How to validate your business idea?

Discussion in 'General Business' started by the ceo, Apr 9, 2019.

  1. the ceo

    the ceo Member

    From a product or service idea to a company, there is a long and winding road. To run it better, market validation is a process that can help you.
    Even the biggest company started with just one idea, barely a spark. That moment of inspiration in which there was nothing, more than an assumption or an expression of enthusiasm, is at the origin of all business.
    For this seed to germinate in a successful company, you need to travel a path that not everyone is willing to undertake. It implies realizing that, however great an idea may seem, it takes more than that to start a business.
    The validation of an idea is one of the critical processes in this path. It consists of checking, from an objective point of view, whether the actual demand for the product or service is sufficient to sustain a company.
    There are as many validation models as there are businesses. However, the basic part consists of doing it by means of three simple questions:
    • Will people buy what I'm selling?
    • What is the maximum price that they will pay for what I sell?
    • Will enough people buy it, as to sustain the business?
    1. Create a prototype
    It is advised that the first step to validate your business idea is to create a basic prototype. The model you make should help you prove that the idea of your business is valid. That is, you must convey to the user the idea of the product or service you want to offer.
    Ideally, you perform several tests with different users. Do not be afraid to try different audiences: in fact, the more variety there is in your audiences, the better. Thus, your opinions will allow you to improve your product or service.
    Remember: you are trying to answer if people will buy what you sell, what will be the maximum price they will pay and if there is enough demand.
    2. Form an initial fan base
    This step is to create an audience before you officially start selling your product. So, validate the market so that other consumers feel confident buying with you. And to form this audience, you can use social networks and your own friendships.
    3. Finally, will people buy my product or service?
    After the first customers have already paid you, there is an expectation of service and performance of your product. Ask for their opinion, observe the demand that begins to be in your business. Only then can you answer your three initial questions and validate your market.
    Get to work with your business
    There is no greater validation than having a customer returning to buy you. So at this point, you can now move on to the operational, legal and financial aspects: open your bank account, legally establish your company, find partners, form a team ...
    Although these processes are the most tiring, they are worthwhile when they are carried out on a business idea that has already been validated and that, therefore, has a better chance of surviving.
    Charles T likes this.
  2. Charles T

    Charles T Administrator

    @the ceo very worthwhile post!

    The step of "checking, from an objective point of view, whether the actual demand for the product or service is sufficient to sustain a company" can oft be overlooked in one's hurry to get the bones of the business set up. After all, one wouldn't have such confidence to start a business if one didn't already feel at least somewhat validated in their pursuit already.

    Thanks for drawing attention to this crucial step of validation.
  3. the ceo

    the ceo Member

    thank you for your suggestions too
    Charles T likes this.

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