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Business Idea Validation Methods Made Easy

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business idea validation methods

business idea validation methods

Innovative ideas motivate us to pursue a dream. This process often leaves us immune to obstacles as well as criticism. To fight the danger of falling into wishful thinking and wasting resources on products that no one needs, logic has guided us to the concepts of idea validation. Here is our take on some easy to understand business idea validation methods that can quickly be manipulated into your business and design strategy.

 

Make Sure Your Idea Is Unique

I start this piece with the most obvious of business idea validation methods: not putting your resources on reinventing the wheel.

Imagine having been working for months on your new app startup, only to find out there has been another app all this time with the same features. The feeling of devastation is putting it mildly.

We will talk about the importance of analyzing your competition before betting big on your idea. You might get away with not having serious competition analysis in place, but not being aware of the competition altogether is another game. There is always the possibility of someone coming up with the same idea before you and even having it executed. Ignoring this possibility and rushing to execution might leave you devastated.

 

Talk About It

I have never understood the religious efforts people put into hiding their ideas until the very moment of release. I have witnessed secretive startups whose employees even did not have a clear image of what they are actually working to accomplish.

When in doubt about whether you should hide your idea, a good rule of thumb is there are only three good reasons to do so:

  • If you have signed a contract with a confidentiality clause.
  • If you are involved in a setting of industrial espionage.
  • If your idea is relatively easy to execute and could be duplicated by anyone.

As for other cases, seriously guys, you must talk about your idea.

I think the reason one might aspire to hide their thoughts is forgetting the importance of hard work in any endeavor. Ideas are pretty much like life goals, in the way that almost everyone knows what they are, but few work hard enough to actually achieve them.

Of course, there is merit in not putting your fine-tuned idea out for grabs but without disclosing your idea at some level, there would be no instance of any business idea validation methods that could answer your doubts.

The thought for a new product or service that is aimed at others could not be perfected by a single mind. Talk about your idea with your prospective customers, independent consultants, lawyers and anyone who might have a point or two. Seek feedback and work them into fine-tuning your idea.

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Go With Something You Know

We all have come to know that not all ideas are gold with the main reason being a lack of first-hand knowledge of the industry or the target audience.

The chances for your idea to have a meaningful impact increases considerably by the depth of your knowledge in the subject.

Imagine your gardener presenting you with an idea about increasing the steel strength. He is asking you to invest your life’s savings on their startup. Would you?

Now if that said person reveals that he has a good 20 years of experience working on a steel mill, you would not have doubted it that much.

Business idea validation methods start with knowing the ins and outs of a certain business. To be able to innovate in an area and to convince prospective investors you should be familiar with the industry. Seek outside counsel or educate yourself if you find the need for more information.

 

Get In Touch With Your Target Audience

Your target audience is your prospective source of income. How they perceive you is going to be the deciding factor of whether you succeed or not. Having a business is about making life better for your target audience, be it by solving their problems or enhancing a feeling or such.

Put the user at the center of your ideation and design process. This means maintaining a relationship with your target audience to know them better and having an open dialogue about how your idea can change to make them like it better.

Assembling target groups, holding surveys, having a branding strategy in place, and talking to the end-user through the design and execution processes are examples of business idea validation methods that stem from the important part the user plays in a business.

 

Analyze the Competition

One of the most effective business idea validation methods is the systematic analysis of your competition. Your competitors have already fine-tuned and executed an idea and they have been testing it in the real-life market. This unique situation is a great source of knowledge for you to be able to differentiate your business and to increase its efficiency.

The potential value hidden in your competitors’ operations is priceless. From their branding strategy to the product packaging there are numerous lessons to be learned for your idea to get better.

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Knowing your competition enables you to devise a competitive advantage for your business that would drive its success beyond the competitors.

 

Get Ready to Pitch

You should get ready to pitch, and I am not talking about the ball game. Pitching ideas in a concise, exact, and understandable manner is crucial for getting useful feedback. A large number of business idea validation methods rely on effective conveyance of the idea in the first place. For this, you should prepare yourself.

You will encounter numerous situations to explain your idea to a diversified audience. An elevator pitch is one of the first things you should devise when starting validating your idea. Elevator pitches are a short and sweet explanation of an idea that can be presented in a time as short as an elevator ride.

Make sure you have prepared different presentations for varying time frames and diverse audiences. Practice presenting these pitches beforehand to gain confidence and avoid mistakes.

 

Get Your Name Out There

In today’s fast-paced business arena chances are that someone else is working on a product very similar to yours. Branding does not start after the end product is ready to ship. By creating a brand around your idea earlier you are intertwining your name with the future product.

Having a good name for the product that can be remembered easily coins the idea for your brand and gives credibility to your version of the product in face of other possible contenders. Also the feedback you get in early stage of the development from the people learning about your idea would be a precious source of knowledge for your business.

 

Build a Proof of Concept

If you have your doubts about the technical aspects of an idea you can test it by creating a proof of concept. What this means is that an idea’s feasibility is tested by creating a part of the system that shadows the doubt over the functionality of the whole system. Building a proof of concept is one of the most powerful business idea validation methods. For sheer example, if you have an idea about building a cool robot that can cook hundreds of types of meals and you have doubts about the robot’s ability to identify herbs and spices, you might test some sensors to check their sensitivity and accuracy. This is what building a proof concept entails. Note that you have not to build any robots yet, but you have tested a single part of the whole system.

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Build a Prototype

Remember the example we talked about in the previous section, the cool robot that can cook hundreds of types of meals.

Now if you decide to also check if that robot could find its way through the kitchen and use utensils, you would have to create multiple parts of a system. Depending on your design strategy, subsystems like image processing, ultrasound sensors, mechanical arms, and motors should be put on the test.

To answer your doubts you would have to go to the next level of business idea validation methods. This is what we call building a prototype. By building a prototype you are creating multiple parts of a complicated system to answer your doubts about the possibility of an idea and making design-related decisions. Note that you have not yet started developing a product. What prototyping entails is experimenting with a working system to test the most important challenges you face in designing a functioning product.

 

Go With a Minimum Viable Product

Making a minimum viable product is developing a working system that holds the core functionalities of a potentially more extensive idea. A minimum viable product is put on the market and can generate revenue, but the main reason for doing this is to test the viability of the idea in real-world situations and use the feedback to decide if/how to develop the idea in its whole.

To clarify the concept of the minimum viable product we should go back to our original idea of building a cool robot that can cook hundreds of types of meals. A minimum viable product here would be a simpler robot that can cook 10 types of simple breakfast meals in a particular type of oven using ingredients that the user puts manually in specially labeled containers. As complicated as it might sound, this would be far simpler a product compared to the original idea we had of a robot navigating the kitchen autonomously and cooking everything you desire.

The goal of building a minimum viable product is putting your name out there and to test the waters for your big idea. Developing a minimum viable product is one of the most powerful business idea validation techniques that create a real product that can be presented to real customers. This process creates genuine feedback that can be transformed into precious knowledge for further developments.

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ARDOXSO Weekly Blog currently has 5 members at its editorial board and publishes about 250 articles annually on ARDOXSO blog.

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