You’ve had an idea. It’s your eureka moment. Just like Archimedes, you want to run naked through the streets to tell everyone about it. Well, maybe not, but you are certainly very excited and feel adamant that the world needs what you’re about to give it. Stop! While we don’t want to be like that friend who pours cold water over just about EVERY idea you have, we do want to ask you a simple question: Have you validated your amazing, world-changing idea? If not, it’s time to put your clothes on and hatch a plan.
Why is it important to validate a new business idea?
Of course, the simple answer is to avoid wasting valuable time and money.
According to Business 4 Beginners, 1 in 5 new businesses fail in the UK each year. Let’s look at a few statistics from market insights company, CB Insights, that explain why startups fail:
• 35% have no market need
• 19% have a flawed business model
• 10% mistime a product
• 8% have a poor product
Validating your business idea will help you avoid being one of these unfortunate statistics.
How to validate your business idea
Be clear on your goals and assumptions
Asking yourself questions about your business idea will help to focus the mind on whether your goals and assumptions are realistic. These questions will help:
• What is the value of my product or service to its potential users?
• Who are those users, and what have I assumed about them that makes me so sure they need my new idea?
• How is my new product or service better than anything already available?
• How much can I expect users to pay for my product, and how often will they need to buy it?
Research similar products
Find out how unique your eureka moment really is. If there are similar products on the market or services available, ask yourself how yours will be different enough to outplay the competition. In some ways, it’s good to find similar products or services because that tells you there is a demand. Then it comes down to how hard you want to compete.
Conduct market research amongst your target audience
Whether you do it officially through market research agencies or you approach people who you know to be in your target market directly, you need to find out if there is a requirement for your product. Ask for honest feedback and, most importantly, listen carefully to what you are told.
Another way to do this is to research keywords and phrases to determine what people are searching for online.
What is your market size and your potential share of that market?
Without understanding the potential of your market, you’re making huge decisions with very little substance.
• Research sales of similar products and services
• Find out many companies are in the same field and could be true competitors
• Assess how much of the market share you can realistically expect to achieve by determining where and how your product can gain traction.
You should test your product or service on real users. While there may be a market for your new idea, if it doesn’t perform as it should, it will never be successful. You will learn a lot from testing, but it needs to be done extensively across a range of users and conditions for you to learn from the process.
Get in touch with Code Galaxy
Code Galaxy is a software and app development agency based in Lancashire. If you have a software idea you’re thinking of launching, get in touch, and we will help answer any questions you have.