How to Validate an Idea
Validating an idea is one of the largest hurdles an entrepreneur can have. You need hard evidence that there are people looking for what you are selling and that they are willing to spend money on it. If they like the idea but wouldn’t actually spend money on it, you have a problem.
You must be aware that polling people doesn’t always work and neither does statistical methods. Sometimes the people you are polling is too small of a group of people whereas using statistical data may not work because people aren’t looking for what they actually would want. A good way to prove that is that Kickstarter has a whole host of projects that are well over funded that nobody would dream of searching for on Google on their own. There has to be a start for everything. You just have to be intuitive and know what route to go.
Some tips on how to figure that out is that if your idea can’t be found on Google as a searched phrase (using Google Keyword Tool) or with the other statistical tools then you can try polling people using the polling methods.
Methods of Validation to Avoid
First some ways that do not validate your idea. You yourself cannot validate the idea because you are not the target audience. You can’t ask your family and friends if the idea is good because they are going to try to not make you feel bad and won’t tell you the truth about it. Sad I know but it is the truth. They also are not your target audience. You need to poll complete strangers or use statistical data. You need to use ways that a bank would be OK with that you can include in a business plan. You surely cannot include your family and friends or coworkers as folks who have validated your idea in a business plan. That just won’t go over well at all.
Are there competitors in the same market you wish to compete? Are they doing what you want to do? Good. That validates that people are interested in it and that you can market to them. Now the next big question to validate your idea is if the market is cheap enough to get into and if it is a saturated market or not. If the market is too saturated you may want to look into doing something else to make your living.
A good example of a market that is hard to get into is t-shirts. So many people are selling t-shirts. Unless you have a following you are going to have a hard time getting shirts sold. Shirts are hard market to compete in because it is so saturated.
Some markets are just very expensive to get into. For instance you probably don’t want to get into the large mining equipment business because it is so expensive to get into. You probably also don’t want to try making and selling your own car design. That is also a very expensive market. Try to think of things that are within your capability range.
You can use statistics to decide how many people are looking for what you have. This can be tricky though because sometimes there are products that people want but don’t know they should be searching for. Kickstarter projects prove that very well. They are things you would never look up but you would really really want. So you have to know if you want to poll people or use statistics.
You can use Google Keywords, Federal Statistical data, Google Trends, or various other stats tools. Click to see our list of statistical data tools.
Polling People Methods
There are many ways to poll people either directly or indirectly. You need to ask very specific questions. Just asking, “Hey do you like this idea?”, is not good enough. Pitch the idea, then ask questions.
Questions to ask:
- Do you like this idea?
- Do you personally have a want or need for this product / service?
- What about this idea do you like?
- What about this idea do you not like?
- How much would you spend on this product / service?
- Would you spend money to buy this product / service?
- Then thank them for their time.
Here are some places and methods:
- Post up your idea in a related forum. There are many forums on the internet. You want to post in one of the top forums for what it is. Whatever you do, do not post a link to an already built website or you will be banned quickly. Well most forums are that strict, not all. Pay attention to the rules they have set forth to avoid trouble.
- If it is a service or product that is related to a store you already know of, you can stand near that store and poll people. (e.g. If you have a gaming device or club you ask near a GameStop. Not inside but near it.)
- Buy a mailing list for your audience and send out 500 postcards and see what response you get. You do have to include information relative to what your business or service is.
- Put up a Craigslist ad and see how many people respond to it. If nobody responds, hone the message and try again. If you don’t get anything when you know the ad looks good then you know you won’t get any business. It is also possible that the folks that visit Craigslist just aren’t your target audience.
- Use Amazons Mechanical Turk service and pay people $0.60 to complete the survey. I say $0.60 because someone has tried this and found that is a good amount to do. If you pay people lower it takes a long time. You can get around 16 surveys completed in 4 hours by paying $0.60. You can use a survey system such as SurveyMonkey or Google Forms.
- Survey people with Google Consumer Surveys
The main point is that you actually have to meet with your target audience and ask them questions. You cannot assume they will like it just because you think they will.
Validate With Sales
I know it is hard to ask people for money but you have to when starting a business. Many entrepreneurs love their product and know it is a good one but sometimes pass on charging people or monetizing the product in the beginning. Sometimes people end up lowballing themselves too.
The best way to find out if someone is going to use your service is to actually do the entire business cycle which includes asking for money for your product or service. Get the money, then they get the product or service. It needs to happen. When you sell 10 orders for your product or service you know you can move forward.
Validate by Launch Page
If you cannot validate with either polling methods or with a statistics method your idea is probably not valid enough to work with. There is one last try you can make but it costs money and time.
You can throw up a website that looks nice and collects emails and tells about the idea you have. Try using an explainer video to get the point across the best. PowToon is probably your cheapest and easiest method of doing that. Then you go to PRWeb and put out a press release. You need to make a very good press release. You can hire someone off Fiverr to do this if you are not good at writing. Make sure to have various people read the press release to make sure it wasn’t done by a hack. The press release gets sent to target markets so you have to pick those markets. See what kind of response you get and go from there.
Couldn’t Validate at All?
You could just try it anyways but who are you going to market to if nobody bit with any of the other methods? You will probably end up burning a ton of time and money doing that. The point of validating an idea is to give you an idea of how you are going to market and who to and how many people will actually bite. If you couldn’t validate the idea, don’t worry, there are millions of other good ideas. Or you could re-use an idea that has worked for many other folks or try looking through an idea farm.