After months of planning, you finally have your first startup idea. Congratulations! But your journey does not stop there. What’s next? It’s time to validate your business idea.
Many startups are likely to provide a product or service without assessing their concepts. Don’t do the same thing. Before manufacturing and accepting client’s orders, idea validation is critical to your success.
Once your ideas are properly validated, you can reduce the risk of launching a wrong product, create a valuable service within a short period of time, minimize unnecessary expenses, prove your concept has good demand, and more.
Now, what are the simple tips and tricks to get your concept validated? Let us explore some of them in this guide! Are you ready? Read on for more details!
1. Ask Help From Your Trusted Connections
It’s exciting to make your services/products available after creating your ideas. But don’t do that. Pause and think. Premature production or manufacturing can be expensive and won’t drive immediate results.
Before you start your business, discuss your concept with some of your trusted connections and be open to criticism. Accept all suggestions or feedback to develop your services according to the needs of your target audience.
Of course, it is frustrating to listen to negative comments. But they will help you find out the areas that need improvement. Once a modification is done, let them reevaluate your services. If it requires further actions, get it done. All repetitive checking and analysis will pay off at the end of the day.
If you don’t have connections, it’s all right! You can find influencers on Facebook, Instagram, YouTube, and other social media platforms. Careful research can be vital. After finding a number of reliable professionals, call and schedule an appointment.
Don’t be afraid! Be confident when you speak with them. Also, be courteous, nice, and accommodating. All of these traits will make the project successful and stress-free.
2. Check and Study Your Competition
After asking for some feedback from your colleagues, what’s next? Check your competition. Whatever the niche of your choice, the competition is tough. As a startup owner, it’s tricky to know how to stand out from the industry.
You can study other businesses of the same kind. To get started, open Google on your Windows PC or smartphone. Then, enter the proper keywords. Thousands of results will appear within minutes.
Now, examine their services, products, discounts, websites, etc. Then, incorporate the idea into yours. Don’t copy! People hate companies without originality.
Whatever the results you gather, your main goal right now is to stand apart from other businesses. There are many ways to create an online presence and capture interests among prospective customers.
It is important to deliver something extraordinary, overcome customer pain points, focus on a specific niche, provide 100% client satisfaction, create a responsive marketing effort, and surprise your market.
Studying your competition takes time and effort. So, don’t take shortcuts. Don’t forget to take down notes. If you have a hectic schedule, find time because the results make your effort worth it.
3. Create a Minimum Viable Product (MVP)
Before launching a product, you want to understand whether or not your service solves your client’s problem.
To do that, a minimum viable product can come into play. What is an MVP? Why should you create one?
An MVP is a product with basic and necessary features that allows you to release it to your target market.
The MVP is a simpler version of your product, enabling you to validate your idea with the prospective customers or users.
Dropbox, Airbnb, Uber, Instagram, and other established companies started as MVPs. But now, all of them have evolved into bigger and more complete platforms.
You can be as popular as these companies soon. Who knows? As long as you offer something new, effective, and of good quality, everything will happen.
Generally, an MVP helps you test your ideas in real-life market conditions. But wait, there’s more! It allows you to release your final product as quickly as possible, detect risk, reduce implementation cost, avoid failures, analyzes client’s behavior, obtains user feedback, tests the performance of the product, gathers improvement ideas, measures the functionalities of your product, gains loyalty from customers, and more.
4. Seek Feedback
Once your clients tried your MVPs, ask them for feedback. Does the product solve their problems? Does it reach their requirements and needs? What features do they want best? Which features do they dislike the most?
Ask any of these questions and be ready for their responses. Don’t feel disappointed with their feedback. Admit the shortcomings of your product. Then, spend time to develop and modify your solutions. Hire talented and capable professionals to turn your goals into reality.
Once the modification is done, let your target market use your products. Be sure, and it’s different, new, special, unique, relevant, and responsive. Of course, don’t expect it to be 100% free from flaws.
If there are still negative feedback, focus on areas that need further improvement. Before your much-awaited launch, make sure your services can exceed their expectations. For that reason, you can drive good sales, a great pool of customers, and a high return on investment.
Once your products are introduced into the market, don’t avoid the thought of providing something innovative to your clients.
Always make them happy and satisfied with your services.
5. Look for Areas Where Your Idea will Fail
It’s not uncommon for new entrepreneurs to believe in their business ideas. Let’s be honest! You feel the same thing, right? Don’t worry since you’re not alone! Most beginners have a high belief in their concepts.
But don’t be over-confident with your startup idea. It’s better to have some doubts as this negative feeling will convince you to look at factors or areas where your product may lead to failure.
Be serious about finding the reasons why your startup idea may fail. Be realistic. Then, take down notes. Next, test them with your trusted colleagues, peers, and other connections. But it would be best to take advantage of possible clients.
Once major obstacles are unveiled and discovered, develop the concept into something that makes your product feature-packed and of great quality.
But it is easier said than done. You just have to spend all your resources to make it happen. Also, be committed to your objective. Although you fail, be eager and motivated to stand and achieve what your heart desires.
Don’t just study everything on your own. Brainstorm with your team members. While it sounds a cliché, two heads are indeed better than one.
6. Evaluate Customer Acquisition Cost (CAC)
Startups commonly use analytics to identify the worth of implementing a particular advertising strategy. Customer Acquisition Cost is one of the top tools for new businesses.
The CAC can help you measure your strategies that work, cost, or not work. When combined with cost per acquisition, the CAC can assist you in determining the overall profitability of your business.
But what does customer acquisition cost? How to improve your CAC? A CAC only refers to the cost of getting prospective clients to purchase your product or service. It can include the expenses for advertising techniques. It is also utilized as a metric for measuring the fees spent on marketing.
CAC can show where your marketing or lead generation methods are working to capture the interest of your target market.
To improve your CAC, there are different and simple ways to follow. You can define your target audience, conduct split tests, increase conversion rates, and automate your marketing.
To examine CAC, you can use online marketing platforms, including social media. What makes these tools apart is that you can make a targeted campaign with a low budget.
7. Control on the Numbers
Does your business idea require investors? If yes, make sure to control the numbers. Although you don’t need new investors, the idea is also good.
Since you have already determined your CAC, it’s time to consider the customer lifetime value (CLV). What does CLV work? It is simply the expected value of specific clients during the time they remain a repeat customer.
Are you planning to provide a subscription? Do you want to deliver something that your target audience will purchase repeatedly? Then, it is critical to search for churn rates for your chosen niche, talk with each customer, and make CLV estimates.
If you’re able to prove that your CLV is higher than your CAC, it will be easy to acquire a number of willing and potential investors. When testing your MVP with the real market, don’t forget to document your findings.
CLV provides other possibilities for new businesses. It enables you to save money as retaining old customers is cheaper than finding new ones.
CLV also encourages brand loyalty, helps you gain more sales, and save time.
8. Study the Market Demand
Another reason why a startup idea fails is when businesses provide a product even without actual market demand.
Before launching your service, identify whether or not your product has good demand from the market.
To discover if your target customers need your product, there are various practices you should weigh in mind.
Talking to clients face-to-face is a common option. In real conversations with businessmen, friends, or investors, it will be easy to share your ideas. It is also a good opportunity to measure how contented they are.
Aside from talking to your market face-to-face, don’t underestimate the benefit of conducting surveys to segment the responses. Google Surveys, Survata, and Survey Monkey can be perfect for beginners like you. Be sure to use a 5-point range for their responses.
Another effective strategy to study market demand is to send cold emails. If you’re unaware of the people to consult with, sending emails will be a brilliant idea. Then, incorporate platforms like LinkedIn, Prospect, Rapportive, and Hunter into your system.
Launching targeted ads is also worth your attention. For those who are not tech-savvy, you can take advantage of Facebook ads and Google AdWords.
9. Grow Your Email List
While studying the market demand, it’s time to grow your email list. Your goal here is to acquire 100 or more subscribers to validate your startup idea.
Now, how to increase the number of your subscribers? There are various list building tactics for you.
If you haven’t tried guest posting, you can give it a shot today. You can start with a basic landing page to capture both the email address and the name of readers who show some interest in your services.
Aside from guest posting, you can maximize the benefit of Facebook ads. If you don’t have enough budget, FB ad is a budget-friendly and cost-effective method.
You can also provide a giveaway. This could provide a bunch of qualified leads. But you might be left with a worthless list of subscribers as some people might just want to avail some freebies.
To enjoy a good and reliable list, it is important to keep your giveaway as related to your upcoming product as possible.
If nothing works, you can outsource the job to a qualified and capable professional.
10. Conduct Non-stop and Intensive Testing
It’s impossible to validate your business idea in one testing. It is better to conduct non-stop validation so that you can provide the highest quality and the finest product of its kind.
Yes, idea validation seems repetitive and tiring. But your efforts will pay off. After a single evaluation, you could receive some negative feedback from your closest friends, colleagues, or real market. Once the modification is done, there will be limited flaws and errors to develop.
After a series of testing, you will see that your product or service is a bit different. So, don’t feel discouraged. It is part of the process, after all.
Whatever the testing platform of your choice, include social media marketing tools into your business. Once utilized, you can target a small group of customers to test your ideas effectively.
When testing, focus on the value proposition, sales channels, and customer segments.
Now that you’re all ready and aware of how to validate your startup idea, prepare the launching of your business. It will be as successful as you imagine in the first place.