Five Tips For Startup Idea Validation

Every entrepreneur who has built a startup and struggled to build traction from users, get paid customers or sales deal cracked, has mostly struggled because they did not validate the idea well and right.

Founders struggle to validate the idea the right way and thus end up struggling in execution.

Almost everyone who wants to build a startup starts with an idea of something that he believes in as right to pursue and something that will do really well. But yet, most of the founders struggle to take off the startup off the blocks.

Ideas are plenty. Everywhere you look, you will notice so many fantastic "ideas" but yet they go nowhere or die out faster than imagined. Why do so many people who have "Great Idea" struggle so much? What is that they miss that some get right?

The answer may be very complicated and perhaps no one has found it. But, however, one of the fundamental things that founders need to do first before jumping in with all might, is to validate if the idea truly has the potential to become a viable startup.

I recently had the pleasure to visit Headstart as Mentor and bounce off my thoughts on this topic. Here are my views on validation of a startup idea the right way.

What should be validated as part of idea validation

1). Is the problem that you are solving indeed faced by large enough group of people. How much is a gap in   your assumption about the problem and real-world need of this by a large enough people?

2). Is there the genuine need for the solution that you are providing? Would someone adopt your solution    (even for free?)

3). Are these set of people ready to use your solution?

4). How much would they be willing, if at all, to pay for such a solution?

What should not be part of the idea validation

• Do not focus on the following as part to validate your idea.
• Features that users want or need
• UI/UX of the product
• Funnel optimization
• Product engagement, retention of users etc
• Validating how big the market is (Build things that don't scale)

Here are key things to understand before jumping into the deep sea of idea validation.

Users are not same as customers. Focus on customers who "will" pay $s for using your service. You parents, girlfriend, boyfriend, neighbors, dog and cat are not your real users. do not take the feedback from them as validation.

Real Customers are the ones who pay $s for using your product or service

There are many founders who extrapolate inputs from some folks as validation of their views. You need to really talk to the customer to understand their viewpoint. Do not start with what you think or know or what solution you are offering. Start with trying to understand the customer by listening to him/her, asking questions about what they do, why they do certain things. Try to understand the problems by actively listening to issues that they say indirectly. A lot of times, customers don't know the real problem but only a symptom. Do not ask the customer what they think is the solution. Ask questions to understand their problem well.

So, what should a founder do? I suggest that you take following the FIVE-step process.

#1. Identify who is the "right customer" for your idea => Can't find enough people who have the problem that  you are solving, DROP the idea right away or pivot to what problem is understood during this process.

#2. Interact with him in person to understand his views (not about what you think is a solution). The insights  from this will really open your eyes and clarify various assumptions that you may have made. Try to  actively listen to get clues on various aspects such as how important is the problem, how is that being  addressed currently and how much improvement the solution can bring to the user. Would they, and if yes  who would be paying for a solution to the problem.

#3. Build a dirty, but bare minimum functional MVP (minimum viable Product)

#4. Perform the real test to onboard user, show him your solution and ask him to purchase at the price that  you derive from the earlier interaction

#5. Build multiple such tests (different landing pages, different pricing points to different user groups etc)

Here are some practical suggestions from my entrepreneurial journey for this further:

• It is easy to get an attractive landing page done without much effort. try bootstrap templates, WordPress free templates etc
• Landing Page with a clear CTA is a must to articulate right with clear action.
• Explore non-paid means to reach customers (BetaList, Reddit, Facebook Groups, LI Groups, Entrepreneur community etc)
• Run simple Google/FB/LI ( as per where the users would be found easily) campaigns to acquire users with a hypothesis and landing page
• Learn the user funnel => improvise, try different landing pages, campaigns, positioning etc
• Experiment with different pricing options to understand the cost of acquisition, cost of operations and unit economics etc
• Remember that Validation is an iterative process
• Find influencers in the field and talk to them, sell them the idea. If they think it is worth, give it a shot else iterate and find something that makes sense to an expert in the domain or field 

A Quick note on B2B Idea Validation

> B2B sales cycles are often longer than you expect. It takes longer to meet the right person, it takes even  longer to meet the decision maker. So you may as well just start with a deck and landing page (which is  what I have "successfully done" multiple times)

B2B sales cycles are often longer than you expect

> It is very important to know who is the decision maker and how fast you can get to him. What are the    KRAs for him to tailor your pitch to him accordingly?

Identify the decision maker quickly and find the shortest path to him

> Different customers have different requirements. Typically, the large players keep throwing the big list of  requirements at you and want to get things done for free as much as possible.

Suno Sabki, Karo Apani

> Someone senior liking your product or scheduling follow up meeting doesn't mean that they will pay. No payment should be assumed until purchase invoice is done.

Intent to purchase is not same as purchase

Look forward to hearing your views and suggestions with me!

Article Originally Published On: https://goo.gl/Ucqyfc