yet. The aim of creating a demo is to validate the fit between the identified problem and the proposed solution. Building a prototype may take a lot of time and resources to make, however, if early adopters are intrigued by the value of your demo, they will not mind committing early to help you build it faster.
- What Are Your Funding Strategies?
For most entrepreneurs, they might have a fantastic idea, but little or no capital to push the start-up idea. Taking your funding strategies into cognisance makes a tremendous difference in improving the chances of your idea, actually becoming a business. The fact that your plan can get funded means you have more options to establish your company.
Advanced funding strategies such as crowdfunding provide start-ups with a dependable way to determine the viability of a business idea. With a funded design and excellent response, your funding opportunities are likely to increase as more people become aware of your product or service.
- Build an MVP
Finally, the fifth step is your Minimum Viable Product (MVP). The idea behind MVP is to build a more satisfactory and full feature product for the early adopters of your demo copy. Take, for example, Dropbox; what we see today is a cloud-based file-sharing solution for both individuals and big companies. The current Dropbox platform comes with multiple features that give you access to your documents on multiple devices. However, a few years ago, Dropbox wasn’t as sophisticated as it is today. Still, they were aware of being onto something with the replies they were getting on their beta-testing invitation.
Besides getting consumer interest and allowing them to test your product, an MVP comes with other benefits. You can gather feedback from your audience and gain a better understanding of their perception of your solution. And then get a clearer picture of what needs to be fixed and what they like. In essence, the function of an MVP is to direct you towards building your final product. Because, up until the stage of building a final product, you are mainly guided by just your vision and assumptions.
The most successful entrepreneurs never go blindly into a business venture. And this is something you should also never do. With a proper business idea validation, you can push a well thought out product or service that meets a need and with increased chances of success.
Bio: Gregory is passionate about researching new technologies in both mobile, web and WordPress. Also, he works on Best Writers Online the best writing services reviews. Gregory in love with stories and facts, so Gregory always tries to get the best of both worlds.