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!
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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.