I’ve always been an entrepreneur, even when I worked in a 9-to-5. I was constantly thinking on new business ideas, and how to sell them.
Most of them sucked though! They sounded very good in my mind, but as soon as I shared them people would tell me that they wouldn’t use certain solution, much less pay for it.
How come there were so many new businesses all the time? Did they just thought of a solution and went all out for it?
Of course not.
I later learned that there is a step between idea and execution. A crucial step that can save you time and -so much- money: validation.
Finding a business idea that you feel is worth pursuing is only the first step to actually create a profitable business. But first, you need to validate your business idea.
Idea validation is the process of researching and testing your idea to see if it has a place in the market.
Why is so important to do this? Because it can -potentially- save you from a path of suffering and money wasting. A lot of people create a business based on the impressions they have of a problem or a market, only to invest a lot of money and time on something that people just doesn’t want.
Validating early on also comes with the advantage to getting feedback from those that will use and pay for your service or product once it’s released to the general public.
Yes, I know that you are craving to go out there and pour all your passion into creating a great website, developing a product, generating audience, and all sorts of fun that comes with starting a new business. But don’t make the rookie mistake of working on something that no one is really interested in. Don’t rush through the research phase! (I so wish that someone told me that when I was starting my first business…)
How to validate ideas
1. Talk to people
Asking people if they think your idea is good is the very first thing you should do. Don’t worry about keeping your idea secret (scarcity mindset is a very nasty enemy of entrepreneurs), no one is going to steal it.
So I should ask my friends and family what they think, right?
Family and friends are the natural place to start, but if you really want to get some unbiased opinions you need to talk to those who will become your customers once your business is up and running.
Who are you solving problems for? Create a persona of your ideal client, find out where you can find them, and ask what they think about your idea:
- Is it good?
- Would it solve x thing for them?
- Would they buy your product or service?
2. Look at the market
Research your market and competitors. Is anyone selling what you have to offer, and making money out of it? If you can indeed find similar businesses to the one you have in mind, that’s a good sign!
Wait, what? But if I’m the only one it means less competition, right??
Well, no. If nobody is selling what you want to sell, it means that nobody is willing to pay for it. An idea doesn’t need to be 100% original and innovative to be good: it just has to solve a problem for your potential customers.
Finding competitors will also give you a general idea about the market you are going to play in, and what the different players are doing to be successful.
3. Sell it before it exists
Willingness to pay is the real key to know if your business idea has any future. It may be that a lot of people will say that your idea is great, but when the time comes to exchange money for it they are nowhere to be found.
But how am I going to sell something that doesn’t exists??
The goal here is make people pay for something. It doesn’t have to be a final product, or a full-fledged service. From creating a simple landing page giving people the chance the buy your product or service pre-launch with a discount, offer a course to beta-testers, to creating a Crowdfunding campaign. Distill your idea down to its very core and find out why someone would be willing to pay you for it.
If you can get several people (depending on the product) to give you money, then you will know that your idea has a market.
One of the great upsides of idea validation is that you can request feedback from both the people that say is a good idea, and those who already paid you for it.
But getting feedback goes beyond asking “what do you think?”
To get good feedback, it’s useful to have a set of specific questions in place:
- Does (product/service) solve your problem? Why?
- What did you expected of (product/service)?
- How does this (feature) compare to your current solutions?
- What is your experience with similar products/services?
- Do you think (solution) would bring more problems for you?
- What need to be before you use (product/service)?
- What do you like best about (product/service)? Why?
- What you dislike the most?
- Do you think this could be beneficial for others? Why? For whom?
- Would you recommend this to someone? (Ask for that person’s contact)
Be sure to add or change questions as you see fit depending on the situation and your solution, and be systematic in the way you collect the answers: make it easy to compare them later.
What comes after Idea Validation?
The purpose of validating a business idea is to confirm whether your solution is good to create a business out of it, or you need to find a different one.
A lot of new entrepreneurs “marry” to their original idea, and jump directly into production without doing a previous research process. They don’t realise how much of a gamble they are getting into!
If your idea is good -meaning people liked it and paid for it- then you are ready to start thinking about a business plan.
If it’s not, then back to the drawing board. Choose another idea from the ones that you generated before, and validate it.
What ideas have your tried? How did people responded to them? Share them in the comments!
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