What's the best way to validate a business idea before getting started?
I've done some reading on the lean startup method and would like to get feedback on my business idea before getting started. A lot of what I have read pertains to tech startups and creating web landing pages. How should I go about getting feedback for a 'brick and mortar' business? I thought about a survey, but I'm concerned that what people say and do are very different.
You have already defined the only way to do this by talking about carrying out a survey. I am not sure who your target would be but if you would plan to be pro-active once you start your business then simply be pro-active to the same channels BEFORE you start it.
The issue of people saying one thing and doing another is true to a certain degree, but if you are looking for guarantees on success before you start you will not find any.
Select a small number of target individuals or businesses on an 'exclusive' basis to see if they are interested then simply increase the next campaign to a larger number until you are confident that the concept you have is workable, then just go for it.
Validating your business idea is crucial before you shell out thousands of dollars into building a product, setting up the business and hiring people. The best thing about the time period that we're living in is that technology has enabled entrepreneurs to able to validate their idea at a nominal cost. It has never been cheaper to start an internet business.
Here's how I would validate it:
1) Set up a landing page. Before you go out and shell out thousands of dollars on hiring a developer, just see if people would even be into the idea by creating a very clear and concise landing page. The landing page should describe what the product is, how it works (3 clear steps) and a sign up button where someone can submit their name to be added to the wait list. Take a look at http://quickmvp.com you can literally set up a landing page in five minutes that contains a clear call to action. You can even test interest levels based on different price points to see if customers would be willing to pay for your service. This is a great tool to help validate your idea and you get great analytics to see how engaged people are with your idea.
2) Find out who's interested and bring people towards your landing page to see if people would sign up. If you're getting a lot of signups your steps closer to validating your idea. With Quickvp you could spend $30 on Google ads. I also like this one tool called Http://flutter-app. I use this all the time to test out new features for LawTrades. You can follow accounts that contain your ideal customers very quickly with a few clicks. For instance, if I was opening up a new taco shop, I can use Flutter-app to follow people that follow Chipotle, or Taco bell since my ideal customers are probably following those accounts. Doing this manually would take forever, but you can do this with Flutter very quickly. Make sure your Twitter bio has a link to your landing page so people know what to click on. If a few days go by and your landing page is getting traffic but no signups then tweak the landing page.
3) Make sure you're going to Meetup Events and meeting new people face to face to talk to them about the idea! If you're shy, then you MUST come out of your comfort zone. Just find out where your target customers are hanging out and what Meetup Events are they apart of and go there to ask for feedback on your idea. If they like it then have them sign up. Build up the hype! If they sign up, these are going to be the people that your in communication with as your building out your platform, leave an awesome impression so they come back when your platform/service is ready.
4) After you have some signups, I would interview them and talk to them about the idea. See what they like about it and why they want to use it. Make sure you also ask them about their feedback about various price points that you have in mind. Interviewing is key because you'll get the feedback you need to build it out. Once you talk to potential users you can fine tune your elevator pitch and really be able to figure out the actual problems that your customers care about.
All of these things can help you gauge user interest for what you're doing and I've seen some pretty successful entrepreneurs implement these strategies. You should also visit http://Leanstartupmachine.com they host awesome weekend workshops to help you validate your business idea.
I'd love to hear about all the new ideas that are on this question. Feel free to message me!
I would go with these steps:
1. Identify the business segment you are entering
2. Identify people who know this particular segment
3. Discuss with them about your business idea
4. Sketch pros and cons from the discussions you have had and try to summarize what you learned in models such as business model canvas.
To discuss your idea with them, it must be clear who is going to be your client, how you are going to add value to them, how you are going to make money and why you are the right person to do that.
I hope this helps!
All the best,
Since you are entering the art market, your success will most likely be destined by the authors you are representing, so good choice of authors, possibility to represent them exclusively could well define your success or failure. I would suggest that you do that as a "side job" or a personal project along with current paying job as, as you know being a curator, values vary and what might be valuable in your eyes might be a flop on the market.
Try teaming and supporting new artists that are aspiring, the involvment will cost your time but not the so much money. And stick to the art fields you are an expert in, or team with other experts.
Have friends in art business, it is a tough business to break.
So I would actually suggest not to go into actual brick and mortar phase immediately (only if you were born with money, and you have something to play) but rather start online, then move to renting/sharing galleries for exhibitions, and move forward to actual brick and mortar location when you are already "established".
First up, best dressed ! But , good idea is not direct ticket to success. In theory gives you advantage but in practice it means that you need to invest more time and more money than second or third one. It is because you are that one who makes strategy, finding way to get costumers and in the end capitalizing you idea. Copy past is most effective (cheaper ) because needs less energy (money) So, if you have any similar "product" all you need to do is getting idea how to. Otherwise you can not find objective feedback , especially if your idea is totally different. One tip: find few potential investors, banks and try to get money from them. That guys have sixth sens for investing (not spendig ) their money.
I think this is the best way to launch a Web page and explore your business opportunity thru internet. This will give you some idea, before investing into real business.
Set up a website and see if you get any hits or inquiries.
Use social media e.g facebook,linkedin, myedge...and design qquestioner according to your work and hopes then analyze it...
I had a look at your profile and it seems you're opening an art gallery.
For me, the starting point would be "what sort of gallery?"
Are you looking to appeal to a broadly "art-loving" customer or will you be aiming at specific segments?
For example, are you seeking to promote new talent or more established artists?
Are you aiming at the more serious collector or people who just want "something nice for my dining room"?
I ask because you will need to understand that in order to have a solid staring point for your research.
Then I suggest you go and look at other galleries in and around your area.
That way you will be able to form an idea of what's popular (and selling) and what isn't.
I would also be very informative to find out how long they've been around. The longer established ones will have discovered their particular market and will understand how best to serve it. I doubt that the owners would tell you how they did it, but casually chatting to their customers might be useful. Or, if you don't want to be seen checking them out, get some trusted friends to do it for you.
I hope this helps, but do please ask if you think I can be of any further help.
I have an interest in startups as I'm co-authoring a practical workbook that aims to help people just like you.
Thanks for the intriguing question. I see that you have received some great advice from some rather noteworthy experts so I won't reinvent the wheel here. Instead, I would like to give you a different perspective. You ask what is the best way to "validate a business idea...". Rather that validating a business idea, have you thought about validating a product or product set? The business idea approach must start with products (or services) as they are the means of driving revenue. You could have a great business idea but if products are not revenue productive, your business idea is "flawed". Brick and mortar space is expensive and requires specialized approach to execution (remember location!, location!, location!?). Given the great advice you have already received from others I would list the activities for you as follows:
1. Establish product parameters - what, how much, logistics, cost, price, quality, quantity, etc.
2. Test consumer market - who wants it, how much do they want? When do they want it, etc.
3. Establish a business model (high level): Brick and mortar, on-line, partnership with established firm, purchase shelf space or sales position, etc?
4. Take your learning from 1 thru 3 above and build a detailed business plan.
5. Phase into your business plan...be careful about investing everything at once or under-funding the start up.
As far a getting feedback for a brick and mortar business...brick and mortar is placed to capture the passing and or interested customer. ...Your product is the first issue you need to analyze and then you have to find the right location that will facilitate customers' access to your products and services.
There is a tremendous amount of detail in the above steps so if you need further help, please do not hesitate to contact those of us who have responded to your question.
I specialize in helping retailers become the best they can be, from startups to those who have been operating for years and are suddenly struggling because they haven't been able to keep up with the changes of the industry.
One thing I will say to you first up is that there is no such thing as a 'lean startup' for a bricks and mortar store. If you don't have financial support in place, for at least 12 months worth of trading, then don't be surprised if you end up on the 70% who fail at retail pile. You may as well start up an ebay store instead and save yourself an incredible amount of effort and anguish.
Assuming you do have backup funds, there is a tried and proven methodology behind ensuring your business will be a success. A step by step process that will give you the best chance. The first step of this process is market research, in particular demographic research, which is about researching the region where your store will be located and comparing things like levels of disposable income, age groups and even race, to the types of offerings you want to provide. For example, different cultures have different tastes, some things appeal better to older people than the youth and targeting too high on price won't work if most of the people in your area don't have much money, (the reverse is true too).
I have turned many long established businesses around by reassessing their target market and adjusting their price pointing and offerings accordingly.
Surveys are indeed part of the process, but nothing more than validation that you have interpreted the demographic research correctly in the first place. Simply tell those you approach, that you are an independent researcher assessing the market, (not the business owner), and they will then give honest answers rather than what they think you want to hear.
In short, demographic research will get you on the right track, surveys etc. will help to validate. I can do the research for you of course but this isn't about drumming up business, rather about putting you in the right direction. There are plenty of experts who can do market research for you.
Yes, you need to love what you do but it doesn't hurt to find out if others will too, before you invest time and money. You will hear mention of the need to create a business plan but the first stages of one will include, "make sure you love what you do", "make sure you are good at what you want to do" and "make sure you have money behind you", then the next stage is market research anyway. My advice to you is to really get this part right, before you fill out an entire business plan or even go any further.
Define your target clientele...then talk to those people and tell them about your idea. Find out what they want and don't want.
Prior to even attempting to pre-sell customers, survey as many friends, colleagues and acquaintances (a giant, informal and less expensive approach than the traditional 'focus group') via email and/or telephone and tell them about your idea -- go for the largest group possible. While many of your respondents may render you 'false positives,' you'll get very few false negatives. If the overwhelming majority of respondents appears strongly positive (I use a 1 - 5 scale when I survey customer groups), it's likely that you're on to a good idea. Best of luck. - Douglas E. Castle
Incidentally, if you'd like my assessment of your idea (at no charge), get hold of me at http://bit.ly/CASTLEDIRECT .
I would suggest a "go out dirty" concept of the product if possible, following the fail-fast-fix-fast way, if that is doable with your product. In your development, make mock-ups and show to people and get feedback. IDEO would always bring a new "brick" mock-up to the next meeting to get new feedback
You are right about people saying one thing and actually doing something else such as in the Classic Edsel failure.
Richard Stern- It is impotant to research the category within the segment of the industry you are trying to sell. This way you can determine whether your service, or product is relevant to the patrons you are trying service.
Secondly, identify the competition and find catefgories that you can provide that your competitors are not servicing.
The key issue is that new companies will gain enterance to the consumer only if you are providing a solution to a problem, or providing an option that other well established companies are not doing a good job providing.
It helps to know what kind of business you're planning. But here's a thought; suppose you were planning a high-end shop at the local mall. What test could you perform to validate the business idea? You could go to the mall and hand out "coming soon" flyers for the new business, as if you're well along with the development. Maybe get people to sign up to be notified via email for opening day. If you can't get anyone to sign up, you may be in trouble. If you can get people to sign up, you can email them to set up an appointment to interview them.
Fundamentally there are a series of assumptions you need to validate. Break them down into discrete tests to prove or disprove before you rent a space or develop a product.
I have a healthy disrespect for surveys, which tend to qualify lots of false information. I love conversations over coffee. People will tell you the most amazing things.
First, determine your SIC/NAICS Code.
Second, follow the advise of Sean Hurley.
Find a way to offer part of what you want in existing stores first. Get competitive intelllegence on sales of similar items. Do a brochure or executive summary and test 1015 people with the idea (mother-in-law survey).
Use Google Adwords to test frequency of unquie searches for this type of product or items. Commons sense. Hard to describe but key is knowing what to ignore and what to listen to from prospective customers: Famous Henry Ford Quote: "If I asked what they wanted they would have said a faster horse".
You must be certain and firm on your core. These means the target market, product offering and where you invest (in retail the location). You MUST be very flexible to listen to the market on nearly everyhthing else.
My web site has lots of help for new startup CEOs/entrepreneurs: www.StartupPlanet.com and my full CEO Boot Camp DVD set with lots moredepth and tools to design, then optimize a business model.
You will never be 100% out of the gate and need to iterate.