You have a great business idea. However, are you 100 percent sure it will work?
42% of startups fail because they offer products or services that the market doesn’t need.
Many entrepreneurs and experts have different sayings on the downfall of a startup. And one of the main reasons that startups fail is due to not validating the business idea. So, it’s important to test whether your business idea will work in the market. Otherwise, you might find yourself in 42 percent of the startup failure rate.
So, let’s start the journey to know about the idea validation in detail.
What is Idea Validation?
Idea validation is a process of testing whether a business idea is feasible and is needed in the market or not. It is a process of testing your business idea before launching your business or product in the target market.
Testing business ideas before launching the business or products will minimize the risk of developing unnecessary products and services. As a result, all your time, effort, money, and resources will be saved.
How to Validate a Business Idea?
Validating a business idea increases the success rate of your business. So, whenever you have a new business idea, be sure to test it. You should never jump in immediately until and unless you have validated your idea. So, how can you validate your business idea?
There are multiple ways to validate your business idea and some of them are explained below.
Define the Product Concept
First, you need to define your product concept. These are the basic assumptions on which your idea is based upon. You need to focus on the following questions:
- Who are your customers?
- What can you offer to your customers?
- What are the features of your product?
- Is your product unique?
- Can it solve the problems of customers?
Do your research and find answers to these questions to develop your product. Your journey will be much easier if you have defined your product concept.
Find the Pain Points of Customers
You need to find the problems of the customers you are targeting. Your focus should be to find the problems they have been facing. But, you need to remember that every customer may not have the same problem.
It is not possible to solve every customer problem. So, you need to target a certain market segment and focus on solving the problems of that segment. If you are unable to solve the problems of the customers, then you shouldn’t trouble yourself to launch your business.
So, how can you know the pain points of the customers? One way is to directly ask your customers what they need. And, another way is to research online. You can connect with a large number of users and ask them the problems they are facing.
Conduct Market Research
First, you need to define your target market since you are going to launch the product. You need to know about market needs, trends, and problems. After this, you need to focus on fulfilling the market needs and solving their problems with your product.
You also need to know if the same product that you have an idea about exists in the market or not. It is not impossible for other people having the same idea and developing the product before you. Even if the same product exists in the market, you need to be sure that your idea and product is unique.
Likewise, you need to research your competitors. You need to find out about their marketing strategies, their pricing strategies, and so on. Doing this will provide opportunities to know their weakness thus, helping you to develop strategies to overtake them.
Well, you can also take advantage of the Internet to validate your business idea. You can research the market, competitors, and customers with the use of the Internet. You can use different online tools to get data about the market and customers.
You can use online tools like Google Trends to know about the latest and popular trends in the market. You can also use Google Search and other online SEO tools like SEMRush, Ahrefs, Moz, and so on to know about the keywords and queries the people are searching for. With these tools, you will be able to know the preferences and problems of the market and people in real-time.
Millions of people search online to find solutions to their problems. So, with the help of online tools, you will be able to know about the market and customers that need your business idea to solve their problems. So, you need to research online and find the best tools that will help you validate your business idea.
You can also join Facebook groups, LinkedIn groups, etc. to get their feedback. You can connect with a large number of people with the help of social media platforms. You can directly ask them their problems and ask them what they want in a product.
But, never share your business idea on social media. One might develop the same product before you based on your idea. Even if you are looking for someone to share your idea and have him/her work with you, then be sure to research about him/her.
Share Ideas in Your Network
You can also share your ideas with your family and friends. However, you need to remember that they are close to you and they may sometimes reply “It’s great.” not to disappoint you. So, no matter how harsh and painful it may be, ask them to give honest feedback.
You can also rely on your colleagues or any entrepreneurs if you have a connection. You can mostly share your ideas with entrepreneurs. They are experienced and knowledgeable about the market. Getting feedback from such entrepreneurs will be a great help to validate your business idea.
It might not be a great idea for you if you think that your business idea is great. You need to share your ideas with your friends, family, colleagues, mentors, entrepreneurs, etc. to get their honest feedback. This will prevent you from facing failure.
Conducting interviews with potential customers is a smart move to validate your business ideas. You can interview them either face-to-face or through video conferencing. Your biggest challenge here would be to convince them to have an interview with you.
You then need to prepare a list of questions for the interview. These questions need to be about their problems, ways to solve their problems, what are they doing to solve their problems, and so on. Then you need to propose your idea to them and be sure if they are willing to use your product or not.
You need to list down as many questions as possible to get their honest feedback. You need to propose your ideas and get their initial thoughts on your ideas. Getting positive feedback means you are good to go. Otherwise, you will get new ideas to improve your products and services.
You need to thank them properly for giving their precious time and feedback to you. You now need to review the feedback and see if your ideas need some improvement or not.
After interviewing potential customers, you need to build MVP (Minimum Viable Product) to find if your product is the exact solution that they are searching for. You will be able to find if your product is built exactly as their given feedback.
You can find the reactions of customers in real-time which in turn will help you to build the final products and improve the products and services further. Building MVP and testing the MVP is an effective way to find whether to implement the idea or scrap the idea.
Implementing the idea right away without validating it is a huge risk. You might fail hardly ever giving you the time to recover again. So, building MVP and launching it in the market helps to identify if your product is needed or not. Even if it fails, you won’t be losing much.
You can identify the actual problems of the customers before developing the final products and services by launching the MVP in the market first. The feedback from the market will help in affecting your business positively.
Price Your Product
You need to price your product right to make your product successful. You know that your product is able to solve the customer’s problems but, will they buy it if the price is not affordable?
Most of the customers may not buy if the product is not affordable. The price needs to be fair to customers. Your main aim is to solve the customer’s problems and high price is also one of the problems of customers. So, you need to develop your product considering the price the customers can afford.
You need to research extensively about how to price your product, what are the best pricing models, and then implement the best pricing strategies. It depends on your effort, time spent, and resources used to price the product. You can even ask your customers about the possible price they are willing to pay for a product that will solve their problems.
Getting feedback from customers about the price will give you an idea about how much resources, time, and effort to use to develop a product at a low price.
Create a Landing Page
You need a website where customers will buy your products and services. Creating a landing page is a means for customers to get in touch with you.
The landing page must be easy to navigate, clean, and most importantly inform customers about the business. The landing page must inform customers about the business goals and how it helps customers to solve their problems.
The landing page is one of the ways to increase conversion rates. So, the landing page must provide that vibe to a user that convinces them to use the products and services.
If your landing page can’t attract customers, then it is not possible to validate your idea. Your main goal is to see the number of customers who are satisfied with your products and services. And, the smart way to find it is to see the conversion rate.
Market Your Product
You know your MVP is solving the customer’s problems and customers are accepting the product. Now, you need more people to know about your products and services. So, how is it possible?
Your only option is now to market your products to get more people to buy your products and services. You can market your product online on different social media platforms. Social media platforms offer you opportunities to connect with a large number of people.
Another way to market your product is through blogs. Writing about the products and services also helps people know about products and services. You need to use different online platforms and tools to market your product because having a strong digital presence is the best way to validate your ideas.
You are ready
When you know that your MVP is solving customer’s problems and it is accepted in the market, then you are all set to launch your final product in the market. You are ready to implement your business idea.
Until and unless the results are as expected, you need to keep experimenting and improving your products and services. It is never an easy task to start a business. Different factors must be considered before launching your business. So, you need to be sure to validate your business idea before launching your business.
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References: EntrepreneurshipInaBox, ProductPlan, Syndicode