How can you validate a new business idea?
I have a few new business ideas and want to get some feedback before moving forward with the projects. So far I have chatted with a few people whose opinion I respect. I have taken their feedback and critiqued my idea as I begin to develop it out. Is this enough? How much validation is necessary?
Probably not. You need to analize the demand for these new ideas with those problems or opportunities they are intended to address.
Talk to potential clients or internal organizations you expect to be served by these new ideas. See if there is a similar solution already in place. Adoption is key to any new idea taking hold so getting input from those you hope to benefit is important.
Hi Zander Davis,
Starting a new business can be a daunting task for any entrepreneur. The planning and execution needs to be perfect in order to reap in optimal benefits. As you have already talked to several folks regarding your business ideas and analyzed each aspect, you must have got an overview of your action plan. Still you need to take cognizance of the risk involved in the business idea not going as per the plan. You need to properly incorporate the risk assessment and draft a full-fledged plan of at least the first year of your business idea. This is a good time to invest in a business idea, as the market is highly favorable for startups. Hope your business idea is successful. If there are any further queries, you can always contact me.
Hi Zander, in case it helps you there's a PPT on 'Market Validation' as a process on my LinkedIn profile. As to,'how much validation is necessary', I'd suggest sufficient to create a Go-To-Market Strategy, best.. Jeff Drust
I relatively recently came across a method for validation that is simple, but one which I have seen very few people actually do. Identify at least 50 potential customers or clients that you do not know and survey them. Include any relevant considerations as part of the survey (i.e. price). Listen to what they say. They may suggest that you slightly tweak your original idea to make it viable. These are not friends or associates or anyone else who is liable to sugarcoat their opinions for fear of hurting your feelings. At the end of this exercise, you should have a good feel if there is a market for what you plan to offer. If you cannot find 50 potential customers willing to provide their feedback when it costs them nothing, it is doubtful that you would be able to find customers or clients later to shell out money to actually make a purchase.
Have learnt about this recently, I can see you have received excellent answers. let me tell you what i've come to know about this:
• You need to establish a feasibility study which should include:
- Concept Idea, service Concept, product concept if any: this clarifies what you are offering in terms of services, products, and what the customer is receiving: value, product, service.
• Customer\Product demand and desirability ( you can check google for ready resources\templates that will help you evaluate your new business idea like: SCORE, MINTEL, etc....
it's said that you might have an excellent Idea, but with no solid business grounds, so it takes you nowhere!
maintain an idea bank for all the notions crossing your mind now, this will help you staying on the edge of the market!
study the market very well, know your customers, products, supply chain, business model, take the time to study this very well not to fall short on any of these.
there are a lot of websites and search engines that will help you study the market, start with key word: electronics market share!
your initial study of the idea needs to be carried over through primary, secondary research, including surveys, focus groups, library research!
wish you goodluck!
you can PM me anytime, I would be grateful if i can brainstorm with you some great ideas!
Good question, Zander. Validation is nothing more than an attempt at mitigating risk. All new business ideas will carry forth a certain amount of risk, and the combination of that risk with the intestinal fortitude of the entrepreneur will ultimately determine how much validation you will need to proceed. Keeping in mind there is no such thing as a sure thing, here are some tactics for emboldening your idea as a sound venture:
* FOCUS GROUP: Build a mock-up and put it in front of a group that would represent your target market. Use this focus group to not only discover the job your product or service will do for this group, but also capture things you may not have thought about.
* FREE SAMPLES: if you can't sit your potential customers down, give them a taste of your product or service individually, then entice them with some goodies to provide feedback.
At the end of the day, your network of professionals with whom you respect can give you solid advice on a product or service ONLY if they may see that product or service doing a job for them. The more you pull in the opinion and advice of those only vested in the job your product is attempting to do for them, the more validation you will get for your idea...and the more confident you will become in taking that leap of faith.
Good luck, Zander!
I HAVEN ´T DESIGNED FOR FIVE YEARS AND I WOULD LOVE TO DO IT AGAIN , SOMETHING NEW ,NICE , TRENDY AND I DO NEED A WEBSITE WHICH I CONSIDER VERY MUCH IMPORTANT ; MY DESIGNS ARE UNIQUE EACH ONE ,VISUALLY RICH BECAUSE OF THE MANUAL PROCESSES. I AM THE CREATIVE FASHION DESIGNER , THE ARTIST BUT I DO NEED TO FORM A GOOD TEAM .
Intriguing - given a bit more info I can determine whether my market research feedback service: Q3MA, is relevant and would pertain. It's purpose is to assess market potential of new consumer products based on fresh feedback and direct appraisals by consumers, i.e., by those whose opinions, ultimately, really matter and truly count. For more about me and it, see my LI Profile and here's my website page explaining Q3MA: http://your-research-resource.com/q3ma-quick-market-test/
You may have 1000 opinions, yet this never guarantees success. It is only for you to decide, real validation comes only when you are out there in the market. MVP your idea and go for clients, without spending too much time on more validations.
Lots of good answers here, mine is a little shorter - find a local SCORE office and make an appointment. I can't say enough good about the people who volunteer to be mentors, they'll give you great feedback and resources.
I recommend doing what I call an initial Feasibility Assessment.
Does your target market possess these 3 MUSTS.
1. Irrationally Passionate
2. Great in Number
3. Easily Reached
Drill down on the real benefit of the product or service you plan to provide. Does it help the end user fulfill one or more of these 6 basic human needs. The more the better.
1. Certainty - does it increase the end-users feeling of safety and security for themselves and for their loved ones in terms of physical safety, emotional stability or financial stability. Does it help them overcome the fear of making bad decisions?
2. Variety/Uncertainty - Does it help the end-user overcome boredom, get their adrenaline going, otherwise excite or entertain them in some way. Get the dopamine flowing.
3. Significance - Does your product or service help the end-user feel more important, achieve a higher social or professional status.
4. Connection - Does your product or service help the end-user feel a connection with you or others. As a whole humans are social animals.
5. Contribution - Does your product or service help the end-user feel a sense of making a difference for the better?
6. Growth - Does your product or service help the end-user grow personally or professionally? If a person or business does not continue to grow they indeed begin to atrophy.
If your product or service provides 3 or more of the human needs above it can actually prove addictive and guarantee a high level of customer/client satisfaction, retention and business growth thru word of mouth (face to-face and virtual) referrals.
Best of luck Zander and hope you have a fantastic 2016 and beyond.
Take a look at the book "The Lean Startup" by Eric Ries... It will spark ideas on validating products - among other things pertaining to starting uncertain businesses.
if there is no big investment involved, just bring the idea to the market.
Good luck, Piet
You, and a lot of these fine, business-centric suggestions are very practical and I would not suggest otherwise except... I really think there is a missing element here. Why are you going to do any of these business ideas? Are you looking to make the most money, work the least for a certain amount of money, etc.? Basically, where do these ideas fit in your life? The real missing element to examine is passion. How many passionate people who believed in their gut and worked their daily behaviors in support of their dream/passion do you think were told the metrics or other circumstances weren't ideal? What do you believe in? I'm not suggesting ignore the practical, I am suggesting that if you don't measure your passion you are really missing a key ingredient to success.
Hi Zander you are right to want to assess the viability of a business project but be aware that vexing over this can keep you from moving forward as well. As peculiar as it may sound I suggest you take the feedback and critique you've received then listen to your gut. If it feels right, pull the trigger. There's no amount of external validation that will provide more assurance than your own buy-in.
Validation is only necessary to the point that revenues and profits follow the validation.... I am a big believer in prototypes, test marketing from people and organizations that give you an honest assessment of your ideas.....
It's kind of like the music industry; there are many very talented people who would like to be on the stage in front of 100,000 people but never make it. Then there are those we scratch our heads and say, "How did this guy make it?"
There are many bad business ideas that are making tons of money while your sitting around looking for validation. It doesn't matter if you have experts or even Donald Trump endorsing your business idea; if you don't get to work on making it happen you will be validating it until you are 6 feet under.
Get to work on it and start making it happen. You will find the weeknesses as you go and will alter it accordingly. You can analyze it to death and at the end of your life, wonder if it would have succeeded or you can get to work on it and find out for yourself.
Do you have a Business Strategy/goal/Mission statement covering at least next 10 years, validate and balance resources to achieve targeted outcomes. In order to validate the idea, if necessary conduct a survey. Develop a MGPP for next five years at least. You have to test your idea thoroughly, ideas are any day ideas and illusions and converting them into reality is the big challenge. However, you are successful in crossing the first hurdle of conceiving the idea. Feedback, survey will give you qualitative assessment. What you need is quantitative assessment which is tangible and can be validated at any time. Depending upon you idea, lease create at least three plans in order words one plan and that is Resources Plan (Finances; Infrastructure; People and Technology). Develop cash flow plan aligned to resources plan. Once you have done this, you will be sure how long you will be red before you go green.
Richard Stern- To validate an idea suggest you do a SWOT analysis. Second decide do you want to be a local, national, or international company. Then expand your analysis.
Hello Zander. This is a great question and one which numerous people have asked me over the years that I have worked in business development.
Many people have great business ideas, but are not sure whether or not to go ahead with it and there is no easy or simple formula for determining whether or not it is a good one.
This is why my partner and I set up our a business mentoring and advice service for people that are asking the same question as you. We would be happy to arrange a complementary session to explore this further if you wish? You can contact us at http://www.pimpmyideas.com to find out more and to arrange this.
I look forward to hearing from you.