How to validate your idea for a startup

Market validation is the process of establishing whether or not your product is needed in your target market. Validating your business concept allows you to forecast if people will buy your product or service and whether your company will be lucrative.

It’s critical to verify your idea early on in the entrepreneurial process to avoid wasting time and money developing a product that isn’t a suitable match. In addition, obtaining market validation may help create trust in investors, crowd funders, and banks that are contemplating investing in your firm.

By validating your company concept, you may better know how your product meets or does not satisfy the pain points of your target clients. In addition, the insights you get can assist you in developing a product that not only meets the demands of your market group and wins you your first paying clients.

Note your Goals and business possibilities

The first stage in market validation is to write out your company’s goals. The act of defining your vision may shed light on any assumptions you may have and give a final destination.

Ask yourself:  

• What is the worth of my product?
• What assumptions have I made about the intended audience?
• What distinguishes my product from the competition?
• What are my hypotheses about my product, price, and business model?

Answering these questions can assist you in communicating the value and distinctive features of your product and illuminate assumptions and hypotheses that have yet to be validated and proven.                                                                                                                                                                                   

2. Determine the size of your target market 

Estimate the size of your target market and the percentage of it you may potentially acquire before proceeding with your company. This lets you assess the potential of your company and justify its launch.

Harvard Business School Professor William Sahlman uses the mattress company, Casper, to explain this principle in his book Entrepreneurship Essentials. Casper’s creators analyzed the market size for their product in 2014 by comparing its distinctive qualities to the bigger market. Casper’s outstanding elements included its online business approach, a 100-day return option, and the viscoelastic foam substance utilized in its mattresses.

Casper’s founders narrowed which segments they should target based on mattress market statistics at the time—including units sold per year, the percentage of the market owned by foam mattresses, and the number of mattress retailers that were e-commerce brands—and determined they could hold a few percentage points of the total mattress market share.

Carry out this exercise for your intended market. Investigate sales statistics, the number and share of present manufacturers, and the proportion of your segment’s overall market for items similar to yours. Determine where your product fits in the market and how much of it your company can possess.

3. Have your research in place

Researching the monthly search volume of phrases connected to your product or goal is another technique to assess the market viability of your company concept. When customers want a product or service, they frequently utilize a search engine to examine what the market offers.

You can look into monthly search volumes using various services, including Moz. In the instance of Casper, a similar search word may be “foam mattress.” According to Moz, the phrase receives over 11,500 monthly searches, demonstrating a demand for the product.

If there isn’t a lot of search volume for your goods, utilize phrases that reflect buyer intent. For example, if you design a mattress out of a new, more supporting material, you may research how many individuals search for the “best mattress for lower back pain patients.” According to Moz statistics, the question generates 240 monthly searches.

This kind of search traffic for a lengthier, more precise question isn’t insignificant. In fact, it may be utilized to support your premise that your product is needed.

4. Take a customer-centric approach

Conducting interviews with your target market group might be an efficient technique to learn about the potential of your product. Hiring a market research firm to work in focus groups, sending out an online poll, or just asking a discussion with someone might all be part of this project.

Inquire with potential consumers about their motives, preferences, wants, and the items they now use. Then, return to the list you generated in the first phase of the market validation process, and phrase any assumptions or hypotheses you made into questions for your interviews. Be open to comments and keep a note of it for future reference.

If the feedback indicates that your product lacks market validity, you may utilize it to improve your offering and repeat the market validation process.

5. Do thorough testing of your product and services

Once you’ve discovered that there is a demand for your product, make sure you’re releasing the most helpful, intuitive version of it to the public. This may be accomplished through alpha and beta testing.

• Internal staff test a product in a staged setting during alpha testing. Alpha testing aims to eradicate any flaws, faults, or quirks in the product before making it available to the general public.
• When a product is a beta tested, it is tested by a small number of genuine, external consumers who are specially instructed to discover faults. In the case of software or an app, beta testing may be accessible to the public with a notification informing users that the version they are testing is incomplete. 

Testing your product with real consumers may be crucial when determining market viability. Customers may choose a competitor’s solution if there is a market demand but your product is unreliable, complicated, or difficult to use. The insights you receive from beta testers might help you better utilise and satisfy client demands.