Before testing your product with an MVP, you need to test your idea to see if there’s a profitable market for it and, if there is, gain an understanding of the market before you start working on your product.
While there’s no one-size-fits-all way to tell if your startup idea will work, there are tons of ways to validate your idea.
We asked a bunch of our entrepreneur clients and friends how they validated their startup idea…
Co-Founder of Hanzo Archives
“When you start a business, unless you can hand on heart say “I am exactly the same as my typical customer”, then there is a gap between you and your potential customers… The trick of course is to narrow that gap as quickly as possible. You want to do this by talking as much as possible to potential customers by engaging in sales activity. Just talking to customers without it being part of sales activity can be helpful in some circumstances, but the reality is that customers tell you one thing when there is money at stake and another when they are just trying to be helpful.
“At Hanzo, we have taken what is a fairly typical approach: Do as little as possible to see what the market thinks about it, by seeing what people are prepared to give you money for. You will hear this called “Minimum Viable Product” often. The trick is to do the least amount of work to see if it sells.
“Don’t fall into the trap of what I would call “Build it and they come”. Over the years I’ve seen a few people invest large amounts of time and money to build fully featured, all singing, all dancing products only to discover when they finally open the doors that it isn’t what customers need.
“Of course there are disadvantages to this approach: if it does catch the market’s attention then you will be scrambling to catch up. But by the same token you are building with the advantage of having real customers telling you what their real requirements are. It’s also not quite as daunting as it may seem in advance. For example our billing around our On Demand service is still not quite right and customers grumble a little BUT they like the service so much they are prepared to put up with it for the time being.
“Its worth noting that there is another trap here for the unwary: The single customer that ends up customising your entire product for their esoteric needs that are not the requirements of a broader customer base. Most entrepreneurs will recognise this, an early customer with lots of money promising to give you a lot of business. The trick here is not to become an outsourced development department for that customer but to keep on growing and keep on talking to new potential customers. ”
Founder of Big Mountain Data
“I spoke to as many people in the domestic violence field as I could, and then had candid conversations with friends of mine in the technology sector.
“The result of those conversations led me to view domestic violence as essentially a “big data” problem that could benefit from the many advancements in this new growth area in tech. Data on domestic violence is already captured in various silo’ed databases in structured formats. The opportunity to merge unstructured data with structured data (especially as it relates to repeat offenders) is a huge untapped “market.”
“Our thesis, before I launched the startup in earnest, was to test whether data science and analytics could be applied to a domestic violence dataset to glean new insights and create applications that could be tested in the field.
“We were lucky to get into the Bayes Impact hackathon in the fall of 2014 to test this thesis. Five teams of world class data scientists and developers worked on our data and created five submissions. The final one that won the hackathon for our dataset created an app that could readily be tested in the field. Our thesis was validated in a 24-hour period of concentrated effort. It was exhilarating. I wrote about it on my personal blog. Once we proved that we could impact domestic violence with a data science/big data approach, I was able to secure seed funding to launch the business.
“You can see the submissions from that hackathon here. All the domestic violence submissions are using our data.”
Founder of Duel App
“We validated Duel in a number of ways. Originally it was spun out of a game played in the real world called a Daredevil Tournament. We iterated on each game run to gradually improve it, so by the time we started to make Duel, there was already a certain amount of validation done on the game dynamics.
“The second way was through prototyping initially and testing the market with a small number of users, building the product and then beta testing with 1000 users. We then soft launched in the UK very quietly and iterated on the product to find product/market fit and refining features and UX.
“We are now at the stage where we are confident from our metrics that we have achieved market validation on the product and are launching globally on the 13th of August .”
CEO and Co-Founder of Tutorhub
“We realised that having a good idea was not enough. We started by conducting research on market size, the external environment (PESTLE factors) and market forces (McKinsey’s 7S’s). We followed this up by writing a hypothesis on what we thought the market need was and how we thought we could profitably meet it.
“We validated this in the first instance by seeking the views of family, friends and colleagues. We tweaked the assumptions included in the hypothesis, and then conducted three market research sessions getting the view of over 60 potential customers.
“We picked up on the feedback and updated our hypothesis again. Our alpha website was built based on these assumptions, and we have been testing these live on our website and refining our hypothesis ever since. I doubt that this process will ever finish, as customer needs evolve and we will always need to adapt our offer to meet these.”
Founder of Ziggeo
“It was in building our own B2C business (a recruitment platform) that we recognized our own pain point of having to build a secure video recording / playback solution to capture candidate videos (seriously painful because you need to make sure videos can record and play across all browsers and devices — even newly released ones).
“Once we released an API for others to power their own video recording we realized our technology was helpful for all sorts of platforms that need to capture videos (e.g. on-line surveys, crowdfunding platforms, dating apps, etc.). So we closed our B2C business and now just focus on our APIs and SDKs for video recording/playback.”
Founder of helpfulpeeps
“We initially had this very sophisticated feature rich product in mind but after realising how much it would cost to build it, we decided instead to focus on building our minimum viable product (MVP) to test our hypothesis which was whether people would help strangers for free (with the added bonus of earning karma points). Both Simon & I read the Lean Startup by Eric Ries and tried to follow much of the advice given in the book.
“We launched our MVP in Bristol and 1000+ users later with help being exchanged on an almost daily basis we feel as though we have validated our startup idea. It has also helped that in the last couple of weeks the #legup campaign has further validated our idea that there is an appetite amongst the general public in the UK to participate in a community where people share their time, talent and creativity with each other for free.”
Co-Founder of LoveHoney
Everyone had a different take on validating their startup ideas, but there were some common threads. Here’s the key takeaways:
- Talk to your early adopters – they will tell you what they want from your product, you just need to ask.
- Do as little as possible – don’t waste time and money building a product if you don’t know there’s a market for it.
- Test your hypothesis – know what you want to find out before you start trying to validate your idea.
- Test your revenue streams – are people willing to pay for your product?
- Never stop validating – the validation process doesn’t stop after your first release. Continue to test hypotheses to tailor your product to new and expanding audiences.
To find out how Simpleweb can help with your startup, get in touch today.