If you have a business or you’re thinking about starting one, it’s going to be in the real world. Not in your mind. Your audience and customers are going to be real people, not imaginary. So why are you validating ideas in your head? You need real, hands-on feedback. This feedback helps you make better business decisions.
Idea validation is the process of testing and validating your idea prior to launching your business name, tagline, product, service or website.
I know the next question on your mind is “Why Should I Do this Idea Validation Thing?”
The quick answer is, it will save you a lot of time and money, as well as generate interest in your idea. Since you’re testing your idea, you will be exposing it to the marketplace.
Let us dive into the 5 quick ways to validate an idea.
1. What problem are you solving?
Successful products solve problems – plain and simple. Most successful entrepreneurs take a problem/solution approach to their startup brainstorming. You can do this by first identifying a problem and then building something that is a solution to that problem. If you can solve someone’s pain through your product then that product adds value to the user’s life and he or she will continue to use it and even pay you for it.
A great example of a startup that solved a problem is Gokada. I live in Lagos, I can tell you firsthand that before Gokada came along it was a very painful experience trying to get to your destination quick on the streets of Lagos. You’d be stuck in traffic with other people & cars, who are all competing to get to there destination quick, you could be in the yellow bus, yellow cab, or even an Uber or Taxify cab. You would still spend over 1hr on a 15minutes trip. This is the same process for every Lagosian that is stepping out of their house. This could be a 2 hour to 3 hours hold up during rush hour.
Gokada and other bike hailing services launched and solved that problem instantly. Now you can push a button and your bike man arrives and gets you to your destination within minutes. Problem solved. Pain killed. And now Gokada is valued at over $1 billion dollars.
2. Would you use it?
One of the best tests for validating your idea is to honestly ask yourself if what you are building is something you would personally use. It is important to build something that you would use personally. If you don’t understand the end user or the market well, it is going to be a more challenging road to building a successful product and business. If your expertise is in consumer products and you are trying to build the next great robotic company, you might want to rethink that. Anything is possible, so don’t let me stop you if you want to go after a totally new space than you are used to, but your path to success will be smoother if you stick to what you know.
3. Would other people use it?
You’ve identified you are solving a problem, and you are building something that you yourself would use. But, will other people use it? That’s your next big question to answer.
This question is actually a simple one to answer. Build a simple online survey and share it within your community. You can even use Google Forms for this. Write out a set of generic questions designed to uncover the pains and problems your product will solve. It’s important to make sure that other people view these issues as pains and problems too. Make it anonymous so your friends and family feel comfortable answering honestly.
If you need more responses to gain statistically significant survey results, you can use a service like Survata. For $100 you can get 100 people to answer your survey and you can target a specific demographic. The results of a survey won’t lie. You’ll get real feedback from target users. It’s best to listen to what they say!
4. Does your idea already exist?
You may have an awesome idea. It may solve big problems. Users may love it. But, did someone else already create it exactly like you were planning on doing it? If your great idea already exists in the same way you planned it, that doesn’t necessarily mean you won’t be successful. It does mean your market exists and there is a demand for your product.
If you do feel passionate and motivated to go ahead, amidst a competitive landscape, your next objective should be to figure out a way to differentiate and position your product as the best solution in the marketplace and why it is different and better than the other options.
5. What is the size of the total addressable market?
Total Addressable Market (TAM), is the indication of how much revenue opportunity there is for a product, or what the overall universe for the business opportunity is. If you could capture 100% of the available market for your product or service, what would your annual revenue be? That’s another way to look at it.
Let’s assume a real-world example by looking at the agriculture industry. If you are building a mobile app for farmers who want a way to find other farmers with the same farm produce in their neighborhood for the purposes of scheduling meetups to learn about oil palm, that’s going to be a niche product and small TAM. The farmer has to have an oil palm farm, has to have a smartphone to run your app, and has to be interested in learning about oil palm. But if you are creating a mobile app that connects farmers to insecticide vendors, for instance, then your TAM is every farmer in the world with a smartphone. Now, that’s a much bigger TAM.
To round it up
Your business is your baby. Show your love and care for it and for your customers. Once you are confident that you have a validated idea you will still need to build an awesome product for it to take off. You may have the best business plan in the world, but without customers, your business is nothing. Create a thoughtful customer-acquisition plan and marketing strategy and be prepared to explain it to investors, partners, and stakeholders, as this will undoubtedly be the first questions they ask.
Never forget, it is much easier to build a business around a demand than to build a demand around a business.