So you have an idea that you feel can turn into a great business! However, before plunging fully into the creation of that enterprise, it is essential that you carry out thorough ideation. All great ideas do not translate into big businesses and you wouldn’t want to learn the hard way, do you?
Here are a few steps that can help you validate your idea, saving you a lot of time, energy, stress, and of course without burning out your finances.
- Identify the gap you want to fill
Study the market well, and write down the problem, not the solution. It will help you to clearly isolate the exact need/pain-point that you wish to target. Once you have a handle on the market gap, you will be able to identify the possible solutions and the value you can provide. In fact, refine the problem and fine-tune it to a granularity level that can be easily measured and tracked later. You can also conduct a survey and see how many people actually agree to or associate themselves with the problem. This will give you a quantified measure to validate if the problem really needs a possible solution.
- Assess existing solutions
Analyze the market for possible solutions already available in the market. There could be many before you who have identified the problem and may have cutting-edge solutions already. Nobody would buy your product if there were too many fish in the sea, with some already having proven their worth. Write down each solution’s pros and cons. It will be a double edged sword, helping you position your own solution better and also give you a lead against your potential competitors later. By being well versed with the problems and the existing solutions, you will be able to identify and design your own USP, based on these findings.
- Leverage your friends to validate your idea
Float the idea amongst friends, and see how they respond. The best result is to see if they will become your customers. And ask them to keep using your service – despite of how good or bad you are doing – so that you keep getting points to act upon while you are still on the drawing board.
- Invest in a small-scale pilot exercise
It pays to conduct an on-ground activity to see what kind of a response your idea will get. It can help you get valuable inputs for the validation of your idea and save you unwanted stress in the long run. Lessons learnt from the pilot can prove handy in avoiding heartburn and help you improve your solution before it hits the market in a big way.
- Have a viable business model
No matter how good the idea, the business cannot sustain if the business model is not profitable. In fact, you can focus on the main product and revenue generating offshoots to keep the funds flowing into the main product till it can itself grow to be fully self-sustainable. Allow for essential costs such as logistics, consumables. In an On-Demand Startup, cost of logistics is a very big component so plan to have a decent margin from the GMV to take care of your pickup or deliveries. Remember to include additional backend manpower costs in your unit matrix.
- Identify Referral Potential
This means knowing how well your concept can grow on it’s own, without your startup having to pay to get the customers or users. This will give you an idea of the timeframe that you can bank on before becoming profitable or the point from where you need to start investing heavily to make your customer base.
Similarly, it is helpful if you know how easy it is for people to adopt your solution. Old habits die hard, and human nature rejects change, even if your solution is very effective. In fact, making it easy to get users onboard will help your current customers to refer your product/service to others, thereby introducing new users without expensive marketing costs from your end.
- Supply Demand Balancing
Gauge the market demand for your product/service and see how effectively you can balance it with your supply. Ideally, a demand for your product/ service should already exist rather than you having to lose sleep over creating demand, where it does not exist, so you don’t have to worry about the traction.
- Removing Friction Points
No detail is small enough to be ignored. Meticulous micro planning and elimination of each step, which involves hassle, can be eliminated to make the entire process smoother resulting in higher chances of success. Remember – every drop counts!
Whilst no one can guarantee success unless you have tested the waters, being prepared is your best ammunition against surprises later. Keep the above-mentioned points in mind and go forward with complete conviction, well supported with solid data that can help you achieve success as an entrepreneur.
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