New online business or product? How to validate your idea

Are you an entrepreneur or small/medium sized business owner? Are you looking for help in either starting up your own online business, or launching a new product on a tight budget? There is such a thirst for knowledge on how to kick-start the process of building your online presence and it can be hard to know what to actually do. There are a few easy ways to tell if you have the passion to commit your resources to your idea: Ways to think about the problem you are solving, connect with your customer base, consider the market, and validate those initial assumptions, while remaining customer, as well as product, focused.  

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1. Why do you want it?

Why do you want to start an online business, or launch a product? Are you fully invested in dedicating time to solving this problem?

In my experience, you must be willing to commit the next 3-5 years on your product or business idea. Many years ago, I experimented with starting an online business in the careers market. I had set up a website, invested in an SEO strategy, and got business cards printed up. Although I was making traction and had paying customers on board, I couldn’t see myself working on it in the long-run, so I decided to shelve the idea for the time being.

2. Define your problem

What problem are you going to solve? Do you have this problem? How much does this problem cost customers? Think about the problem you are solving when starting a business/creating your product.

There’s no such thing as a bad idea. Lean startup guru, Steve Blank, says that this part of business development is very hit and miss. “We wanted to fail fast and often”.

3. Customer Discovery

Understand your potential customers. How are they solving this problem now?

The best way to understand  your customers is to put yourself in their shoes. In my experience, creating some user personas can be helpful. Your persona can include the following:

• Profile Picture
• Pain Points
• Goals
• Motivations
• Comfort with Technology
• Biography (related to your idea)

In my experience, personas are revised multiple times. If you’re working in a team, or have access to stakeholders with domain knowledge, ask them to look over it and get some feedback.

4. Consider the Market

What is the size of your market? Who are the influencers and leaders?

Investigate the market and see what you’re up against. This is another good reality check. For example, if you want to create a social network, do you think you could compete with juggernauts such as Facebook and Twitter? Or you might want to create the next ‘WhatsApp’- what will be your point of difference?

5. Customer Validation

Once you have your idea, and you’ve considered your customer and the market, it’s time to test your idea.

Create a landing page with an e-form to capture leads. Once you launch your site, set up an ad campaign to direct traffic to your site. Get in touch with these customers, and ask them some open questions to validate your assumptions and gauge their interest.

Note that all landing pages are not created equal. If you’re not getting any leads it may be that you haven’t given your audience a good enough reason to get in touch with you, or give their details. This is where some value added offer can help, or some other type of free resource. For example, you may offer the chance to go in the running to win a relevant prize. In my experience, competitions also work well for events and workshops.

You may want to engage the services of a designer who understands conversion optimisation and can help you set up a responsive site to capture these leads.

6. Customer Creation & Branding

Once you’ve validated your assumptions and are ready to start building your product or business, it’s important to manage customer acquisition and development. It’s common for entrepreneurs to be too product focused and lose touch with customers.

You can only speculate about your idea until you have the data and metrics to back it up! Constantly ask your audience for feedback, test your prototypes and update your backlog of features and functionality based on what customers are telling you.

Steve Blank says “What matters is having forward momentum and a tight fact-based data/metrics feedback loop to help you quickly recognise and reverse any incorrect decisions. That’s why startups are agile”.

Focus on testing ideas and revising them on a regular basis. A user centred approach must be maintained throughout the project.

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      In the startup world there are countless hits and misses. The skills and experience you bring to your project in the areas of programming, business and design will shape the extent of your businesses success. The framework above should be a good starting point, regardless of your background, to taking on your entrepreneurial challenge. It pays to fail often, test regularly, be user-centred, and keep an eye on the market landscape. But also to have a realistic view of the limited resources available, and to evaluate not only if a business model is viable, but also if you have the passion and tenacity to follow through with it.