Weekly newsletter of Lancero — How to validate your business idea
Everyone starts off with an idea. Check out Mark Zuckerberg, who started Facebook out of his dorm with little to no resources. He eventually had the power of the Havard network which makes this a bad example for current starting entrepreneurs. These days the markets are crowded with solutions to problems that’s why it’s a must to validate your idea! But why?
Example of a failed product
Danny Malony, the CEO of Tailwind told that he started his first product by asking his family and friends for feedback about it. They were all positive and excited, but in the end, no one used it. He spend a tremendous amount of time creating the product but eventually got zero users after all the good feedback from his relatives. We call this “wasting valuable time”. But how do you validate the right way?
After his failed project Danny created another version of his product, but this time he asked for feedback from “potential users”. These potential users were using a similar product to manage their problems. The thing he did right this time was to ask where the room for improvement was and what functionalities could be added to limit the pain. This enabled Danny to create a product his customers belonged for, by just asking the right people the right questions. This is how you can do it better!
First of all, you need to understand the market that you are focussing on with your product. What are the trends, how large is it and how would your product fit? Some markets are harder to step into than others, because of monopolization eg. Google. If stepping into a crowded market, it’s important to compare your values to your competitors. You need to analyze and make sure your product brings your customer more value so they are willing to pay for it.
To make sure that your product is an improvement compared to the ones your competitors offer, you should do “potential user interviews”. It’s important to get confirmation that your product is making life easier for your users. What’s next?
Creating a landing page
When you did an analysis of the current market and find how you would potentially fit, it’s time to create brand awareness. This can be done by creating a simple landing page with your value proposition on it. Adding an MVP waitlist to your landing page could upgrade your analytics x100. You will see who is willing to eventually pay for your product and see if it’s worthwhile your time building your MVP.
An MVBM(minimum viable business model) could be crucial in the validation stage. This way you can define your strategy on how you’re going to make money. By having this in the early stage you are a couple of steps in front of everyone else. Eventually, you’ll update the MVBM throughout the journey of your startup. The goal is to make a strong Business model that you can provide to eventual investors.