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.
Idea validation checklist
What you need to do
- 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”.
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.
Maksym Babych is serial entrepreneur and IT professional. He is the owner of SpdLoad. His focus optimizes business process and product development. Expert in Marketing, Lean Methodology, Customer Development approach. @maksymbabych