Step 1: Validate The Problem You’re Going To Solve As A Business
It might seem like the most obvious step of all, but you’d be amazed how many people skip it. When you come across a new business idea, the best way to start the validation process is to think of the problem you are trying to solve with this idea.
I constantly track entrepreneurs who are making it big within first few months of starting a business and I try to summarize everything that I learn in the form of these posts. I find it so amazing that even though these businesses are all in different industries, different geographies and applying techniques that are very different from each other, they all have one thing in common- they solve a problem that no one else solves for the same target audience. Here are some characteristics of those problems:
- We have all witnessed those problems many times in past
- We have not discussed those problems in a group or community ( we just wanted someone to solve them for us and then forget about it)
- Many of us overlooked those problems thinking that they need very specialized skills to solve
The most interesting part is that they are so common- they were always in front of us and no one was solving them before. And the solutions to these problems are relatively simple for people who are willing to learn.
I’d briefly mention a few solutions that I came across recently before getting into the details of today’s topic. I learnt about this guy building custom driveway gates for clients all across the US making $2,500 to $10,000 per day, the Window Cleaning Guy with a revenue of $170,000 on year 1 and a target of $400,000 on year 2, and a guy making $460k/mo selling shoes.
If you look at each of these business that I just mentioned, they are all solving a specific problem that most of us face in our day to day life. And yet, they are overlooked as they are not some of the mainstream problems that most entrepreneurs yearn to solve.
I’ve created a small business success framework after studying hundreds of such small businesses, most of them built on less than $10,000 as capital and earning anywhere between $1k to $100k a month.
In this post I’ll share the first step of that framework- how to validate your problem. It’s important to validate the problem that you are willing to solve as an entrepreneur because many a times just by finding the right problem and validating it, you complete more than half the job of building your business.
Unfortunately there is no perfect way to validate problems and the method often depends on the problem itself. Here are some challenges we often face in validating our problems:
- Some problems are private and people don’t want to talk about it.
- Some are faced by people who are difficult to approach (like top executives of companies).
- And then there are problems that are faced by people who don’t even realize that they have a problem.
And since we face so many such challenges, we often take the easiest (and most inefficient) route to validate those problems. We ask our friends and people around us about the problem (or in some of the internet communities we are part of) or worse, we take those problems for granted because of a Confirmation Bias. The first and foremost rule for validating any problem is to approach the right target audience who we think are most affected by the problem and who might be willing to pay to get rid of it. Here are 4 ways we can do that.
Confirmation bias- the often unconscious act of referencing only those perspectives that fuel our pre-existing views, while at the same time ignoring or dismissing opinions — no matter how valid — that threaten our world view.
Approach 1: Keyword research
Keyword research is useful only when your target audience is very active in the internet and they are trying to find a solution to their problems over the internet. Google trends gives us a very good idea of trends in searches, and we can get a good idea about keywords that are growing in volume. We can also use keyword research tools like Keywords Everywhere and Ubersuggest.io to find out demand for particular keywords that we think our target audience will be using while trying to solve a particular problem.
Approach 2: User interviews
Ideally, you’ll want to have both an interviewer and observer present during the interview. While the interviewer communicates with the user, the observer would take notes. It’s helpful to just act as a facilitator during the interview and let the interviewee to do the talking.
If you can’t arrange for a face to face interview, you can conduct it over phone or video chat. A good idea would be to record the interview and go over it multiple times to understand the pain points of the users and refine each subsequent interview with the inputs from previous interview.
Approach 3: Surveys
These is the most tricky form of research because you need to get all the questions right while keeping the survey compact enough so that users don’t lose interest. Here’s an excellent guide on conducting surveys.
Approach 4: Ethnographic research
It gives a lot of insight into context, which can be hard to get from other, more formal testing techniques. This is particularly useful in case of ideas that are meant for a very specific audience- like shoes for regular gym goers or sprinters. It’s often helpful to actually meet those people in a place where they will be using that product and asking them what problems they face with the current products that they are using. Learning more about this context helps us to understand how it affects the user experience, which we might not get to know from controlled interviews and surveys. It’s also easy to meet a lot of people facing the problem, all at one place, by actually visiting these places.