11 Ways to Validate Your Next Big Business Idea
What is one solid way to validate a startup idea before actually launching the business?
The following answers are provided by the Young Entrepreneur Council (YEC), an invite-only nonprofit organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.
1. The $20 Coffee Test
2. Will They Pre-Pay?
The absolute best method I’ve found for startups to validate their startup idea is to get people to buy the idea, not the product. Sites like Kickstarter are great at this. Write up your idea, present it to people, and then ask them for money. If customers don’t buy your idea, either your marketing or your idea are no good.
3. Try LaunchRock
It’s a great tool to test ads or an email marketing campaign to see whether or not people are interested. It allows you to put up a landing page that says you’ll be launching soon (or giving invites out soon), and then collects email addresses of potential users. If you test some of your marketing, but no one gives you her email address, it’s back to the drawing board.
4. Pitch to an Investor
5. Tell Everyone
Tell everyone you know and listen to their feedback. Then tell strangers about it and listen to their feedback. Then find the most skeptical people you can find and tell them about it and listen to their feedback. Whether they liked it or not, chances are pretty good they had some really constructive feedback that can help your chances of success in the market. Listen to them before you luanch!
6. Use Online Tools to Test
The first thing you should do to validate an idea is to create an “ideal” landing page and test. The landing page should contain details about the product including features (even if you are just dreaming about them). Once your landing page is complete, test it on Unbounce.com, or use a site like Feedbackarmy.comto get raw, unadulterated feedback.
7. Run the Numbers
The best way to validate a startup idea before actually launching a business is to first test out the financial viability of your idea in the first few years. You can obtain an accurate projection with software such as EZ Numbers. The basic version costs just under $60, but thereâ€™s a free trial available as well.
8. Build a Minimum Viable Product
Most startup ideas have a small component that can be created and sold fairly quickly. Since the only way to be sure that someone will actually pay out cash for your idea is to give them the opportunity to do so, putting something on the market is a crucial way to make sure you’ve got a viable idea on your hands.
9. Find a Mentor
Good mentors have a vast amount of industry experience and intimate knowledge of practices that work and don’t work. Run your ideas by an experienced mentor who’ll be tough about your implementation. Mentors want to see you succeed and they won’t let you start a business unless they think itâ€™s ready.
10. Get a Partner Commitment
Work to have partners commit to your product — either through investment or a memorandum of understanding. Finding reputable organizations that commit to your vision will make it easier to find financing, other partners and a team for building it.
11. Tell Your Mom (Really!)
While families are supportive, often times they are also the most critical of your entrepreneurial ideas. If you can convince your mother that your tech startup idea is a good one, then you have a winner.