We all have ideas. Some of them seem like awesome startup ideas we should pursue.
But how do we know for sure? How do you know if the startup idea you have is worth pursuing?
In this article, we break down 5 interesting methods startup founders use to validate their ideas. We show you how you can determine whether your startup idea can succeed in the competitive market.
Most of the methods we share are relatively easy to do. You don’t need a lot of resources to try them. The only thing you will need to invest is your time.
Are you ready to find out if your startup has a future?
Let’s dive into the methods, starting with the first one – developing a minimum viable product.
Minimum Viable Product – MVP
A minimum viable product is a marketing and development tactic where the product is introduced to the targeted audience with only the core features. The goal of the MVP is to gather initial feedback from the intended users.
MVP has just enough features and functions to be usable by the early adopters. The goal of the MVP is to avoid lengthy and costly development processes before gathering feedback.
We don’t want to spend a lot of time and resources on our startup idea only to discover that people in our target market aren’t interested in the product.
Creating a minimum viable product means you won’t have to build your startup based on assumptions. You will have genuine feedback from people that are using your product.
This approach is especially useful for startups that have a product. The product can be an app, software, or physical product. It’s harder to use this approach with service-based businesses. You can start with one core service and expand the offering based on the feedback you receive from initial customers.
To give you an example from the real world, Dropbox started with a minimum viable product. Instead of launching a complete platform, they simply shared a video explaining the benefits of storing all the data in a single place.
Based on the positive feedback they received from potential customers, they were able to get funded and eventually develop the file-sharing platform that we use today.
Think about how you can create an MVP for your startup idea and start getting feedback from potential customers.
Secondary Market Research
Market research is the action of gathering information about consumers’ needs and preferences. We want to find out what customers think about our product or service.
We have two main types of market research:
- Primary market research – This is where you go out and collect information through first-hand research. Primary market research includes client interviews, focus groups, surveys, questionnaires, etc.
- Secondary market research – This is where you rely on the information collected by someone else in the past. Secondary research includes industry reports, case studies, magazines, newsletters, academic journals, etc.
As you can see, primary research is the research we do on our own. It’s also the research that costs more money. You can imagine how much it might cost to organize focus groups.
That’s something most startups can’t afford. Instead, we suggest you make use of secondary market research.
You can find many journals, industry reports, and magazines online. In most cases, you can even get them for free.
Another great source of valuable information is financial reports from publicly traded companies in your industry. You can learn a lot about their best practices and marketing tactics by going through their reports.
You can get great insight into your customers’ needs and wants from secondary market research sources. Knowing what they want or need can be enough to validate your startup idea.
The only time this method doesn’t work is if you have a groundbreaking product (or service) that aims to completely revolutionize the industry.
Spy On Your Potential Customers
We’re not asking you to become a real-life Sherlock Holmes and actually spy on your customers. You don’t have to sneak into their homes or offices to learn what they want. Or to learn what’s bothering them.
What we suggest is to find places where people from your targeted audience hang out. These can be popular online forums, social media groups, or even physical locations if you know your buyers prefer real-world interactions.
Once you find a place like that, join the community and start listening. What are your potential customers talking about?
Are there any things that seem to be bothering them? Are they looking for a simple solution to a problem they face every day? Try to find things they are missing.
Can they solve any of their problems with a solution that your startup provides? If they can, you have real validation for your business idea. You just found real people that are looking exactly for what you’re offering.
Make sure you’re not harassing people in the communities you join. This is the easiest way to alienate people from your target market. Instead, try to be honest with them. Tell them who you are and why you’re there.
Don’t try to sell. Be genuine and ask them for help. You’ll be surprised how far honesty can take you. People that are passionate about something are often happy to help businesses that genuinely want to improve the thing they are passionate about.
Knowing what your target audience thinks can help validate your startup idea.
Talk to People
You can consider this method as a close relative to spying on people. Instead of listening and observing their conversations, you’ll actively participate and ask questions.
These types of conversations are best-done one-on-one. You can do it in person or use one of the popular messaging apps like Zoom or Google Meet.
First, you need to find your end-users. You can contact people you know who bought a similar product from one of your competitors. You can also ask a few people in the online communities you were spying on.
Second, you need to conduct interviews. You don’t have to set this in a professional environment. You can have simple, laid-back conversations where people tell you what you need to know.
Your goal is to find out what they’re missing in the products that are currently on the market. Try to find if there’s a solution they are looking for. Do they face any problems they are desperate to solve?
|Did you know?|
Over 40% of startups fail because they don’t do a good job researching their target market and building an unlikeable product, according to the study done by CBI insight.
It’s usually best to ask indirect questions. People often don’t know how to answer if you ask them what they hate about the products they are using. Instead, ask them to explain to you how they are using the products.
You will quickly find patterns and trends. If one of your competitors has a feature your end users love, they will tell you. The same holds true for the features they hate.
The best thing about this method is that it’s completely free to do. All you have to invest is your time. You will speak with real people who might become your customers down the road.
This is an elegant method that can help you validate your startup idea. Be polite and ask people for their opinions.
Show You Believe and Listen
Your potential customers are more likely to connect with your brand if you show you believe in the product or service. It makes sense, people see value if the founder is willing to put their name behind the startup.
Let’s explain what we mean by showing you believe with a well-known example from one of the most successful startups of the past decade – Airbnb. Did you know that the first listings on Airbnb were the founder’s own apartments?
This was an elegant way of showing they believe in the idea behind their startup.
What started as a small startup soon became the app that’s shaking the foundations of the accommodation industry. One of the reasons the idea got so much traction was that the founders were willing to invest themselves in the startup.
You too, can start small. Think of ways to show your end-users that you believe in your startup. How can you show your passion for the project?
The basic idea of the method is this – become the first publicly known user of your startup and start sharing your experience. Listen to the feedback you receive and adapt your startup accordingly.
You’ll be more likely to get feedback if you show you believe in your product.
Sometimes You Just Have to Try
We always recommend getting feedback from end-users and validating your startup idea. But that doesn’t mean your potential customers are always right. Sometimes, they might convince you your idea isn’t worth pursuing when it actually is.
Steve Jobs once famously said: “A lot of times, people don’t know what they want until you show it to them.”
It’s hard to tell what you want if you don’t know what you’re looking for. That’s why a lot of really groundbreaking products hit the market with little-to-no market research.
Big brands have the budget to validate their ideas with focus groups and interviews. Most startups don’t have this luxury. That’s why sometimes you just have to be bold and try.
Don’t neglect peoples’ opinions. But be aware that sometimes their opinion isn’t the one to listen to.
Launching a startup isn’t easy. Everyone would have one if it were easy. First, you need to have an idea worth pursuing. Let’s say you have an idea. How do you know if it’s a good one?
We shared some of the most popular validation methods startup founders use to analyze the potential of their ideas. You learned how to easily check if your startup has a future.
Are you going to start a business, if the answer is yes, you will have a lot on your plate – from naming the business to launching it into the market. Don’t worry, we can make your first step easy: use our startup name generator to create the perfect name for your new venture.
We also learned that sometimes you have to go against the tide. Some startups make it even when the whole world doubts them. But you have to remember these are outliers. It’s usually better to get positive feedback from people before investing your time and money into your startup.
Make sure you validate your startup idea. Good luck on your journey if it turns out that you have a solid idea in your hands.