What's the best way to validate your idea?
I hear that before launching your company you should first validate your idea. How do you go about doing that?
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Feb 20, 2013
I had discussions with longstanding professionals in the field so as to understand where, how and if the business concept slotted into the current framework, evaluating it's USP by their overview of the status quo. Professional insight is worth its weight in gold. I found getting validation for the idea is very different than proof of concept which is the moment when in describing your service or product, the person enthusiatically replies with a wish to have what you're offering. Listen, learn and be flexible.
Feb 9, 2013
The best way to validate anything is by taking action and testing it. If you offer a service, find 1-3 clients willing to work with you to test your ideas and provide feedback. You can offer your services for free or a reduced fee as the value you receive is in their feedback and building testimonials for your organization. Good luck! Connect with me for further help/discussion.
Feb 3, 2013
List them down and discuss with fellow peers whom you might join to start the company or if you begin the company alone then check research out there that might be similar to a company you are launching. Because it with give one a rough idea what to expect in a challenging market.
Feb 3, 2013
Use a survey - some people you know and some you don't - give 5-10 questions about your idea without giving it totally away. Use T/F or multiple choice answers. It should give you enough info to see if the plan is valid or not.
Jan 30, 2013
put up a google adwords ad with the idea name and the benefit. link a landing page to it and measure the click thru rate. on the landing page say that your product/service is in the making and that you can send first tips if the visitor leaves her email address. count 20% of those who leave the address as future customers and do the maths
Jan 29, 2013
Interviews and surveys before you even have something to sell.
Only after you've validated your idea/your users/your customers/your revenue stream, then spend time and money on "building" your Minimuv Viable Product (MVP) and then test it with your users/customers/revenue stream etc.
Jan 29, 2013
To the best of your abilities, identify your target customer, and go talk to them. Ask them about your proposed product or service, and get feedback on your assumptions.
If you live in an area with a mass transit system, I recommend going there to find folks to chat with! People who *just* missed the train have a few minutes, and most (at least here in Boston) are very welcoming if you're friendly.
Jan 29, 2013
Find groups of people who you believe could become customers and do some market research with them. And ask them who they know who might be willing to help you with your research as well.
Jan 29, 2013
For online services I tend to recommend a launch page to start and start content marketing and talking to people or businesses. Use Twitter, Facebook and LinkedIn to see if they care and drive them to your launch page. If you feel its good enough, then create a very small prototype and create a community of beta users. Use tools like betali.st and startuprocketlauncher.com to gain a following fast and engage the users. Again, if its not working out so well, ensure your messaging and users are aligned. Part of starting a business is knowing where your users are and pitching them and converting them. If you can't do it now, then work on those skills first then focus on your product... maybe try another idea you have first and try to sell it and experiment and practice. This is all part of validating your idea. Think of what sort of metrics you should see as success. Count the small ones not just the large easy sales which actually don't help you learn about your industry or space. Its the small failures that you learn from. If you are not reaching your intended audience, it forces you to make changes to your pitch or product etc. Good Luck!
Jan 29, 2013
Use a business model canvas http://bmfiddle.com - the canvas will be your your scorecard as you develop your idea. (Disclosure - I built this free tool with over 2500 members to date)
Start with blocks 1 and 2 - value proposition and customer segments. Make sure to check the Help as you work on blocks for some pointers. nothing is right/wrong - get all your ideas/thoughts down and then you can start to focus/order them.
The items on the canvas are all really guesses. So once you have them on the canvas you need to validate them - turn guesses in facts by proving them true or false. You do this with tests.
Business Model Fiddle also has templates for other useful tools/exercises such as SWOT, Personas etc.
Depending on the nature of your idea it may be viable to create a Minimal Viable Product (MVP) with which to test (a prototype version with limited features).
Tests can include a simple web page with information and "sign up" form to gauge interest. Validating by talking to potential customers etc.
Update the canvas as you get results and add new "guesses". You can take Snapshots of the canvas to record your progress and capture key changes.
This approach will minimize waste/costs and get you to a working solution quicker. It also sets you up really well to write a formal/traditional business plan as the canvas blocks support/map to sections of the plan.
I highly recommend Steve Blank's book "The Startup Owners Manual"
http://www.amazon.com/Startup-Owners-Manual-Step-Step/dp/0984999302
Jan 29, 2013
The very first thing in my opinion is to determine the difference between an idea and an opportunity. A good idea does not mean it is a good business opportunity and vice a versa. So, ask the great start up questions, go to the SBDC and SCORE as suggested already, and then assess the risk. What do you all think?
Jan 29, 2013
If you are using validation as a synonymous term for proof of concept about the only thing that matters to investors are sales that meet the projected LTV i.e. someone liked your idea enough to buy it and once they bought it their needs were satisfied as evidenced by the fact the service contract stayed in place, was renewed, your product was not returned, etc.
As early as possible in your development stage identify core target markets as defined as "if they don't buy, no one will" and get as much feedback/input from them as possible. Even if it means offering them the product for free once developed. Keep in mind however, while many will say sales as the ultimate proof of concept; sales alone mean nothing. For example - if you offer a service which requires a 13 month period to recover CAC and your engagements never make it to 13 months you are in trouble even though sales were good.
This is why valuation is so difficult and typically poor for pre-revenue companies – no one really knows how the product/service will be received in the long run among the real world.
Jan 29, 2013
A few things I advise my concept-stage clients to do:
1. Build yourself a beta site. Position it as a sales and marketing site (not a business plan site). Practice describing your product so people will understand it and want to buy it in the space of a web session. Make it awesome.
2. Promote the hell out of it. Personal invitations, social networks, SEO, PPC, and everything else you can think of. TechCrunch, Angel.co, industry and topical blogs, etc. Use landing page optimization techniques to fine-tune your positioning and keywording and conversion rates.
3. Collect customers who are interested in your product. Email addresses and Facebook likes are fine; full registrations are better. Ideally, get people to pay you actual money now (or promise to pay you actual money) to use your product when it's available. Pro-tip: use a crowdfunding site to pre-sell your customers on a "if-we-hit-our-goal-we-all-get-to-be-customers" basis.
4. Iterate until your pitch starts to generate supporters on its own. THEN build your product.
Things not to do:
1. Think that validation from friends or entrepreneurs or investors is the same as validation from customers.
2. Wait for your product to be built before you validate it.
3. Assume that your idea is right in its first iteration.
4. Fall in love with your idea at all costs (I call this the American Idol Syndrome).
In the modern startup environment, traction is the ball game. If you can't generate interest with one approach, change your approach until you do. And if you can't figure out how to get people excited about your business at all, your idea probably isn't ready.
Jan 29, 2013
Jen, started a similar discussion 2 months ago and got interesting answers. Hope this helps.
http://www.mosaichub.com/open_forum/question/new-bus-idea-should-i-put-it-on-the-open-web
Jan 29, 2013
Great answers. Validation should clearly be part of the launching period to help determine as fast as possible what customers want and don't before investing money and time. Should check out the book The Lean Startup by Eric Ries.
Noah Kagen founder of AppSumo has written a lot about testing fast also on his blog Okdork.com Suggestions like testing on Craigslist to see if there is even an interest for the product or service by putting up some good ads. Dane Maxwell is another great speaker on the topic from thefoundation.io/blog He also suggests different ways of validating ideas and having the demand pay for the product/service. Good Luck!
Jan 29, 2013
Create a Funds Needed (before you start) list. Estimate your sales, then decide when you will get paid for the sales = cash receipts. Enter the Cash Receipts and all expenses on a Cash Flow. Study the bottom line.
Charlene
Jan 29, 2013
Jen, Not sure where I came across this brief but pertinent info which should help answer your question:
The Step Zero Viability Checklist:
1. What problem are you solving and how big is this problem?
2. What’s your solution? What makes your solution the best?
3. How will you make money, and how much will you make?
4. How will you market your product or service?
5. Who are your competitors? What makes you better?
6. Do you have the proper team to pull this off?
7. Do you have the right mentors for the right areas of your business?
8. How much money do you need before you can start turning a profit?