Not every idea is well received by its market.
As an entrepreneur, you’ve probably already envisioned your product or service. You’re likely to know the exact vibe your food truck will have or the first design of your t-shirt line. What you may not know is how well this vision will reach the market or how much of your idea you’ll be able to monetize.
noun val·i·da·tion ˌva-lə-ˈdā-shən
the determination of the degree of validity of a measuring device
Validation is a key to your success.
Defining the problem.
Your business idea probably came from you seeing a problem to solve, something to do differently, or something missing in the marketplace. To build on your own perspective, ask yourself: “Is this issue just affecting me, or does it affect lots of other people?” Put on the hat of your target audience to understand their pain points. If you think there is a sizable market that would be as excited as you to see your problem solved, you may indeed have a new business opportunity. For now, this is your hypothesis.
Test your hypothesized problem and its recurrence in your market. Speak to your target market and either validate or eliminate your guess at their pain points. Create a list of questions (avoiding the easy-to-approach “yes” or “no” questions) that delve into the lives of your future customers. Then, find the market — and we mean literally, physically go find the market. If you are addressing a pain point of college students, go to a university. Or if you’re addressing a lack of caffeine in your neighborhood, interview the community about their coffee interests. Undertake the arduous task of having personal, individual conversations. Most importantly, take notes.
If you find that your hypothesis is correct, you are in luck and can move forward. If you find that your hypothesis is incorrect, return to the drawing board, develop a new hypothesis, and repeat the process.
When you’ve found the right pain point to address in your market, you can finally move forward with your business idea. Use this understanding to return to your original idea for your business and ask: “Does this address the problems I learned about?” Here, you’re looking to have the core value proposition directly address the pain point.
If not, pivot. You may need to scrap your idea entirely, or you may need to tweak your idea just slightly to deliver this core value proposition.
Use this stage to also think critically about monetization. You may be addressing a major problem that can be easily monetized — or not. Examine each value-creating aspect of your product or service, and decide how to charge your customers for it.
Market validation. Again.
You’ve spoken to your audience about their pains, now it’s time to speak about their gains. Returning to your market, notepad in hand, gather data and testimonials about interest in your product and willingness to pay. If you can provide a prototype of your product or service, begin testing customers’ reactions to this as well.
Validation will put your company on a path towards success. Testing your ideas directly with your market will lead to a product or service that is relevant.
Where should you go from this process? Iterate.
noun it·er·a·tion ˌi-tə-ˈrā-shən
a procedure in which repetition of a sequence of operations yields results successively closer to
a desired result
Already in this process, it’s likely you will need to iterate, or repeat and upgrade, your understanding of the problem you address or the value proposition you offer. Moving forward into the launch of your company and beyond, constant development based on customers’ reactions will help you’re executing on a great, marketable idea and not just a good idea in your own head.