3 simple steps to validate your business idea
The success of a business can be decided by how many people want to have it or need to use it.
“Life is too short to build something nobody wants!”
But how to be sure that nobody wants until the product or service is built? In other words, how to validate the potential of your dream business when it is just an idea? Well, there are ways to do it, and fortunately, it does not require talent or huge capital, but effort and dedication.
Step 1: Conduct market research
The aim of this is to find out if there is a market for this idea and how the business environment looks like. The total research process can be within a few hours to gather enough information for general validation of the idea.
Firstly, define in which market categories your idea falls into a blue ocean or red ocean. If the concept of your product or service is totally new and has never been on the market before, or it was something you invented yourself, most likely you are creating a blue ocean. In contrast, you are in the red ocean when there are many other existing businesses that offer a similar solution or service, the customer demand is clear and constant, as well as the competitiveness.
Secondly, start doing research about the area of your business idea and get a better understanding of it. For the red ocean, you can use Google search to find information on competitors, product positioning, industry value, and market share. For the blue ocean, information can be harder to find and not so straight-forward. The sources can be from blog articles and academic research.
Step 2: Understand customer need
The demand of customers is one of the most important things that will impact the success of a business. It’s possible to evaluate the demand of customers from the early stages by using tools like Google Trends, Keyword Planner, bestseller list on E-commerce sites (Alibaba, Amazon, etc.). A website or social media site can be a very good tool to draw and track customer attention as well as communicate with them effectively. Joining in online forums, communities or social media groups that related to your idea industry will give you direct access to customer’s behaviours, frustration, and preferences. And from that, you have the base to validate again the potential of your idea.
Step 3: Make a Minimum Viable Product
The MVP is a must before you get further with your business idea. The main purpose of MVP is to create an improvement loop “create – learn – improve” to help the entrepreneur develop their idea to the better. Therefore, an MVP does not need to be perfect. The MVP Is good enough as long as it demonstrates clearly the business concept, what it helps, how it works. There are many forms of MVP to choose from depends on the industry and characteristics of the business idea, namely video, prototype, mockups, presentation slides, infographics, etc. Your mission is to reach out to focus on customer groups and ask for feedback, then use all the feedback to develop a new version of MVP.
Attending a start-up contest is also a great choice to both validate and improve your business idea. In Cambridge Venture Camp 2019, you will receive all the help you need in order to become a successful entrepreneur. Mark the application open date to your calendar and we see you soon!