Since we established the importance and benefits of validating your startup last week, in this post, we are going to share tips on how to validate your startup idea.
However, if you’re still not convinced and are considering skipping this crucial step in building your startup, below is a figure that highlights the top reasons startups fail by CB Insights. In the top 10 reasons, you’ll notice there are 4 reasons that could be resolved during the validation stage: market need, pricing, user experience of the product, and listening to customers.
If you don’t validate your product, you could end up with a product no one will pay for, and you would have invested a lot of time, energy, money, and this will take a toll on you as you could also end up feeling defeated, stressed, and burned out.
So let’s get started!
Here’s how you could validate your startup prior to launching or raising a single dollar:
STEP 1: WRITE DOWN YOUR STARTUP CONCEPT
The concept of your startup is the structure of how your idea is going to be done and achieved. To develop the offering concept, you have to grasp an understanding of your target market, see if they really need what you are planning on offering them, and if so, how would they purchase it and use it.
Here are a few questions that you are going to have to answer:
- Who is your target customer? (Create a profile of your typical customer)
- What exactly will you be offering them?
- What problem will it be solving?
STEP 2: FIND YOUR TEST CUSTOMERS
Find people who fit the profile you have created. There are multiple ways you can do this such as using your network of acquaintances who fit the profile, through LinkedIn, or through events that attract your target customers. Find as many people as you can, ideally 30 – 50 people.
STEP 3: PREPARE YOUR QUESTIONS
Think about your questions carefully because the success of your startup with depend on the questions you will be asking – and how you will be asking them.
While writing your questions, keep in mind that the purpose is to get a better understanding of the problems, how and why these problems persist, and what would it take for them to adopt your product.
Ideally, you want to come up with around 10 questions to ask them. Your questions need to be open-ended. The outcome of your questions is to validate:
- Do they experience the problem?
- How painful is the problem for them?
- How are they currently solving the problem?
- Would they pay for a solution to the problem?
STEP 4: START INTERVIEWING
Now that you’ve found your test customers and prepared your questions, you want to reach out to them and have a chat with them. We advise that you talk to them and not email them the questionnaire. You will find that you will get a better quality of responses using this method, plus one of your interviewees might raise a point you had not taken into consideration and you could immediately follow up on that.
Create a document where you collate all the answers. Once you receive 10 answers, you will start getting a sense if you have identified an actual big problem, or a problem that would be nice to have fixed.
If the problem is not a big problem, but one that your customers think it would be nice to have fixed, then we suggest you don’t build that startup. People will not pay to use your product unless it’s a big problem for them.
STEP 5: FIND OUT IF THERE ARE EXISTING SOLUTIONS
Through your interview process, you will get a grasp of how your target customers are currently solving the problem. They could mention a product, a process, and more ways.
This is why it’s imperative that in your questions you find out how they handle the problem.
If they are currently using a product, get an understanding of what they dislike about it, what could enhance their experience, so you learn where you can add value.
You shouldn’t be scared of the fact that there are competitors in your space – more often than not, it means that there is a market for your product. However, you don’t want to launch a product that is more or less the same. You want to launch a product that’s at least 30% distinctly better than theirs.
If they are not using a product, what is it that they are doing? Are they using multiple softwares? Outsourcing? Manually?
CONGRATULATIONS! YOU’VE COMPLETED THE STEPS!
If you’ve completed the steps you:
- Have a clear articulated problem
- Found that at least 30 people are experiencing the problem
- Identified an opportunity to solve that problem in a better way
- You can articulate how your solution will be better to your customers than any existing solutions.
If you have any questions or require some assistance with these steps, feel free to reach out to our team. Our mentors are available to assist and guide you.