How To Validate Your Startup Idea That Will Save You Time And Money
October 12, 2022
There are more startups in the U.S. than ever before, and as entrepreneurs look to build their dreams, we are going to see an increase of failed business ideas. I have talked to countless startups who have great ideas, lots of passion, and a team who are fully committed to putting their money and time towards reaching their goals.
However, I have also noticed a trend where startups jump right into marketing and production of a business idea before they validate their idea.
What is Business Idea Validation?
Business idea validation is the procedure for testing your concept before launching the actual product. Validating your business idea takes into consideration everything from your current market, the needs of your customers, and the position that your competition has in the market you wish to serve.
Know Your Buyers: What Is Customer Discovery?
Your customers have problems, and they are looking for solutions to their problems. This is what customers do.
You are a startup, and you believe that you can provide a superior product or service to your customers. This is why you are starting your own business.
Customer discovery is a process where you research your ideal client, understand why they are not using alternatives on the market (or why they stopped using alternatives to your solutions), and leverage your strengths to attract more customers.
Talk To 100 People to See If There Is Market Opportunity
Your startup does not exist if there is no problem that you can serve. Many startups end up failing because they did not accurately assess the need for their service in the marketplace. Whether the need was already addressed, or the barrier of entry too high, some startups only try to niche a market that does not need another solution.
If you want to improve the chances that your startup will succeed, then you need to interview at least 100 people and ask them about their problems as it relates to your startup idea.
At the end of each interview, you should ask your audience to name two people who they know who would be open to talking with you. This will not only give you additional contacts, but it also will tell you if there is a larger market out there for your products and services.
Build A Minimum Viable Product
Based on the results of your interviews your startup should begin investing in a Minimal Viable Product (MVP). This is an early iteration of your product, but you produce this early version in a way that does not spend a lot of unnecessary time or money.
As you build your MVP, you need to test this idea with the people you interview. Send your MVP to people you talked in the past because your test crowd is one of your most engaged customers you might ever have.