Starting a startup usually looks something like this:
1. Get an idea;
2. Ask your friends for an opinion;
3. Start working on execution.
It’s good that you’re moving straight to execution, but we’d still make a small but probably the most critical change here:
1. Get an idea;
2. Idea validation;
3. Start working on execution.
Startup ideas are beyond the borders of logic. In our article about finding startup ideas, the main point to take away was:
Bad ideas often sound dangerously plausible at first and perceive all the good ones as madness.
That’s why it’s so important to devote time to idea validation. Running a startup is full of ambiguous details, so we have to try everything we can to make it less so.
If you spend some time validating your idea before jumping to the execution part, it won’t just increase your confidence and motivation, but it will also give you a better understanding of the industry you’re about to disrupt. And, you’ll most definitely come across handy tips to better your idea – even before you make your first move!
How to validate our idea?
Every successful project was built around a problem. Users may not have even known that they had the problem, but it doesn’t mean the problem didn’t exist.
“If I asked people what they wanted, they would’ve said a faster horse” – Henry Ford.
For idea validation, you first need to make sure that the problem you’re solving exists.
Google’s smart glasses seemed like a pretty cool idea, but do you know anyone who bought them? People didn’t need to use this product – especially with the price and quality it had.
On the other side, we’re all familiar with the house rental company Airbnb. When it started off, no one believed it would succeed. Paul Graham often repeats that they accepted the founders of Airbnb in Y Combinator only because they liked the team. As it turned out, tourists loved staying at locals’ apartments for the low prices they offered, and the hosts weren’t against letting strangers in for some extra cash either.
Conclusion: If there is a need and if your product serves this need effectively, then you’ve stumbled upon something exciting.
Three questions for validating the need
You can start validating the need for your startup idea with these easy questions:
1. Are there any competitors on the market?
You may be surprised, but the first step of idea validation requires some research. This is probably the simplest research you’ll have to do during your startup journey: Just google your idea. In most cases, you’ll find something similar.
No matter what you think, having competitors is good and even – necessary. It means that there is a market for your proposition. Even Airbnb had competitors even though they were somewhat indirect: Booking.com and Couchsurfer are both examples of competition.
2. Do your competitors make money?
In other words, do they have users who pay for the service/product? Remember, it’s not enough for someone to need your product. It has to be required by a sufficient number of people to cover the company’s expenses, and in the case of a startup – as many as possible to show a sufficient growth rate. If your competitors have only a few customers, think twice about your idea.
3. What sets me apart from my competitors?
If you’ve come this far, congratulations! You managed to validate the standing ground of your project. Now you’ll have to identify what exactly sets you apart from your competitors. This is called the Unique Value Proposition (UVP). Your success greatly depends on this detail, so you’ll need some testing and observation first to find and then be sure of its relevance.
For example, Airbnb’s UVP was renting out homes as hotels (for a short period). As for tourists, they got low prices. That’s how the company managed to compete with all the big players in the market. Today, we find Airbnb’s rentals almost everywhere around the world.
In the case of Facebook, UVP was bringing socialization in the internet space. With Mark’s platform, students could easily find and engage with friends of their friends and people with the same interests. This turned out to be the Unique Value Proposition everyone needed (and it doesn’t matter here if they knew about it or not).
What will be your project’s UVP?
Some options
If you haven’t settled on a Unique Value Proposition, you can start looking for it from the options listed below. Soon you’ll come across the one that’s specific to your idea, just like in the case of Airbnb and Facebook.
1. Better prices;
2. Faster accessibility – home delivery, home delivery in a couple of hours, simple registration, free product check…
3. High quality and/or esthetics – The visual side of a product or a service is also important, along with its quality. If your competitors’ offering doesn’t look very attractive, this might be your space to shine. Remember Apple.
4. Diversity, or additional (but relevant!) services that other companies do not have.
5. Better customer service or a longer product guarantee.
As mentioned before, it’s not enough to just choose one of the options from the list and start executing straight on. There might be a good reason why your competitors don’t offer such benefits. Get into details and start research what your UVP would cost you. This will save you a lot of time and effort.
Four steps for validation your UVP
Get a pen and paper and get ready for your first ride towards the success of your project!
Goal
First of all, you have to decide on your UVP or strategy for finding one. This might be about the market, the problem, or the product itself. Don’t worry, your goals will change during the validation period, so it doesn’t have to be set in stone. Any starting point will do. What’s important is that you’re starting your journey on the right foot!
For example, if you settled on competitive prices, your goal would be to prove that you can sell your product or service in the given range. Or, maybe you’re planning on exploring a new marketplace? This means discovering a new target audience and analyzing their needs. For example, if your competitors target businesses, you may shift your focus towards ordinary people. Or, if there already are tools for professional marketers, you may decide to work on easier tools for those who do not have that much expertise.
Hypothesis
Did you settle on your UVP? Now it’s time to make some assumptions about it. You need to have a specific hypothesis, which you’ll later prove or disprove. Otherwise, it will be hard to set a metric for validating your UVP.
Even though easy-to-validate assumptions seem pretty tempting, they won’t help you objectively verify your idea. You need to pick a hypothesis that is the riskiest and will either make or break your startup.
In the case of Airbnb, the riskiest hypothesis was the assumption that tourists would want to stay at strangers’ apartments, and hosts would be willing to let them in. CouchSurfer partly validated this assumption, but apart from looking into this company, the founders tested the idea on themselves – and even paid their rent with the money they made.
Experiment
The next obvious step is to test your hypothesis. There are different methods you could use:
Survey potential customers
When surveying potential customers, it’s crucial to create a good questionnaire and approach the right people. If you ask them, “Would you use my product?” more often than not, the answer will be yes. Everyone might be interested in your offering, but what you’re looking for are actual users who’d be willing to pay real cash for it. It’s better to concentrate more on the problem that you’re planning to solve. How painful and repetitive is the issue? How are they trying to solve it today? Is it something worth paying for to solve? It’s always a better idea to ask open-end questions than the standard yes/no ones.
Also, find the right target audience to fill out your survey. If you’re working on a product for designers, the answers of bloggers, housewives, and teachers won’t help you much.
Fake it till you make it
It’s a very widespread approach to create a very basic version of your idea and test it in the real world. Let’s take a dome delivery service as an example. Before you build a website, you can create a Facebook page and leave posts in related Facebook groups about your offer. Depending on how many people will want you delivering groceries to their apartment, you can assume if your product is wanted or not. Pro tip: if you do get orders, ask the initial customers a bunch of questions. This will help you start building your product with the essentials.
Research competitors
Address the companies who already offer customers similar services/products. Use their offering yourself. See what you like and don’t like. Have a closer look at customer reviews as well. Make a bunch of notes that validate or invalidate your initial assumption.
Count expenses or do A/B testing
It’s a good idea to roughly count what it will cost you to build your startup and how much money you’ll need from your customers to have it going. Especially if you’re planning on offering lower prices. During this process, you’ll get a better idea of the practical steps of executing your idea.
You can go a step further and publish marketing campaigns with different propositions. Presenting the same idea from different points of view is called A/B testing. This is a well-tested model in marketing, and it will help you get a better idea of what your potential customers are looking for.
Validation
Based on the results of your experiments, you can evaluate your initial assumption. Be critical and objective. If the results aren’t satisfying, it’s better to focus on something else than waste your time building something nobody wants.
Repeat these steps until the results are satisfying. You might have to change your UVP multiple times! One problem might have a bunch of different solutions. If the problem you’re tackling is there and it’s painful, don’t let it go!
There are special boards that will assist you during this process, like the validation board, for example.
How to validate your startup idea with the least time and effort
29 January 2021Starting a startup usually looks something like this:
1. Get an idea;
2. Ask your friends for an opinion;
3. Start working on execution.
It’s good that you’re moving straight to execution, but we’d still make a small but probably the most critical change here:
1. Get an idea;
2. Idea validation;
3. Start working on execution.
Startup ideas are beyond the borders of logic. In our article about finding startup ideas, the main point to take away was:
Bad ideas often sound dangerously plausible at first and perceive all the good ones as madness.
That’s why it’s so important to devote time to idea validation. Running a startup is full of ambiguous details, so we have to try everything we can to make it less so.
If you spend some time validating your idea before jumping to the execution part, it won’t just increase your confidence and motivation, but it will also give you a better understanding of the industry you’re about to disrupt. And, you’ll most definitely come across handy tips to better your idea – even before you make your first move!
How to validate our idea?
Every successful project was built around a problem. Users may not have even known that they had the problem, but it doesn’t mean the problem didn’t exist.
“If I asked people what they wanted, they would’ve said a faster horse” – Henry Ford.
For idea validation, you first need to make sure that the problem you’re solving exists.
Google’s smart glasses seemed like a pretty cool idea, but do you know anyone who bought them? People didn’t need to use this product – especially with the price and quality it had.
On the other side, we’re all familiar with the house rental company Airbnb. When it started off, no one believed it would succeed. Paul Graham often repeats that they accepted the founders of Airbnb in Y Combinator only because they liked the team. As it turned out, tourists loved staying at locals’ apartments for the low prices they offered, and the hosts weren’t against letting strangers in for some extra cash either.
Conclusion: If there is a need and if your product serves this need effectively, then you’ve stumbled upon something exciting.
Three questions for validating the need
You can start validating the need for your startup idea with these easy questions:
1. Are there any competitors on the market?
You may be surprised, but the first step of idea validation requires some research. This is probably the simplest research you’ll have to do during your startup journey: Just google your idea. In most cases, you’ll find something similar.
No matter what you think, having competitors is good and even – necessary. It means that there is a market for your proposition. Even Airbnb had competitors even though they were somewhat indirect: Booking.com and Couchsurfer are both examples of competition.
2. Do your competitors make money?
In other words, do they have users who pay for the service/product? Remember, it’s not enough for someone to need your product. It has to be required by a sufficient number of people to cover the company’s expenses, and in the case of a startup – as many as possible to show a sufficient growth rate. If your competitors have only a few customers, think twice about your idea.
3. What sets me apart from my competitors?
If you’ve come this far, congratulations! You managed to validate the standing ground of your project. Now you’ll have to identify what exactly sets you apart from your competitors. This is called the Unique Value Proposition (UVP). Your success greatly depends on this detail, so you’ll need some testing and observation first to find and then be sure of its relevance.
For example, Airbnb’s UVP was renting out homes as hotels (for a short period). As for tourists, they got low prices. That’s how the company managed to compete with all the big players in the market. Today, we find Airbnb’s rentals almost everywhere around the world.
In the case of Facebook, UVP was bringing socialization in the internet space. With Mark’s platform, students could easily find and engage with friends of their friends and people with the same interests. This turned out to be the Unique Value Proposition everyone needed (and it doesn’t matter here if they knew about it or not).
What will be your project’s UVP?
Some options
If you haven’t settled on a Unique Value Proposition, you can start looking for it from the options listed below. Soon you’ll come across the one that’s specific to your idea, just like in the case of Airbnb and Facebook.
1. Better prices;
2. Faster accessibility – home delivery, home delivery in a couple of hours, simple registration, free product check…
3. High quality and/or esthetics – The visual side of a product or a service is also important, along with its quality. If your competitors’ offering doesn’t look very attractive, this might be your space to shine. Remember Apple.
4. Diversity, or additional (but relevant!) services that other companies do not have.
5. Better customer service or a longer product guarantee.
As mentioned before, it’s not enough to just choose one of the options from the list and start executing straight on. There might be a good reason why your competitors don’t offer such benefits. Get into details and start research what your UVP would cost you. This will save you a lot of time and effort.
Four steps for validation your UVP
Get a pen and paper and get ready for your first ride towards the success of your project!
Goal
First of all, you have to decide on your UVP or strategy for finding one. This might be about the market, the problem, or the product itself. Don’t worry, your goals will change during the validation period, so it doesn’t have to be set in stone. Any starting point will do. What’s important is that you’re starting your journey on the right foot!
For example, if you settled on competitive prices, your goal would be to prove that you can sell your product or service in the given range. Or, maybe you’re planning on exploring a new marketplace? This means discovering a new target audience and analyzing their needs. For example, if your competitors target businesses, you may shift your focus towards ordinary people. Or, if there already are tools for professional marketers, you may decide to work on easier tools for those who do not have that much expertise.
Hypothesis
Did you settle on your UVP? Now it’s time to make some assumptions about it. You need to have a specific hypothesis, which you’ll later prove or disprove. Otherwise, it will be hard to set a metric for validating your UVP.
Even though easy-to-validate assumptions seem pretty tempting, they won’t help you objectively verify your idea. You need to pick a hypothesis that is the riskiest and will either make or break your startup.
In the case of Airbnb, the riskiest hypothesis was the assumption that tourists would want to stay at strangers’ apartments, and hosts would be willing to let them in. CouchSurfer partly validated this assumption, but apart from looking into this company, the founders tested the idea on themselves – and even paid their rent with the money they made.
Experiment
The next obvious step is to test your hypothesis. There are different methods you could use:
Survey potential customers
When surveying potential customers, it’s crucial to create a good questionnaire and approach the right people. If you ask them, “Would you use my product?” more often than not, the answer will be yes. Everyone might be interested in your offering, but what you’re looking for are actual users who’d be willing to pay real cash for it. It’s better to concentrate more on the problem that you’re planning to solve. How painful and repetitive is the issue? How are they trying to solve it today? Is it something worth paying for to solve? It’s always a better idea to ask open-end questions than the standard yes/no ones.
Also, find the right target audience to fill out your survey. If you’re working on a product for designers, the answers of bloggers, housewives, and teachers won’t help you much.
Fake it till you make it
It’s a very widespread approach to create a very basic version of your idea and test it in the real world. Let’s take a dome delivery service as an example. Before you build a website, you can create a Facebook page and leave posts in related Facebook groups about your offer. Depending on how many people will want you delivering groceries to their apartment, you can assume if your product is wanted or not. Pro tip: if you do get orders, ask the initial customers a bunch of questions. This will help you start building your product with the essentials.
Research competitors
Address the companies who already offer customers similar services/products. Use their offering yourself. See what you like and don’t like. Have a closer look at customer reviews as well. Make a bunch of notes that validate or invalidate your initial assumption.
Count expenses or do A/B testing
It’s a good idea to roughly count what it will cost you to build your startup and how much money you’ll need from your customers to have it going. Especially if you’re planning on offering lower prices. During this process, you’ll get a better idea of the practical steps of executing your idea.
You can go a step further and publish marketing campaigns with different propositions. Presenting the same idea from different points of view is called A/B testing. This is a well-tested model in marketing, and it will help you get a better idea of what your potential customers are looking for.
Validation
Based on the results of your experiments, you can evaluate your initial assumption. Be critical and objective. If the results aren’t satisfying, it’s better to focus on something else than waste your time building something nobody wants.
Repeat these steps until the results are satisfying. You might have to change your UVP multiple times! One problem might have a bunch of different solutions. If the problem you’re tackling is there and it’s painful, don’t let it go!
There are special boards that will assist you during this process, like the validation board, for example.
Some advice for successful idea validation
As we saw, idea validation is not that simple after all. Pay attention to some essential elements that will ensure you’re doing it right:
1. Be very critical
Eric Ries, the author of “Lean Startup”, talks about vanity metrics in his book. These are the metrics that look promising but are devoid of objectivity and relevance. For example, if you want to open an online store, the fact that people use online stores is not a guarantee of success.
2. Concentrate on your target audience
If you only survey your friends and family, you’ll get a general idea about your project. But, to get more specific, you need to find your target audience. Look into relevant Facebook pages, forums, events, or webinars.
3. Be consistent
If you start validating your idea today, you have to keep at it tomorrow too. Coming back to the process after weeks or months is equal to starting it all over again.
If you read the article this far, then you have the motivation to go from zero to startup. Focus on this motivation, and we’ll make sure you have the right tips along the way!