With over 700,000 new businesses launching every year, more than half will fail before reaching a five-year mark. If you’re considering turning your next startup idea into a reality, how do you know your product will be successful? Here are five actionable suggestions to improve your validation process when beginning your entrepreneurial journey.
1. Establish a Problem that’s Worth Solving
The first part of any business plan is establishing the needs of your target audience. According to Forbes, “the two key pillars of any startup are the existence of a problem and a solution. However, a solution without a problem is worthless, no matter how innovative it is. Yet, not all problems are big enough for customers to care to solve. Thus, you have your first validation sign if you identified a problem worth solving.”
To establish if your service or product solves a consumer problem, benchmark and critique your idea against the following actions:
- Conduct market research: When launching a product in an established market, research how consumers behave in that space. What are they buying? How often and when?
- Test your assumptions: If you have an idea about a product or consumer behavior, remember that it’s just an idea. Objectively challenge your assumptions and accept that in doing so, your approach may change.
- Interview potential buyers: Talk to your family, friends, and any potential clients. Do they need your product? How can you make it better?
2. Scope Out the Competition
While being first in an industry gives you a market-share advantage, entering an existing space with competition gives you perspective. If you’re releasing a product into an established market, leverage your competitors’ insights to improve your product differentiators.
3. Identify Your Ideal Customer
How do you identify your ideal target audience when you don’t have customers yet? In the beginning, think of your product in broad terms, considering your ideal consumer’s age, gender, location, behaviors and needs. Combine this data with competitor audience research and potential new markets.
Once you’ve begun this research process, ask yourself questions like:
- Will I operate in a niche market, or sell my product to a broader audience?
- Will I sell high-quality products at premium prices, or target the budget-conscious consumer?
Your answers will help you refine your product under the parameters of your intended audience.
4. Build a Minimum Viable Product (MVP)
For the startup team at CoBloom, “creating a perfect, polished product can take hundreds (sometimes thousands) of hours of development time – and there’s no guarantee that people will even use it, let alone pay for it.”
Before investing extensive time and resources into your idea, create a minimum viable product (MVP) model to test its success. An MVP is a designed product with enough features to attract your customer base and validate your idea without finalizing every detail.
Consider building a landing page for your startup idea, where consumers can purchase your product before you’ve finished development. Create the page, talk about your product’s benefits, and set up a Google AdWords campaign to drive traffic. Within your content structure, allow visitors to request more information to track your conversion rates and measure interest.
5. Sell Soon
If you’ve made it this far, congratulations! Now, it’s time to get started. Experts at Entrepreneur suggest that, “selling soon, even before creating the first version of the product, is an excellent way to validate the need for an idea and build a pool of believers who will help you launch a product that addresses their needs.”
Whether this is your first startup idea or your fiftieth, once you’ve done your homework, it’s time to get out there. Good luck!