Don’t let yourself fail: how to validate your startup idea without spending a dollar!
How often it happens when seemingly brilliant business ideas go down the chute? Pretty often, — you would say… But why? What is the reason for this? Does that mean you should never try to start your own business?
The last question is pretty stupid… Of course, starting own business, making an effort in entrepreneurship is worth a try for everyone — as it gives independence and the opportunity to earn more…. But you also should always keep in mind: a commercial startup which brings no revenue is sentenced! It is advisable you know about the real chances of your startup concept long in advance of your startup launch, of your single dollar’s, single hour’s investment in it. In this article you will learn the fast and effective method to validate a business idea. So don’t rely on your dreams only — test them first, and only afterwards start working on them devotedly, and, finally, launch your startup!
The demand decides everything
First of all, let us reveal the true reason for startups’ failure. It’s actually quite simple: no demand. So validating your business idea is, in fact, answering the question: is there the demand on your product or service? Will people need the product or service you provide so much that they’ll be ready to spend their money on it? Answering this question is of higher importance than anything else — the features, the design, the project team you hired, the price you will set — everything. Having not answered this question, you are risking to invest plenty of your time and money in the product nobody will invest a single dollar to purchase… So don’t turn the dream of your life into unnecessary hurtful loss! Read the step-by-step instruction on how to validate your product below, put it into practice, — and be proud of your success!
Step 1. Define the problem your product is focused on
How the demand is formed, out of what is it born? — The demand is formed by problems people are experiencing. Articulate the problem your product is aimed to solve. Try to make it a 1-sentence statement, for example, “Incomprehensible money expenditures” or “Many of the newly hired workers want to quit having not worked for even a week” etc.
Step 2. Research on how important this problem is
Problems are everywhere at every step, but not each problem can cause people to invest their money in the problem’s solution. We only pay for the solutions of those problems, which are especially critical to us. In exactly the same way the possible buyers of your product would act: only the most important, most critical problems will be worthy of their money. Simply put, in order to be successful, your product or service must solve one of the 3 most critical problems of your possible consumers.
Here, you must conduct a research on whether the target problem of your product is from this list. If it’s not, no further actions are worthy to take towards your business idea: most likely it won’t bring any revenue in result of monetization and thus will fall. To conduct the research, firstly, you need to make a draft of the profile of your target customer: his age, profession, family status etc. Next, your task is to ask your target customers about the concern the problem evokes in your target customers.
Get in touch with the target customers
One of the most convenient ways to conduct such a survey is via LinkedIn or Facebook. Find out up to 20 people there, who correspond to your target customer profile. Contact three times as many people with the welcoming, but short and concise message, inviting to chat. You must contact that many people, as most of those who you contact will not reply, some — because of the lack of interest. It would be better if you will chat with the potential customers by phone — to guarantee the chat will happen.
Come up with the questions
In advance of the chat with your prospects, prepare at least 5–7 questions’ quiz. Among those questions must be these 4:
Make notes on the answers to an online document or wherever is convenient for you. Already after the first 3–5 conversations you will understand how important this issue is for the prospects: is it really a vexed problem or just a “not bad to somehow get rid of”. There will be no demand on a product unless it is the solution of a really big issue for the customers!
Step 3. Sniff out for the competitors
Why should I? To get envious? Scared?, — you could ask. Of course, no — rather, to approve that there’s the demand and the market formed around the solution of the problem. In this case it is great to find out that there is a big successful company specialized on the same problem as you. And it would be rather sad to discover that no companies work in the field. As this will mean that the problem is too specific, and very few are ready to pay for its solution.
The situation with the competitive advantages you product should have will become clear just after you ask your prospects about the existing solutions they use to solve the problem.
Step 4. Look for the downsides in existing solutions
If your target customers already use existing solutions to deal with the problem, elaborate on what difficulties they experience while using them. Ask your prospects on what they need to make their job easier, faster and more productive — the things they miss about in the existing solutions. So now you know what to focus on in order to deliver the best-satisfying product. In order to be successful, your product must be of 20% of distinctive advantages over your competitors!
Step 5. Make sure your product will bring the revenue
Well, in theory that can happen: when you’re focused on one of the 3 main issues of your target customers, but get no serious revenue. Of course, this can mean that you overestimated the importance of the problem… But anyway, it’s time to have a talk about the prices!
First of all, you need to verify once again that there is the market for your product: there are competitors, some of them are growing and make good profits. If their businesses have customers ready to pay for their products, so can yours! For more certainty, ask your prospects unobtrusively on whether they are ready to pay their money for your solution of their critical problem. Moreover the solution is 20% more advantageous than what the competitors offer!
Step 6. Consult with your prospects on your product improvement
Don’t lose contact with your prospects, as they can be helpful not only with your idea validation… In case the idea validation is successful, keep in touch with them further! As they could willingly help you to come up with the right solutions on the key features and marketing strategy for your product!
Many people often make their business decisions too fast. There are the people who, relying on the intuition and dreams only, decide to immediately launch their commercial startup, which, as a rule, fail in a short time. Following this article’s 6-step instruction, validate your business idea and guard your future against such a scenario! Yes, usually this leads to the dream’s end, but this validation will certainly save your time, money and nerves — as will insure you against no-win business initiatives! So take this step, which won’t cost you a single dollar to save yourself a fortune!
