Before you go on with the execution of your startup Idea, you will need to test your idea with the market. This is what we refer to as market viability.
As a startup, doing a market viability analysis will help you determine whether starting a business in that particular market makes business sense or not.
It gives you a better understanding of the target market and what it precisely requires and if your product falls into the same category or not.
Validating your startup idea at the earliest opportunity is extremely important so that you don’t waste time and money building what no one is willing to pay for.
Factors to Consider When You Want to Validate Your Startup Idea.
- Market Size Of The Idea: Is the market large enough to accommodate new sellers?
Determining the size of your target market and how much of it you could potentially capture can help validate it with minimal upfront investment.
To do this, you will need to get access to industry statistics and market reports within your target sector.
- Target Audience Of The Idea: Do potential customers have a discretionary income? Can they afford to buy your product?
The most direct approach to market validation is to interview your target customers.
This involves figuring out where they often are and engaging with them there.
This could mean talking to people on social media, joining conversations on private forums, or even advertising publicly for initial focus group volunteers.
Once you’ve located your audience, you’ll need to ask them about their experience with the problems you aim to solve.
If you discover they’re interested in the things your conceptualized product can do, then you should be able to move forward with its development.
- Test your concept: Long before endeavoring to create your product, you can determine if it will sell and for how much.
All you need to do is market the concept itself as though it were a finished product. This approach involves building out a complete brand identity and visual representation of your product.
Once you’ve done both of these things, you can use your new promotional materials on a small, simple landing page or ecommerce website built for this purpose, and funnel traffic to it using paid advertising.
The amount of interest you generate will ultimately inform your decision on whether or not to develop your product.
Although your simple landing page should allow visitors to place orders, payments are not meant to be processed at this stage.
Your product does not exist yet.
Instead of fulfilling orders as they’re placed, you should analyze them to gauge how much interest already exists among consumers for what you intend to create and offer.
Once your experiment is over, you should be able to tell how much momentum your proposed product is capable of generating.
At this point, you can shut down your temporary sales site and lean into product development.
Know the Competitors For Your Startup Idea
- Competition: Who are the most important retailers in this market?
What are their strengths and weaknesses? How can you compete with them? Do a little recon to see if you’ve got any competition.
Is someone in the market selling the same solution you’re gunning for?
Is there something they’re doing that you could do better?
Competition research is looking at what you’re going to offer and how it compares to similar products or services on the market.
What are the features, prices, and benefits of your product, and how do they compare to your competitor’s?
Making a simple comparison chart that outlines these points is a great way to go about it. The Bottom Line is whatever your competitors are doing; figure out a way to do it better.
- Test with a minimum viable product: Conducting actual tests of your product before it makes into customer hands or even enters development can help you fine-tune its unique selling point.
However, you can also accomplish this after your product has come out of a short development cycle.
Minimum viable products are designed for this purpose. By developing and deploying a minimum viable product, you can actually get your product to market quickly without investing heavily in the design and creation processes too soon.
A minimum viable product will either succeed or fail after launch, absorbing valuable feedback either way.
You can then use this feedback to build a better offering for your ideal customers. This may mean adopting an iterative approach and releasing a new version of the same product every time feedback inspires you to do so.
However, it could also mean ditching your current approach and product altogether to focus on something better.
In conclusion, all of these steps are really about optimization. Find weaknesses in your product, approach, attitude and partnerships, and strengthen them.
Don’t let disappointing research stop you from pursuing your vision or dream! Just be deliberate. Be informed.
Your goal is to weed out markets that are too small, too competitive or made up of customers that can’t or won’t pay your prices.
At the end of the day, you can break all of this info down to a relatively short checklist.
The point is to roll up your sleeves and do your homework before investing tons of time and passion into a nonviable business idea.