A business idea is a concept that can be used for financial gain and is usually centered on a product or service that can be offered for money. An idea is the first milestone in the process of building a successful business.
The characteristics of a promising business idea are: Innovative. Unique.
Validating a product idea: an all-important step to take to avoid wasting time and money building a product nobody wants. It seems like an obvious thing to do, however many times it’s a step that gets pushed aside. The initial stage of Startup development is building a viable business model. For a viable startup idea (Model), the focus mostly comes on balancing two variables:
Here are two great quick ways to market and validate your ideas using prototyping:
Fake Door
Create a Fake Door to your product that doesn't yet exist. This actually means creating the ad for your product before you create the product. A Fake Door could be a Google AdWords- or Facebook ad campaign, where you measure the interest of your product or service through the click-through rate (CTR). If you can't get people to click the ad, you won't be able to sell the product either. If your CTR is satisfying you can move on to make a Fake Door consisting of a landing page, where people actually can sign up for your product/service, and then you can measure the conversion rate, from your ad to your page. You can then also experiment with different prices for your product/service and measure if the conversion rate changes, from high to low prices. By doing this you will know exactly what to sell, to whom, to what price, and how to sell it.
Impersonator
Instead of making your own product, why not just mask somebody else's as your own? When Elon Musk first revealed the Tesla Roadster, it was actually not even an electric car, it was a Lotus Elise masked as a Tesla Roadster. By "wrapping" an existing product in your own packaging, you will be able to test and market validate, ideas that are otherwise very expensive to develop and test. You could use this method in combination with Fake Door, so instead of going out and making a rendition of the product to be used in an online ad campaign, you just use a picture of somebody else's product that looks similar to the product you want to make, just in a masked edition. The idea is to never make something that you can borrow.
In short; prototyping was at first named pre’tend’totyping (developed by Alberto Savoia at Google) where you simulate a product/service in order so that people being exposed to the offering believe it actually exists. The above two examples are just two out of six techniques in pretotyping!
There are many theories for testing ideas. Of course, you should start by talking to people. But it is not that simple. Friends and family will falsely encourage you because they wish you the best. Most people who are experienced business professionals are too busy to truly get into the ins and outs of your idea.
So there is some balance of talking to smart people, doing some cheap market testing, and very importantly, coming into the idea with experience in the industry. You need to have experience in the industry or the first 6-12 months of the business will be expensive learning mistakes. I’m fascinated by the idea of product validation, spending time upfront to confirm that what it is we’re about to build is actually something people want and are willing to pay for.
The more you share your idea, the better that idea becomes. or the more apparent that the idea is not a good one. Share it with friends, family, people in your mastermind group, people in your community, and even complete strangers!
Run a successful campaign, you’ve got a product with paying customers already! If you fail, then you’ve learned that the product may not be the best idea after all.
The only caveat with platforms like this is that if you do run a successful campaign and meet your funding goals, you will have to deliver on your pledge awards, and pledge awards (goodies given to people based on what level pledge they backed your idea at) can be a very exhausting part of the process.
It’s not as easy as a coin flip to truly validate a product or idea, but it’s a whole lot easier putting in that time and effort upfront than wasting a load of time and money down the road when you find out your product didn’t turn out like you had hoped.
There’s no real way to 100% guarantee the long-term success of a product before it’s actually out there in the market, but using these techniques you can definitely increase your chances.
Do you have a business idea? Of course, you do. Why else would you be reading this article?
If you are like most aspiring entrepreneurs, however, the problem comes in the immediate stage following your "ah-ha" moment, when the idea lingers as a passing thought or a series of sticky notes in a journal until the enthusiasm passes. Then, a few months later, you see your idea on the shelf at a local retail store or in the iTunes App Store.
We have all been there.
Ideas stall because the process of getting them to market can seem overwhelming. In reality, if you validate your idea -- prove it has worth beyond the bar napkin on which it is scribbled -- the process thereafter actually gets much easier.
Here are a few things to consider the next time you have your next big business idea.
Run a successful campaign, you’ve got a product with paying customers already! If you fail, then you’ve learned that the product may not be the best idea after all.
The only caveat with platforms like this is that if you do run a successful campaign and meet your funding goals, you will have to deliver on your pledge awards, and pledge awards (goodies given to people based on what level pledge they backed your idea at) can be a very exhausting part of the process.
It’s not as easy as a coin flip to truly validate a product or idea, but it’s a whole lot easier putting in that time and effort upfront than wasting a load of time and money down the road when you find out your product didn’t turn out like you had hoped.
There’s no real way to 100% guarantee the long-term success of a product before it’s actually out there in the market, but using these techniques you can definitely increase your chances.
Do you have a business idea? Of course, you do. Why else would you be reading this article?
If you are like most aspiring entrepreneurs, however, the problem comes in the immediate stage following your "ah-ha" moment, when the idea lingers as a passing thought or a series of sticky notes in a journal until the enthusiasm passes. Then, a few months later, you see your idea on the shelf at a local retail store or in the iTunes App Store.
We have all been there.
Ideas stall because the process of getting them to market can seem overwhelming. In reality, if you validate your idea -- prove it has worth beyond the bar napkin on which it is scribbled -- the process thereafter actually gets much easier.
Here are a few things to consider the next time you have your next big business idea.
1. Look for it. When I hear that someone has the next big business idea, I pull out my iPhone and within minutes can often find an existing product or service with a search on Google or YouTube. Before you even get wrapped up in an idea, save yourself the time and 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. Perhaps there are ways to improve on the existing product? Can you offer value to the business already producing it? Could the market be satisfied better? If you answered "yes," move to the next step.
2. Seek feedback. Talk to others about your idea, especially people you trust. At this stage, what you want is brutally honest feedback. Entrepreneurs have a tendency to get stuck in "idea lock," when they are hellbent that their idea is a winner, regardless of what others say. If you are the only person who truly thinks the idea is good, then it is time to reassess.
3. Build an MVP. 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. Channel your inner "MacGyver" and build a working prototype, or look to a resource that has the ability to leverage newer technologies, such as 3D printing, to help.
If you have a technology idea, such as a smartphone app, look to crowdsourcing or a StartupWeekend event to find the assistance you need. Once you have the MVP, use and test it and have others test it as well. If it turns out to be a product that you and your friends would never really use, scrap the idea.
4. Start building your identity. If your testing goes well and you feel that you might have a winning idea, start building a brand around it now. In today's fast-moving and innovative business environment, an idea that is validated today may be knocked off or even obsolete tomorrow, so do not linger.
More importantly, unless your idea is founded in a groundbreaking and proprietary new technology, more than likely it is already being conceived by someone else already. It is off to the races.
At this point, some fear that "exposing" their idea may lead to someone stealing it. This is a completely valid concern, but these days, you should go on the assumption that someone will steal it or develop a newer and better iteration eventually, so the key to success will be to be first to market.
Also, while patenting is a great way to protect your idea, it is also a very expensive process that is not guaranteed to protect you. If you have the resources, engage a patent attorney and pursue the protection, but if you do not, then turn your focus on building your brand.
Start by choosing a great name and securing the website domain to create, at a minimum, a sharp business landing page. Next, secure your business name with every social media site you can. Even if you do not use them, it protects you from others securing and using them, and it will ultimately improve your search engine optimization. Then start leveraging these resources to build a fan base.
Here are some ways to validate your startup idea:
Talk to potential customers: The best way to validate your idea is to talk to the people who would use your product or service. You can conduct interviews, surveys, or focus groups to understand their problems, needs, preferences, and feedback. You can use online tools, such as SurveyMonkey, to collect and analyze data from your target audience.
Build a minimum viable product (MVP): An MVP is a version of your product that has the minimum features and functionality required to solve the customer’s problem or satisfy their need. You can build an MVP using low-cost or no-code tools, such as Shopify, WordPress, or Bubble. You can then launch your MVP to a small group of early adopters or beta testers and measure their response and behavior.
Validate your assumptions: Every startup idea is based on some assumptions about the market, the customer, the product, and the revenue. You need to validate these assumptions by conducting experiments or tests that can prove or disprove them. You can use online tools, such as Google Analytics, to track and measure the key metrics and indicators that reflect your assumptions.
Seek feedback from experts and mentors: Another way to validate your idea is to seek feedback from experts and mentors who have experience or knowledge in your domain or industry. You can ask them for their opinions, insights, or advice on your idea, product, or market. You can use online platforms, such as Clarity.fm, to connect with and consult experts and mentors in various fields.
Verify There’s a Budget for a Solution: If you have existing competitors aiming to solve the same problem, you can look at their traction. Are they growing fast? Do they have a sufficient volume of customers? Are they (or have they) raising money? Are they hiring? Look for clues of growth.
In most (not all) cases, that’s a great sign they not only have a good product but are generating revenue and finding paying customers. Which means someone has a budget allocated for products like theirs (and yours).
You also want to set a second follow-up with at least 10 of the prospects you spoke with on the phone and get their views on pricing. Not specific, “$5/user/month” pricing, but their initial reaction to paying for a solution to the product they told you they were experiencing.
You would start by recapping the problem and explaining your solution to them (spend extra time talking about the 20% — or why your solution will solve the problem better than anything else).
In most (not all) cases, that’s a great sign they not only have a good product but are generating revenue and finding paying customers. Which means someone has a budget allocated for products like theirs (and yours).
You also want to set a second follow-up with at least 10 of the prospects you spoke with on the phone and get their views on pricing. Not specific, “$5/user/month” pricing, but their initial reaction to paying for a solution to the product they told you they were experiencing.
You would start by recapping the problem and explaining your solution to them (spend extra time talking about the 20% — or why your solution will solve the problem better than anything else).
Some examples of KPIs are:
Customer acquisition: This is the number of customers or users that sign up, register, or download your MVP. This can indicate the market demand and interest for your product or service. You can use online tools, such as Google Analytics, to track and analyze the traffic and conversion rate of your MVP.
Customer retention: This is the number of customers or users that stay, return, or engage with your MVP over time. This can indicate customer satisfaction and loyalty to your product or service. You can use online tools, such as Mixpanel, to track and analyze the retention rate and churn rate of your MVP.
Customer feedback: This is the qualitative or quantitative data that you collect from your customers or users about their experience, opinion, or suggestion for your MVP. This can indicate the customer value and preference for your product or service. You can use online tools, such as SurveyMonkey, to conduct surveys or interviews with your MVP users.
Revenue generation: This is the amount of money that you earn or save from your MVP. This can indicate the business potential and viability of your product or service. You can use online tools, such as Stripe, to process payments and subscriptions for your MVP.
These are some of the common KPIs that you can use to measure the success of your MVP, but you should also customize them according to your specific product, market, and customer segments. You should also monitor and compare your KPIs with your competitors or industry benchmarks to evaluate your competitive advantage and market position.
These are some of the common KPIs that you can use to measure the success of your MVP, but you should also customize them according to your specific product, market, and customer segments. You should also monitor and compare your KPIs with your competitors or industry benchmarks to evaluate your competitive advantage and market position.
