How to Validate a New Idea
Entrepreneurs never seem to be short of a new idea.
Some will be filtered out immediately (that burger vending machine idea probably won’t make the cut), but every now and then one will stick.
An idea that makes so much sense, you’re shocked it hasn’t been done before.
If you’re an ideas person, you’ll know the feeling of wanting to get out there and make your idea happen as soon as possible.
But before you quit your day job, take a moment to step back and ask yourself:
How can I really be sure that this idea is worth pursuing?
This is something we encounter a lot from our community.
When you put so many like-minded people in a room together, the ideas are always going to fly around.
So, naturally, we need a process to sort the good from the not-so-good.
We put together some steps to follow on how to test a new business idea before launching in:
1. Get as much feedback as possible
Ask everyone you know; friends, family, colleagues, your dog walker… the more feedback you get the better.
Often there’s a lot of inertia to this — it’s really difficult to start talking about an idea of yours.
Which is fair enough — your ideas are your babies, and talking about them openly can subject them to negativity, potential copycats and even ridicule and embarrassment.
But, these outcomes are pretty unlikely.
After all, ideas are a dime a dozen — execution is the real deal-breaker.
And how do you best execute? By getting as much feedback as possible, reiterating and learning constantly.
So, welcome all opinions. They’re all valid, and they’ll help to steer you in the right direction for your concept.
Do try to keep it balanced, and get feedback from people that are a bit more removed.
If you just ask close friends and family they’ll likely say it’s great without really knowing. Ask some more random people you cross paths with, throw the idea at them and see their response.
Don’t discount the thoughts of those who have no background in your industry or in business either, because they might just point out a key opportunity or obstacle that you hadn’t considered yet.
Best of all, feedback is free.
There’s no need to undertake costly market research at this stage; most people are more than happy to share their opinions if you simply just ask.
2. Does your new idea solve a problem for consumers?
Who is the audience that will buy your product or service? What problem are you solving for them? Can they find an alternative solution elsewhere?
If you can answer these questions with the confidence that your product is meeting a genuine demand, you can safely assume you’re onto a valid idea.
It’s marketing and business 101 — your product or service is a solution to someone’s problem.
Your idea isn’t just a thing — it’s an enabler.
Think of what your idea enables someone to do, and what experience it’ll grant the user, and you’ll be on your way to understanding how much value it’ll drive.
As an example, if your idea saves people of a certain niche a lot of time, that is incredibly valuable. It’s enabling them to have more time at their disposal.
3. Is the business sustainable?
With the rise of the digital economy, it’s become easy for people to access and share information without paying for it.
This has had a big impact on industries such as music and film ― especially for those not prepared for change.
But for other artists and companies, it’s been an opportunity to rethink the monetisation strategies for their product, and catch up with the rapid development of the digital age.
For other businesses, the product or service they provide may appeal to a limited and niche market.
So what happens once you solve the ‘consumer problem’?
When thinking about the sustainability of your business, don’t fall into the trap of focusing on the initial offering. Instead, concentrate on how it will benefit you in the long term.
Think about market size, advertising potential, the cost of intellectual property protection and any other side benefits your idea might generate which could prove valuable to others (the capture of big data is an just one example of this).
Of course, you should be aware that your idea and business will almost certainly adapt over time. This aside, you need to make sure the fundamentals of it are sustainable and can survive.
4. Is your idea different? (No seriously, is it?)
If you’ve got a brilliant idea, it’s likely that someone, at some point in time, has had the same idea too.
But you’d be surprised at the number of aspiring entrepreneurs who are so convinced their concept is unique that they fail to research the market for competitors.
Sometimes this is due to fear; of finding out that their brilliant idea has been done before. Other times, it’s because they got a little lost in their bubble and lost sight of the bigger picture.
In any case, it’s important to remember that competition is not a bad thing; in fact, it proves that your concept is viable and that the market has a demand for it.
Having competitors also helps you identify current gaps in the market.
Many startups have succeeded despite developing an idea or product that a larger, more powerful business was working on.
It’s about focusing on the Unique Value Proposition that your startup can offer ― and doing things better than your competitor.
5. Is it too good to be true?
Okay, so you’re 100% positive that people will love your idea and that nobody else has done it yet (or if they have, you’re confident you can make it better). Brilliant.
But stop for a moment. Why is that?
If it’s such a good idea, why has nobody done it before?
Does it seem odd that larger businesses, supported by greater resources and capacity, haven’t taken advantage of it before?
Thinking about the reasons why other people haven’t acted on this idea in the past will give you a more objective and realistic perspective of some of the obstacles which lay ahead.
Don’t be afraid of finding out something negative; rather, think of it as an opportunity to adjust your concept so that it can avoid the same problems.
6. Worst Case Scenario
If you pursued this idea, what’s the absolute worst thing that could happen?
If it completely failed, what would happen?
You end up with a whole heap of inventory, you have to go back to a 9–5 job, your friends will bring it up every now and then. Not that bad, right?
Based on the grandeur of your idea, answering these questions will give you an insight into the risk you’re taking on.
Are you comfortable with this risk and that outcome?
Another question similarly related is another important one to ask yourself in this process — ‘What’s the least I need to be happy?’
For some, it’s family. For others, it’s a warm bed to sleep in. For others, it’s lots of money.
Whatever it is that makes you happy, that’s what you should try to maintain if this business idea was to fail.
7. Don’t Be Afraid To Pivot Or Stop
Getting your idea off the ground is always going to be difficult.
But no matter how attached you are to it, pushing an idea that people don’t support is only going to make your life difficult.
That doesn’t mean your concept isn’t a good one. But it could mean that it’s not the right time for it.
To give yourself the best opportunity for success, don’t make your work unnecessarily hard.
If you’re struggling to get people on board with your idea, know when to cut it loose and switch to a new strategy.
After all, it could be just a few simple tweaks that take your idea from… well, an idea, to something big.