Startups fail for a lot of reasons. In fact, according to CB Insights, there are 12 common reasons they fail. While the number one is a lack of capital or fundraising, a whopping 35% of those that fail do so because there’s no market need. 20% of those that fail do so because they got outcompeted. 8% of those that fail do so because of a poor product. All that’s not to say that startups aren’t a worthwhile endeavor. We certainly believe they are. Instead, it’s to say that these kinds of failures could have been easily avoided with lean startup idea validation. 

Continue reading to explore more about idea validation, including what it is and how to follow a startup idea validation framework to help ensure your startup is a safe bet.

What is Idea Validation?

Ideal validation is the process of collecting data and other key pieces of information to determine if an idea is valid and usable. Lean startup ideal validation is done prior to spending much—if any—money to better determine if a product or service is valid and worth moving forward with. Basically, it’s exactly what it sounds like. 

But what makes an idea usable? That’s a little more complex. While every entrepreneur will have some unique ideas around what makes their product valid, there are some general indicators that apply to most startups.

  • Your idea solves a unique problem.
  • The demand exists around the proposed product, service, or solution.
  • There is competition—but not too much. 
  • People are willing to pay money for it. 

How Do You Validate A Startup Idea?

Idea validation for a startup involves assessing validity at four stages: problem, market, product, and willingness to pay. Use the following startup idea validation framework to take you from idea to sure thing… or as close as you can get to a sure thing as an entrepreneur.

Validate the Problem

Have you identified a problem that is worth solving in the eyes of consumers? It’s time to find out. There are three basic methods to use to validate the problem. The main idea is to ensure you’ve got a real problem to solve.

  • Find people who are interested in your product—at least five to 10 of them. These should be individuals who fall within your buyer personas or target market. For example, if your product is a software service for small businesses, you should target small business owners here. Keep in contact with this group… they might even be your first customers.
  • Interview target users. Ask about their current solutions, what needs are—and aren’t—being met, their budget for solutions, and more. You’ll find out a lot from people, especially those who aren’t satisfied with their current solution.
  • Complete Ethnographic research. This sounds more complex than it is. The goal here is to check out target users in their natural environment. To go back to our previous example of a software service for small businesses, ask to observe a few small businesses for a couple of hours to determine if your problem actually exists.

Validate the Market

Once you know there is in fact a problem that needs solving, the next step is to assess the market to discover if it’s large enough to support your idea. How do you do this? Go online. Here are some tips to get you started.

  • Use a search engine. Search your idea’s keywords or topics to find your competitors, to find questions or pain points consumers are searching about, and more. 
  • Check out Google Trends. This handy tool can help you determine how interest has changed about your idea over time, popularity by region, and related ideas. 
  • Do website research on your competitors. How many competitors are there? What is their pricing like? What kinds of features are they highlighting? Depending upon your target market size, you should try to find at least three to five competitors to research.
  • Don’t forget about social media. Scour the social media platforms your target audience is most likely to use. What kinds of topics do your competitors post about? How much engagement or interaction are they getting? Are there any trending hashtags about the market? 

Validate the Product or Service

You’ve determined there’s a problem to solve and the market for a solution. Now it’s time to prototype or a minimally viable product (MVP). While that might sound time-consuming and costly, it certainly doesn’t have to be. Get creative. 

If your product is digital, use wireframes or create a clickable app prototype using startup validation tools like UXpin or to develop a no-frill prototype If your product is physical, consider your resources to develop a low-tech alternative to test.

Validate the Willingness to Pay

This one might sound tricky. But, it’s also one of the most important processes as it will show you if your product is likely to make money. So how do you do this? One method is by building a validation website. Platforms like Squarespace, WordPress, and QuickMVP have easy-to-use templates for building out a single-pay validation website.

On your website, you should include the following:

  • What your product is and what it does, as well as unique features
  • A call to action like “Buy now for $199” (Or what you think your price point might be)
  • A email collection form on the “payment” page so you have potential customers’ email addresses
  • A confirmation page explaining that this is a validation site and the product isn’t yet available
  • Google analytics to track data

In addition to the above pieces of information, you might also consider running ads on social media or Google to get a better idea of what traffic might actually look like. Whatever you do, just be sure it’s as clear as possible that you’re not collecting payments and the product isn’t actually available yet.

What are the Best Ways to Validate a Startup Idea? With Support from NEXT Studios.

We’re a partnership of entrepreneurs for entrepreneurs. Our team of innovators are here to help new and experienced visionaries develop ideas, validate them through a proven process, and grow them with connections to talent and capital. If you’re ready to find out how NEXT Studios can help you take your product from idea to launch, reach out to us today.

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