3 Tips to validate an idea
A validated idea is worth more than a hundred good ideas without validation
Since 2009, we have created many projects, we have worked with many entrepreneurs, companies, and some governmental and educational entities. Throughout all these years we have witnessed hundreds of projects, which of course, start from an idea.
But unfortunately we have also witnessed ideas that were transformed into projects, which were launched, and have failed.
The reasons for the failure of a technological project such as a website or a mobile application can be several, but one of them is "not validating the idea" before starting the project and developing a product.
It is important to highlight that an idea can change, that is, an idea can become a validated idea, then a product that has a validated business model, but over time, it can change and become part of another idea. , and then, another business model. All this is ok.
NOTE: In this post we will assume that an idea about a product or service is raised with the objective of generating profits.
First of all it is important to understand that an idea must:
be attractive to a group of people (large or small), that is, you must have an audience,
that audience must be willing to pay for it,
The specific amount that the audience is willing to pay must be adequate for it to be a business.
In this post we are going to comment on tips that can be used to validate an idea in its different instances.
Tip 1 - Verify that there is a business model
In order for a business model to exist, it must be clear, it must exist an income, it must exist expenses and the result must be positive, at least in the papers, since there can always be some external detail that modifies the model. What is certain is that if we cannot match this equation in the papers, it will be very difficult to generate profits.
For example, if we are going to create flying skateboards, and we validate that there is a lot of people who want that product and would be willing to pay up to 1000 dollars for them, but building each one costs us 20,000 dollars, then this is not going to end well (unless you are Jeff Bezos and you want to invest some money and generate incomes in another way).
We recommend to define the following items:
- Description of the idea (briefly but explain the concept well)
- Feasibility (is is technically possible to carry out the idea?)
- Possible domain (this is optional but can be useful when taking action)
- Number of Hours (we try to establish a minimum of hours to launch or create a Minimum Viable Product) and we will explain why
- Approximate initial expense (in case you need to buy machines, computers, software, etc)
- Approximate selling price (what we think people would be willing to pay)
- Monthly Billing Objective (what we think we could sell per month)
- Approximate monthly expenses (what we will have to spend to keep it afloat)
- Profitability percentage (is the percentage between the income and expenses of the project)
If the answers to these points add up, then we are already facing the first part of a validated idea.
There are many other points that can be complementary, such as existing competition, problem solving, alliances, in which the idea stands out, among others.
Tip 2 - Talk about the idea and know the opinion of the people
It has happened to me many times, that entrepreneurs take care of their idea as if it were a winning lottery ticket. While it is true that a very "secret" idea may exist, my position is that an idea, without a lot of effort (and money) to carry it out, is not worth much.
At the beginning we said that there must be people who are willing to be part of the customers of the product or service. That is why in this tip we recommend taking action and confirming the hypothesis that people would be interested in this idea.
This simply implies commenting on the idea to people and asking for their opinion. Obviously we are not going to do it in the street stopping any stranger, since it would be weird and even a bit reckless.
It is important to follow the following steps:
- comment on the idea in a simple and summarized way,
- ask if they would be willing to use the product or service,
- ask if they would pay for something like that,
- consult what they would add, remove or modify from the idea,
- and finally, if possible, go a little further and ask how much they would pay for it.
NOTE: if you have memory, then you don't need to write down anything, but when talking with a lot of people, it would be nice to have a notebook or voice notes.
Some ways to approach people:
- Posts on social networks: generate an image or video explaining and consulting if they find the idea interesting, you have to keep in mind that our social networks are made up of contacts, family and friends, so the opinion may not be 100% honest.
- Attend events and talk with people: if you live in a city where there are events of entrepreneurs or related topics, then you can attend them to talk with people,
- Organize an event (small or medium): this is a bit more serious, it could be a second step after the post on the social networks and attending several events. It involves organizing a small meeting where a presentation is made and people are asked to give their opinions and recommend suggestions for the idea. It is good to offer something to drink and eat, and invite people that we know can add value to the project.
It is important to understand that family and friends tend not to be very honest because they do not want to discourage you, so the more opinions of external people you have, the better.
Tip 3 - Show the idea Graphically
If the idea is part of a business model (at least in the papers) and if you have already passed the instance of talking to people, then it is time to take action and start what we will call the beginning of the proof of concept (or MVP, Minimum Viable Product).
We are not going to develop the MVP yet, because we are still validating the idea, but we are going to design the MVP (or part of it).
The easiest way to design the MVP is to hire a design agency (like Keetup :) but in the case that you are doing this slowly, then we recommend the following steps:
- Design a LOGO: everything starts from here, color palette, aesthetics, identity,
- Design product or service screens: we do not recommend designing all screens, only the most important (3 or 4) that help explain the idea you are trying to carry out.
Every MVP starts with a design, which is what will later become a product that has already materialized.
If you are at the moment where you believe that your idea is validated because you have followed the previous steps, then we recommend:
- create an institutional website where you will show the product, it will be the place to show your idea,
- generate inbound marketing (we will explain it in more in details in another post :) but in a summary, it is to generate possible visitors for the web site you created.
We hope you have served these tips, if you have any questions you can send us an email to email@example.com
or write on instagram at https://www.instagram.com/keetup/
On another occasion we will explain how to generate a business plan with Lean Startup Canvas, and we will give examples. Let us know if you would like this kind of information.