Being an entrepreneur is not really a decision, it is who you are. You can’t help yourself.
However, if you are going to launch a totally new business model or an innovative product and service, you need to know one basic thing: is there a market for your product?
Is there a real need for what you want to develop? Is there anyone to buy it?
It is imperative you take this preliminary step: you do not want to start investing time and money into a business idea that never takes off.
Recent business history – my own included – is dotted with countless failed start-ups whose owners did not try to validate their business idea before putting their life savings on the line.
So, how do you validate your business idea before you start pumping money into it? Here are four effective ways:
1. Can It Survive the Devil’s Advocate?
You are enamoured with your business idea, and that is normal. It just came to you, you believe it is brilliant, it will solve lots of problems for many people and make you a billionaire. Good, but can your idea stand up to the test? You need to find a few very close and honest friends, who are willing to tear your idea to pieces, put it through the harshest scrutiny and find each and every fault with it.
What you have to do is find valid arguments, backed by facts and numbers, which support your idea and invalidate each criticism. Do you have these data and numbers? Do you know exactly how your business will be faring one year from now, where you will find your first customer and when you expect to sell to the 100th customer? If your idea can pass this basic test, you can move on to the next practical question.
2. Do You Have A Hungry Market?
In theory, there are people who need your product, but how many are there actually? Is it a sustainable market? Does your product satisfy a one-time need or a recurring one? If you want to find out in cold numbers, a good solution is going to Amazon, and then to Facebook Ads. Here is how these two platforms will help you:
Amazon Best Sellers will show you if there is an established niche for your product. You will see how much competition you will have to face and you can also estimate how many customers you may attract from the ranks of the competitors’ unhappy clients.
Facebook Ads helps you select and refine the target group before you launch an ad campaign. You do not have to commit to pay anything simply by defining a target group. So, start looking for your ideal customers by location, sex, age, interests, etc. What is the estimated targeted group you obtained? In the range of thousands, tens of thousands? Or less?
3. Create a Mock-Up and Get Feedback
Also known as the Lean Startup method. Let your family, friends, neighbour, postman and cleaner look at a mock-up of your product and ask them if they know what it does and whether they would use it. This is your first (free) focus group, with various degrees of honesty (of course, your mum and dad will love your product, even if they do not know exactly how to use it). If at first look, people have no idea what to do with your product, you should rethink it from scratch.
Try to Get at Least One Hundred Enquiries
Moving away from family and friends, try to test the real market with a short ad on Craigslist or another classified ads platform. You do not need to have products for sale at this point, you are just looking to measure response.
Give a detailed description of your intended product and wait for the responses. Do you get at least one hundred emails enquiring about the product? If yes, you may have a market to start with.
Of course, these ideas will simply validate the fact that you have a potential niche of people who need your product. Whether it actually rises to their expectations and you market it to them properly, this is a completely different aspect.