A Complete Guide to Idea Validation

Startups that last aren’t built on good ideas.

They’re built on successful ones.

What’s the difference? A process known as idea validation, in which you test and refine your idea to give it the staying power that will sustain your business.

If you want to succeed in the competitive meritocracy of the startup world, keep reading. We’ll guide you through the complete idea validation process to give you the lean business edge your startup needs.

What is Idea Validation?

Idea validation is the process of panning through your ideas to find the gold nuggets.

It consists of testing, researching, and fine-tuning your idea before launching your business. Validation is the research and development stage of your idea. It’s the strict but necessary yardstick that separates the good ideas from the bad and strengthens the good ideas into watertight business plans.

Why Do I Need to Validate My Idea?

First, you might have a bad idea on your hands. Taking the time to validate it will show you whether your idea is worth investing in.

For instance, the idea behind Google Glass doubtless looked phenomenal on paper. Yet the 2014 release disappointed customers with low functionality, practical issues, and lack of specificity in its purpose. A brilliant-sounding idea can still fail on the market.

The second reason you need to validate your idea: if have a good idea that you implement badly, it’ll still fail.

Superstar successes like Amazon, Google, and Quora all had progenitors. WebVan foreshadowed Amazon’s buy-anything delivery system, and AskJeeves pioneered query-based web searches. When those businesses failed, their ideas remained, and eventually, others took them up and ran with them.

The lesson here? If you don’t take the time to validate your idea and put it through its paces before it hits the market, someone else will learn from your mistakes.

Ironing the wrinkles out of your idea before you launch gives you the best possible chance at succeeding the first time.

1. Put Your Customer First

Successful entrepreneurs from Dragons Den victor Rajen Ruparell to Apple saviour Steve Jobs have the same primary piece of advice:

Think about your customer first.

How will your idea impact them? What will make their experience of your product easy, beneficial, and buy-it-again-able?

Test your idea from the perspective of consumer experience with the following questions.

What Problem Does it Solve?

The answer to this question might be less self-evident than you think. To return to the Google Glass example, Google may have designed a dazzlingly futuristic product. But did it actually answer any specific need in the average person’s life?

The fact that you’ve likely never seen someone wearing the product is enough of an answer. Without a raison d’etre, the product just can’t stay alive.

Whether you’re developing an app, designing a new Facebook feature, or planning to launch a Hungarian cuisine food truck, you need a need. If you can’t name the need your product fills, you’ll have to pivot your idea until you find the problem it can solve.

What Problems Does it Create?

In the international development community, there is an oft-repeated story that has reached mythic status. A well-meaning organization visited an underprivileged community in an unfamiliar country. Noticing that the women of the village had to walk far out of town to draw water from a distant well, the organization used their hard-fundraised money to dig a new well in the centre of town.

However, after the developers finished their project and left the village, the new well fell into disrepair. No one used it. The women continued to walk to the distant well to draw their water.

Why did the developers’ time and money go to waste? They hadn’t taken the time to realize that the women liked the long walk to draw water together. It was a refreshing social time that they valued.

This story might be true or apocryphal. Either way, it’s a warning against hasty problem-solving.

If your product or service creates more issues than it solves, you’ll fall victim to the fallacy of Chesterton’s fence. Your supposed solution will become a problem in itself.

In real terms, it means your customers will get frustrated and stop buying your product. Minimize unintended consequences before you launch your product.

What Are Your Assumptions?

Every idea is built on assumptions. When you’re validating a marketable idea, testing out your assumptions is crucial, because they could prove to be the weak point of your entire business plan.

The assumption “people want to connect with others” has driven every social media iteration since SixDegrees (back in 1997). Airbnb took a risk on the assumption “people will be willing to have strangers stay in their houses,” but it paid off.

Listing your assumptions is a systematic way to get inside your customer’s head. Break your idea down into its core assumptions so that you can measure them against reality. Ask “why?” in as many ways and from as many angles as possible until you get to your idea’s assumptions.

How Can You Get Feedback?

Idea validation is all about getting feedback. That way, your idea is fine-tuned before it hits supermarket shelves or the app store.

Since the value of feedback is figuring out where you’re wrong, it’s a necessarily uncomfortable experience. You’ll need to be bold in asking for feedback and resilient to criticism. You’ll also have to get creative in how to source your low-cost market research.

Start by pitching your idea in-person to a few trusted industry contacts. Once your idea has started to shape up, send a basic email questionnaire to a few more. These home-grown market research strategies will yield a few shreds of wisdom that you can use to hone your idea and help it advance to a more professional level.

Don’t forget to capitalize on online communities like Facebook, Reddit, and other social media. Discover the subcultures that constitute your target audience. Ask about their experiences with the problem you’re trying to solve, and you’re sure to get a deluge of replies.

Weed through the naysayers (“It’ll never work”) and discover your greatest blessing, the critics (“That won’t work because …”). The former never have a good word to say; the latter have the uncomfortable words of insight that you need to hear.

2. Get Onto the Market, and Stay There

In idea validation, your consumers are your first priority. The market is a strong second. Once you’ve made sure your idea resonates with the customers you want to reach, turn your attention to the market and find out if there’s a place for you in it.

Where’s My Gap in the Market?

Most likely it’s hiding in plain sight. Great ideas are the ones that propose a solution to a problem that no one else notices.

The startup Endy made Dragons’ Den history when it accepted a million-dollar deal, then the biggest deal ever made on the Canadian show. They didn’t have an Edison-inventing-the-lightbulb brilliant idea. They simply put their finger on a market gap that others missed: selling high-quality mattresses online.

What do you do if your blindingly brilliant idea doesn’t seem to match up to a market gap? Think smaller. Find your niche — likely, that’s where your market gap is hiding in plain sight, waiting for you to sneak through.

What if My Solution Works?

Many entrepreneurs don’t think past the moment they make their first big sale. But your company’s success depends on good ideas can fail unless you look farther into the future.

How large can you scale your company? How will your business model adapt to growth? What can change, and what can’t?

Scalability is one reason that successful ideas are simple ones. The more complex the idea, the more horizons for confusion and conflict when you implement it, and especially if you need to scale it larger than your launch size.

3. Validate, Launch, Repeat

Idea validation doesn’t end when your business launches. You can continually seek and elicit feedback about the idea that underlies your startup. Here’s how to make idea validation a core part of your business.

What’s Your “Cupcake”?

We’re not talking about launching a baked goods shop. We’re talking about the classic startup advice to start small so that you can get feedback on a little taste of your project before launching your grand investment.

Using the metaphor of a wedding cake, Peter Merholz compares two approaches. The first is to focus on perfecting each aspect of the wedding cake — icing, filling, and cake — and, as a result, not getting any feedback until the entire project is complete. If something’s wrong, you won’t know until the end, when you’ve invested too much to make big changes.

The other method prioritizes feedback and validation. Start by baking a cupcake instead of the whole project, then get feedback. Tweak your ideas in response to your feedback, and repeat.

Quick, low-cost, high-return feedback underlies the business buzzword “lean market validation.” Save time, resources, and emotional investment by validating the tiny version before putting out your full-scale investment.

Your “cupcake” is a bite-sized version of your idea that you can test prior to your fully prepared, elaborately-iced launch.

When Should You Stop Validating Your Idea?

The best time to stop validating your idea is never.

In the late 90s, commentators condemned Apple Computer as “silicon valley’s paragon of dysfunctional management.” With sales and stocks tumbling, new CEO Steve Jobs looked in an unexpected direction: the product lineup.

Although the company had been founded over twenty years earlier, it needed to revisit the idea that it was built upon. Jobs ruthlessly reduced the product lineup to four main devices: a desktop and a portable computer, each developed for personal and professional use.

Given that there’s a 44% chance you’re reading this on an Apple smartphone, the lesson is clear: in a successful business, idea validation is never finished. You can effectively re-think your idea even decades after your startup launch.

While every startup has to balance its new administrative, branding, and managerial work with the product idea that started it all, don’t get bogged down in being a business so much that you stop thinking critically about your idea.

4. What About Compliance?

You’ve got a great idea, and it looks like it’ll play well on the market. But even if you’re getting quality feedback and making great revisions, your app idea might not comply with legal and industry regulations.

Here’s how to avoid the Achilles’ heel of compliance problems.

When it comes to apps, legal concerns concentrate on one word: privacy.

In the grip of your great idea, you might not stop to think about how much data your app collects from the user, but app regulators certainly are.

Privacy regulations vary among countries, but common standards include:

  • Not collecting location information without consent
  • Not collecting unique user data that isn’t necessary to your app’s functioning
  • Informing users about what information you will collect and how long you will keep it

If your app fails to meet privacy regulations and other legal requirements, it won’t get anywhere near the market.

Industry Compliance

Almost every industry has its standards. Make sure you meet them.

For instance, a healthcare app must be careful to meet stringent HIPAA standards in the United States (and the comparable standards in other countries). Apps that collect and use financial data have to obey strict regulations as well.

If your app falls into the industry of children’s entertainment, you’ll have even more standards to meet to protect children’s privacy.

Find out what industry standards you might not know about. You’ll save yourself valuable time and keep your frustration to a minimum.

The EB Pearls Solution to Idea Validation

How does EB Pearls develop apps that convert? By using the most proven idea validation and business strategy models.

If you want to take your idea validation to its full potential, take a look at the ingredients that go into the EB Pearls solution to idea validation.

Business Model Canvas

The business model canvas maps out the basic building blocks of your company and shows how they relate to one another. It’s a key way to avoid overlooking any of the moving parts that will add up to your company’s success.

You’ll start by identifying the 9 key components of your business model, from your customer segments to your revenue streams. Putting them all together, you’ll see exactly how your business really works — and which pieces can be improved.

Value Proposition Canvas

Before anything else, your startup idea needs to provide value to the customer.

The value proposition canvas is a model that makes sure that your business idea is centred around meeting the customer’s needs. It does this by breaking your business idea down into its most basic parts: what the customer needs, and what you can offer them.

With in-depth analysis, this deceptively simple model offers crystal clear insight into what your idea is doing right, and how you can improve it.

Five Forces Model

Michael Porter’s breakthrough Five Forces model takes idea validation to the next level. It analyzes how the five most important competitive marketplace forces act on your industry, your idea, and your business.

This in-depth analytical model is a must for success in a challenging and competitive industry.

Will My App Be Successful?

If you want to survive the competitive world of app development, having a good idea isn’t enough. To be successful, you need an idea that’s strong and thoroughly tested. Idea validation is your key to building a strong startup on a rock-solid base.

If you’re looking for the best online connection with your customers from a company that understands startup culture, turn to EB Pearls. Their award-winning digital communication designs websites and apps that get results. Contact them to book your free consultation and start growing your digital platform.

Akash Shakya

Coming from distributed computing background, Akash manages the Sydney operations. He is highly technical yet very business focused and is always driven to create successful business products for our clients.

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