You’ve defined your business idea, conceptualized your service or product, found a name, and are now ready for the next step: idea validation. Knowing how to validate your business idea is a very important step of building a successful business. Without an idea validation process, you won’t have any way of knowing whether or not your business idea is a good one that will fill the needs of your ideal customers.
Not every business idea will be a success, so it’s important to take time for business idea validation in order to determine just how valuable and successful your idea can be.
Idea Validation
We will help you to understand how to validate business ideas in order to determine whether or not it is worth pursuing your business venture. This is important as you will only want to commit time, energy, and resources (money, equipment, materials, etc.) into ideas that show promise of success.
There are a few key dos and don’ts for validating your business idea.
The Wrong Way to Validate an Idea
Create A Prototype → Raise Funding → Build The Team → Validate The Market
The incorrect way to validate your business idea is to start off by creating a prototype of your product or service. It’s tempting to create something tangible to show to investors, friends, and family, but you don’t want to put forth a significant sum of money and resources into a project before validating it.
Notice here that “Validate the Market” is the last step in this approach. As you’ll see, validating the idea should be the very first step you take before you create a prototype, find a team, generate funding and push it into the market.
The Right Way to Validate an Idea
Validate The Idea → Create A Prototype → Build The Right Team → Raise Funding
The correct process involves validating the idea first. If it shows promise, then you can proceed with building a tangible prototype, building a team around it, and finding funding for it. Only then will you be able to successfully take it to the next step and eventually bring it to market.
How to Validate Your Business Idea
Validating your business idea sounds like it can be a lot of work. While you want it to be an involved process to verify that it will survive in the market, it doesn’t need to be difficult. Here are a few pointers to get you started.
Browse Top Sellers & Existing Categories
Browse websites in your business idea’s industry and their “top sellers” list. This will give you an idea of what is the most popular options that they have on hand. You can also check the “categories” to see if your product will easily fit within the target market. If it does, you will have better luck getting your own product onto top selling lists.
Use Market Tools to Gauge Market Size
The Internet is flush with useful tools and applications to study a particular industry or market’s size, supply, and demand. Ideator has a Resources Portal with an enormous list of resources covering every facet of building your business, including customer support, development, web hosting, legal services, and so much more. Ideator also has survey and landing page tools to help you understand your target market and get an idea of who might be interested in your business concept.
Cater to Supply and Demand
In order to thrive, your product or service must fill a need. If a particular industry has a high supply of what you have to offer, you’ll have more competition. On the other hand, if there is high demand for what you have to offer and there are very few competitors, you will likely have much higher success. One example of discovering the demand for what you’re offering is Ideator’s landing page resource. You can set up a page that would collect emails based on interest in your business proposition, which helps to validate your idea. When you’ve collected multiple email addresses of people who are already interested in what you’re creating, your idea becomes that much more valuable.
Get Feedback in Person
You can always meet people in person, such as family and friends, or at networking and business events, to gather ideas, opinions, and feedback on what you are looking to build. The ultimate validation is when an individual or business is willing to pay you now for the service or product you intend to build.