How to validate your product idea without spending any money
As a person who is always mentally scouting for my next big project, I immediately write down any product idea that comes to me. The sheer excitement of this new project makes me want to start working on the product right away, sometimes not giving a second’s thought whether people will actually buy it or not.
This is something a lot of entrepreneurs from engineering background tend to do as our root lies in making things, and for us validation somehow doesn’t feel necessary. But after a few attempts of developing failed products, I have realized this:
Validating the demand for your product is more important than ANYTHING. More important than features, design or pricing.
Without market validation you will have wasted a lot of time, energy and money but all you will end up with is a product no one will buy. Burnout, depression and hurt follows.
The following is the step by step method of validation a startup idea before you start writing a single line of code.
1. Don’t assume
Your market should be your only source of information for the decision you make, not your gut feelings.
People obviously want a CRM with simpler interface than Salesforce!
See what I mean? You might convince yourself of how awesome your idea is, but it doesn’t necessarily mean a market exists for your idea. Don’t assume anything. Let only the data people who are likely to buy it guide you.
2. Write the problem you are trying to solve (not solution) in one sentence
Start by stating the problem you want to solve as a single sentence. This sentence should sound obvious to your customers. Few examples:
No easy way exists to book a room with a local or become a host. (AirBnB)
Starting an ecommerce business requires huge capital and lot of technical knowledge. (Shopify)
If the problem statement is too vague, focus on solving one key pain point of your customer. For example:
It’s hard to keep track of a project, share files, communicate and stay organized.
This statement sounds familiar, but it doesn’t focus on ONE burning pain point. It can be repurposed as:
It’s hard to keep everyone in your team on the same page
Refine the statement until it can be expressed as single statement that resounds highly with your customers.
3. Find out where your customers hangout
Almost always, there exists a corner in the internet where people from your niche are concentrated. It might be a subreditt, a forum, a Facebook group, or even the comment section of some blog. Hunt down where these people hangout.
This is the place where they share their knowledge and help each other out. So naturally this is a prime location to research about their pains and how they overcome it.
4. Determine the problem you are trying to solve is not “nice-to-have-fixed”
Does your problem keep your customers awake at night? Does it bother them very very much?
Unless your problem is a burning issue, they won’t pay. They might use it for free, but they won’t pay. Everyone wants to have their inconvenience fixed, but it doesn’t necessarily motivate them to spend money for getting it fixed.
You have to test the waters to find out if the problem is a big pain or just an inconvenience. To do this, you simply need to ask them.
The goal here is to get insight by asking the following in a place where they hangout:
· Do they face this problem, and if yes how much does it bother them?
· How do they tackle this problem currently?
For example, freelancers have a hard time getting their invoices paid. You could craft your question as:
Do you guys have a hard time getting paid on time? For me it has become a major issue, and I was wondering if it was a common problem. What should I do to get paid on time?
If the question sparks a big discussion, you know the pain exists. The answers will give you a general idea of how big of an issue your problem really is in the community and how they deal with it currently. Make sure you don’t ask for which specific product they use. They may not be using any existing product but using some process or hack or a collection tools.
Baseline is, we want to find how this problem is being addressed, and whether a solution to this problem is essential to the customer or not.
5. Dissect the existing solutions, and figure out the pain points in them
The next step is to identify the pain in the current solutions.
List out the products that your customer are using. If it offers free trial, sign up and start examining how exactly the product works. Try to find pain factor (cost/time/inconvenience) in them, and compare how your solution would tackle every one of these pains.
Remember we want to solve a problem that some other company might already be trying to solve. If no one is trying to solve it, the problem might not be common or painful enough.
Chances are, your customers are already using some process or hack or combination of tools to solve this problem. Find out what the pain factors are on using this processes.
To have a competitive advantage, your solution must be significantly “better” than any of these existing solution.
Not just different, not have good design or few extra features- it should be distinctly better. It should save people time and/or money.
Note that the end product should NOT make people spend much time on getting it to work.
If your solution constantly demands user’s time for getting the system to work, the users will eventually look for alternative solution that automates it for them.
6. Is your solution to the problem worth getting paid?
The first indicator that paying customers exist in your market can be the existing products. If there are a few companies already out there trying to solve the problem, there is a good chance they have paying customers too.
If possible, find out how good are the sales of these products. Read customer testimonials, search for the product in social media, and understand general sentiment of their customer. Look for the signs of growth of these companies. If they seem to be doing well, chances are many people are willing to pay to have your problem solved.
It might not be the most convincing way to figure out if people will actually pay, but it certainly gives you a general idea if the solution to your problem can be monetized.
So that’s it! These simple steps will help you to find out if your idea has a potential to be developed into a product that people will buy, before you actually start pouring your cash, heart and soul into it.
Originally published at parasdahal.com