In this phase, you have crystalized your idea. You are on the way to offer a solution to a pain point for businesses (b2b) or consumers (b2c). We should not forget that you are still in the
Pre-Seed Stage; fundamental for analyzing and validating your business hypotheses.
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What is market validation?
Market validation is the process of determining whether your product is of interest to a given demographic. Market validation involves a series of interviews with potential customers in your target market, and it almost always happens before you have spent money on your product concept.
The problem: most startup ideas are not validated
The average person has a great idea for a business about once a month. The problem is, most of these ideas are not validated. This means that the person does not take the time to see if there is a real need or market for their product or service.
Without validation, these businesses are likely to fail. In fact, according to
CB Insights, 42% of startups fail because there was no market need for their product. This is why it's so important to validate your idea before you start your business.
There are many ways to validate your idea, but one of the most important is customer feedback. Talk to potential customers and get their thoughts on your product or service.
The solution: how to validate your startup idea
If you're looking to validate your startup idea, there are a few key things you can do to ensure you're on the right track.
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1. Vision – jot down the purpose of your business and hypotheses should appear along the way. You should be looking for the value of what you are about to offer
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2. Assess - it's important to
assess whether there is a need for your product or service in the market. This can be done by
conducting market research and speaking with potential customers to get feedback on your concept.
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3. Competitors- it's helpful to look at your competition and see what they're doing well and where they could improve. By understanding the landscape of your industry, you can better position your startup for success.
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4. Plan - it's critical to have a solid business plan in place that outlines your goals and how you intend to achieve them.
By taking these steps, you can validate your startup idea and set yourself up for success.
Here are some effective ways to validate the market in which you intend to offer your startup product:
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1. Utilize interviews with customers
Determine the attributes of your ideal customer, find where your target customers can be found, interview them in a way that reduces bias [is this a real problem? And is there a real demand for my offered solution?], and finally verify the interest in your offering.
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2. Know the search volume of your keyword
There is a plenty of SEO tools out there that can help you with determining the search volume of your keyword (key phrase). The Keyword Planner from Google Adwords and Moz have free versions to provide you with the current search volume of specific keywords. This can be a good indicator to launch a viable business.
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3. Start a crowdfunding campaign for your business idea
RocketHub and Kickstarter are good places to successfully raise funds for your idea. In order to raise fund effectively, plan for a quarter to half year of hard labor, and be attentive to ingredients of a profitable crowdfunding campaign. [see our article on crowdfunding campaign]
Check ITIDA's
Innovation Industry 2.0, developed to create and empower innovation culture inside Egyptian small, and micro companies.
Case study: an example of a validated startup idea
In the early stages of startup formation, it's critical to validate your idea. This means testing whether there is a real market demand for what you want to offer. Too many startups fail because they build something that nobody wants or needs.
One way to validate your startup idea is through a case study. This involves researching a similar product or service that's already out there and seeing how well it's doing in the market. If there's a strong demand for the existing product, chances are good that there's also demand for your proposed offering.
To help you validate your startup idea, we've put together a case study of one successful example. This should give you the confidence you need to move forward with your own venture.
Check
Unicorn Nest's example for validating a business idea in
here
The benefits of validation: why bother?
When starting a business, it's important to validate your product or service in the marketplace. This means testing your idea with potential customers to see if there's a need or want for what you're offering. There are many benefits to validation, including helping you focus your efforts, saving time and money, and reducing risk.
Validation helps you focus your efforts by giving you feedback on what potential customers actually want or need. This feedback can help you determine whether to pivot or persevere with your original idea. It can also help you refine your offering so that it's more likely to be successful in the market.
Validating your product or service can save you time and money by helping you avoid building something that no one wants.
Conclusion
In conclusion,
market validation is an essential step for any new entrepreneur. By taking the time to validate your startup idea, you can increase your chances of success and avoid costly mistakes. There are a number of resources available to help you validate your idea, so don't hesitate to seek out help if you need it. With a little effort, you can make sure your startup is built on a solid foundation.
