Many entrepreneurs want to know how to validate their startup idea. After all, 90% new businesses fail and you wouldn't want that.This article will help you find validation for your idea.
Startups need to validate their idea because they don't have the resources or the time to waste on an idea that may not be viable. They also need validation to make sure there is a market for what they are trying to sell.
Many factors can make a company successful, but the most important thing is that people want it and need it.
Why Startups Need to Seek Validation and How to Do it?
Startups are often under a lot of pressure to get their product out and in the market as quickly as possible.This leads them to skip validation. However, if they want to be successful and not waste time and money, they should make sure that their idea is validated before they start investing in it.
Validation is important for any startup because it helps them identify the potential problems with their idea or product. This will help them avoid wasting time and money on the wrong investment. And also investors will notice if you have done it right, before they do investment decisions.
There are many ways startups can validate their idea or product but no one method works for all startups. They need to find the right validation process for themselves. This depends on what type of business they have, what stage of development they are at, and who their target market is.
8 Layers of Business Validation for Startup Ideas
1. Talk to Your Target Audience- Customer Feedback is Key
Customer feedback is the key to any successful business. The customer’s opinion is what matters most in today’s world. As a result, it is crucial for businesses to get feedback from their customers to know how they feel about their products and services.
The best way to get customer feedback is through customer interviews or surveys. However, both of these methods are time-consuming and costly. To avoid these problems, companies can use Customer Feedback Tools to help them collect feedback from their customers easily and cost-effectively. These tools are designed specifically for this purpose,making them more efficient than other methods.
2. Ask the Experts - Is Your Idea Worth Pursuing?
The question of whether or not to pursue an idea is one that many entrepreneurs ask themselves.
A good business plan consultant will be able to help you with all aspects of your business - from marketing strategies to cash flow projections. They can also help you solve any problems that may arise during the process.
These professionals are knowledgeable about different industries and are able to give advice on what has worked for other companies in the past. They can also give you advice on how to avoid mistakes that previous entrepreneurs have made when starting their own businesses.
Business plan consultants can be found in various industries and sectors, such as startups, small businesses, large corporations, non-profits, etc.
3. See if there are any Similar Ideas on the Market Already - What are the Strengths & Weaknesses of These?
A startup competition is a great way to find out if there are any similar ideas in the market already. This will help you decide if your idea is worth exploring or not. You can also use this opportunity to learn about other startups in the same industry and get some valuable feedback.
The benefits of this approach are that it will save you time and money in researching your idea, and it will also give you an edge over others who do not use this technique when coming up with their own ideas.
The drawbacks of this approach are that sometimes the competitors may be ahead of you, which means they already have a lot more experience than you do in this space, so there may be little chance for you to compete with them.
4. Do a SWOT Analysis - What are the Strengths, Weaknesses, Opportunities & Threats of Your Idea?
A SWOT analysis is a technique to identify the strengths, weaknesses, opportunities, and threats of a company or product. It is an analytical tool that helps to identify the business's position in the market and what it needs to do in order to achieve its goals.
The SWOT analysis can be done on a company, a product, or any other entity.
A SWOT analysis looks at four main factors:
- Strengths - what are the company’s strengths?
- Weaknesses - what are the company’s weaknesses?
- Opportunities - what opportunities does this situation present?
- Threats - what threats does this situation present?
5. Use Different Platforms To Check Market Trends
Google Trends, Google Keyword, and Amazon are great platforms to validate your startup idea. Confused, how? Let's get into it one by one:
- Google Trend: Google trend is based on Google search; it tells how much users actively search for a certain product or service. It has an amazing advantage that you can get an understanding of how often your product or service is searched among various regions of the world.You can see the growth trends over time, which is great to understand if your planned business has a demand in the market.
- Google Keyword: You can further research the market demand of your product or service by checking the level of searching through Google keywords and typing in different phrases or words a user would generally use to search for the same business. That way, you will gain better insight into what people are looking for, which will help you design and promote your business using consumers' pain points.
- Amazon: You might be confused about how come Amazon is on this list? You see, Amazon is a widely used platform by consumers to buy a product. Thus, when you see people purchasing the same kind of product, you will have more validation.
6. Research Your Competitors
Another thing that helps validate your startup idea is looking at the performance of your competitors. You can gain a better insight into how your target market has responded to similar businesses. This also helps in creating more ways to make your product unique. By introducing different elements or applying different marketing strategies, you can make your business stand out from others.
When researching your competitors, look for answers to the following questions:
- Who is thriving in the market?
- How many companies have started a similar business?
- What makes your service different from others?
- Or are you going to sell the same thing as them?
- How can you gain market share if the competition is dominating?
We consider all of that in our market research services.
7. Practically Test The Market
Selling your product or service prototype practically validates your startup business idea. The best method to do it is by developing MPV, a minimal viable product.
This is a strategy in which a product is designed and introduced in the market with key features, having minimal difference from the final product. It does not involve using detailed planning but generally gives a practical result of what value the product has in the market and if people are willing to pay for this kind of product. You can focus more on figuring out the minimum requirements for getting a product out there in the market instead of spending a lot of time developing a detailed business plan and carefully designing and crafting the perfect product.
This puts you on a much safer side as it does not involve heavy funding or putting a huge amount of resources at work. Moreover, if the response is great and there’s a huge appreciation of your product, you can get investors to put their resources into creating the final product.
8. Check for Patent or Copyright Infringement
When you create a product or service, it is your responsibility to make sure that you are not infringing on any patent or copyright.
The first step in avoiding patent and copyright infringement is to conduct a search to find out if your idea already exists. You can use legal databases such as Google Patents, U.S. Patent and Trademark Office, and the Canadian Intellectual Property Office.
The second step in avoiding patent and copyright infringement is to do a thorough check for patents and copyrights online with the help of Google Patents, U.S. Patent and Trademark Office,Canadian Intellectual Property Office, or other legal databases available online.