Questions

How do I effectively validate an idea for a business with a shoestring budget ?

7answers

There are a lot of places where you can try to get validation for your idea. But before you start going to look for these places, get your Buyer Personas (the representation of your ideal customers) in order.
If you know who your ideal customers are, then the next step (of finding where they hang out) is easy.

You can easily start tapping into your (existing) social network, for example to try to find people to have a conversation with and try to find out if they're really having the problem you're solving.

Another place is local meetups, check out sites like meetup.com and see if they're meetup's in your area around the problem you're trying to solve. Go there and start talking to people!

Online, online there's million of possibilities to try to find your ideal customers and trying to get a conversation with them, use Twitter search, certain Facebook groups around your demographic, newsletters, things like Quora etc. to find people hanging around and trying to get solutions to the problem you want to fix. (there's a ton of online locations in this SlideShare deck if you need more inspiration: http://www.slideshare.net/jcvangent/doing-customer-development-and-stop-wasting-your-time-startupbus-edition)

Don't feel limited by the amount of budget you have, for having conversations with people you don't need a budget, you just need to know where to look to find the correct people to talk to. I recently wrote a blogpost around the subject as well, to give you some tips on how to reach the right people and what to ask them if you want to dig a bit further in the subject: http://inboundrocket.co/blog/stop-wasting-time-how-to-prove-youre-building-the-right-product/.

Best of luck!


Answered 4 years ago

1) Tell everyone about it and gather opinions and criticisms. No one person should dissuade you or boost your confidence in the idea, but a broad spectrum of advice will open your eyes to problems or opportunities you won't have thought of
2) Set up a basic landing page (try unbounce.com or strikingly.com) and set up a low cost Adwords campaign to drive some traffic to it. If you're getting people to sign up for more info that's a good sign, and also gives you potential customers to speak to and learn more
3) Depending on the target market find somewhere you can engage with a bunch of target customers, be that a physical location or a niche forum maybe. Similar to #1 you're just looking for plenty of feedback from the right people

This would give you a good guide on the "demand" side of things. The next step would be to work out if it's financially viable with a big enough potential revenue stream to make it worth the cost and effort of running it...


Answered 4 years ago

1) Do a thorough search to find out if it already exists.If you find it does, do not give up on your inspiration too hastily.
2)Talk to others about your idea, especially people you trust.
3)If your idea has support, then consider developing an MVP, or minimum viable product, to determine if it is a product you and others would really use.
4)If your testing goes well and you feel that you might have a winning idea, start building a brand around it now.
5)Ask questions like
i)"How do I get my first customer?"
ii)"How do I get my n-th customer?"


Answered 4 years ago

It's hard to answer that with no details. If it's a paid b2b (or even some b2c) product, make a landing page and measure how many people click the button to sign up to pay.

And start collecting letters of intent from clients. That makes the initial stage a little bit less risky.


Answered 4 years ago

Research! If your financial budget is tight, maybe you can be more liberal with your time and patience?

I'm cursed with a lot of ideas, many of them that I think are great, that others don't think are so great. Before I learned to validate my products, I became too enticed by building first, validating second.

Now I always validate first. It's hard to find the time and patience to do it sometimes, however validation always pays off down the road. Recognize that time and patience are valuable resources that are usually only limited by your own drive and desire and use them to your advantage!

Some suggestions -

-Search relevant niche forums to see if people are asking for what you're offering.

-Search relevant niche forums to see if people are asking questions that show they're having the problem your product is going to solve.

-Talk to people in your target market to see if they are experiencing the problem you are solving, or are experiencing some form of the problem you are solving, then adjust/adapt your product accordingly.

-Monitor places online where your target market hangs out and answer questions with a genuine desire to help, pay it forward so that when you do ask questions, you're seen as a valuable contributor to the community, not just someone looking to take from it.

Always happy to discuss further on a call and good luck!


Answered 4 years ago

If the goal is to sell something, then the best validation of whether it can be sold is to test selling it. Let people show they are actually willing to pay for the idea of what you are offering. One of the things we tend to do as people, is to say something is just what we wanted, or that we would buy it, but when it comes available for sale, we don't commit.

Read Dan Norris: The 7 Day Startup, for some examples on how other notions of validation fail, and some ideas on how to structure an early setup of sales, such as pre-orders.


Answered 4 years ago

Hi
First of all, the fact that you are talking about market validation is great. I've seen so many startups invest time and money, only to find that no ones wants/needs their product, or that they only want a certain aspect of it (whilst the startup spent money developing a whole bunch of other features), or that they aren't willing to pay the requested price. So you're already one step ahead.

Also, the sooner you validate your product, the better! That said, the version you are validating needs to be representative of the end product, or else the validation isn't reliable.
So, how should you validate it? The best way, is to see whether people are willing to pay for your product/service.

This is how you find that out:
1. create a business model canvas (which is what all startups should start with before creating a business plan),
2. Setup a Wix or Wordpress website (this can be done for free / very low costs) or if your venture is a mobile app, you can create a responsive wordpress website that looks and feels like an app. On the website, include the price of the product/service, and enable people to order it (yes, even if it doesn't exist!). I am happy to explain how this can be done even though you don't yet have the final product and by still being fair to the people who click the "buy/order" button.
3. Spend a small amount (say $100 - depending on your budget) validating the idea (promoting the product/service that you listed in the previous stage).
This way, after only spending a very small amount, you will be able to know (if you did it right):
a. Do people like your product.
b. Do people want/need your product (not the same as 'a').
c. Are people willing to pay for your product? (this being the most important stage)
d. How much are they willing to pay? (you can check this by having 2-3 landing pages with different prices on each).

2 last important points:
a) in order to rule out external factors like an unattractive landing page or advertising campaign, and assuming you have the time, create multiple landing pages / advertising campaigns, with different designs.
b) during the above process, don't forget to check how much it costs you to get each user/customer to click the "buy" button. If for example each click on your promotion/advertisement costs you $2, and only every 10 people who click go on to the "buy" page, that means each sale is costing you $20. Then check what your average profit per sale is, and then you'll know if your service/product is worth pursuing (obviously there are additional factors like return customers, referrals etc, but you will get a good estimated/validation of the idea/business).

I'm happy to help you with this matter further, as this is a critical stage which if done right can save you a lot of time and money.
Best of luck!


Answered 3 months ago

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