5 Ways to Validate a Startup Idea
Entrepreneurship may be a risky affair, but what people usually don’t consider is that as an entrepreneur, it’s important to take calculate risks. This means there’s a greater focus on reducing the risks involved by trying to predict what might happen through logic, foresight and lots and lots of market research.
This article shows you 5 simple and effective ways to validate your startup idea and help give you an understanding of what you’re really in for and if it’s worth the money, strain and effort…or in other words: startup idea validation.
Startup Idea Validation #1– Do A Generic Sample
A lot of first time entrepreneurs look to friends and family first when it comes to validating a startup idea. This is not necessarily a proofed way of checking if your startup idea is good to go. Try and ensure that the people who validate your startup idea are people who are unafraid to tell you what the cons and problems associated with the idea are. Try and take your sample test to the next level – identify some old colleagues or classmates whom you think are doing well and are fit enough to gauge your idea without getting emotionally involved in it. Considering you’re looking for an honest answer, try and make sure you don’t reveal how emotionally attached you are to your idea. Other ways to do a sample of your startup idea is to find people who would take product surveys or samples. There are a lot of websites that cater to product surveys and paid product samples that are not only cheap and cost effective, but let you reach out to an unknown audience without giving away too much detail on what you’re planning to do.
Startup Idea Validation #2- Talk To Investors And VCs
This is a great way to test your startup ideas potential in the market. A lot of people however are sure to say that an investor or a VC could “steal” their idea, but this is not really true. Most investors and VCs have a reputation to keep in the Entrepreneur community. It’s their job to find the good Entrepreneurs. Almost everyone in the startup circle who knows what they’re doing, will echo the opinion that ideas come and go every day. Some even go so far as to ask VCs and investors to sign NDAs before revealing their idea. While this may not be a very polite way of getting someone’s feedback on what exactly you are doing- it does make sense if you are presenting someone your complete business plan. If it’s a raw idea, you risk damaging a relationship with a potential investor. Investors and VCs are good at judging what might work and what might not, but it’s important to have faith in your idea irrespective of what feedback you get. Some might strike your idea right off the board for certain reasons- but the key here is to find a way around the issue and come out unscathed.
Startup Idea Validation #3-Talk To Your Possible Customers
It is important to get feedback about your product or service from the people who matter the most- customers and users. Try and talk to your customers and ask them what they feel about your product or service and you will be surprised to see that they have so much value to add. Just grab a handful of your future customers, and take them all out to dinner or coffee (this may be cheaper).
In return for their time, you could give them special deals, throw in some goodies or give them a discount. Understanding your customers’ pain points and integrating them into the set of problems your idea wants to solve can indeed be a game changer in the long term. However what is important here is that you should be in a position to identify who your ideal user or customer really is.
Startup Idea Validation #4 –Do The Math
One of the most important aspects of validating your startup idea is the financial side of it. Do some math and spend some time figuring out how much this startup idea is going to cost you, at least over the first year.
A great tool made just for start-up financial projections is EZ Numbers. It’s important to have all the appropriate tax calculations, ROI, etc…this tool does it all for you.
The Jack Sparrow Technique Won’t Work
Although challenging, it is not impossible to detect and anticipate majority of the challenges that are in store for you before you startup. But it is of extreme importance that you try and iterate your idea as much as possible before you make the move on execution. Simply put, a good captain will chart his /her route map out and know all that needs to be known about it before setting foot on the ship and sailing. But what one needs to come to terms with is the fact that sometimes, you’re going to have to change route after you’ve sailed- and it’s wise to remain prepared to do the same.
We always try to tell founders and entrepreneurs in the startup idea validation stage yes, it’s important to listen to others. But never loose that spark of innovation and passion in your startup idea validation. That’s the spark you add.