We’ve said it before and we’ll say it again – a great startup founder has to be a little humble. Imagine that you see a problem and find a great solution. You get so excited. You envision a cool solution and start building a product. You figure out how much money you are going to need to get the product built, and then you approach a company to help you build it.
During the first meeting with this firm, they start asking a bunch of questions: How many people have this problem? How much are they willing to pay? How many customers have already signed a letter of interest? Wait, what? You are supposed to get customers to sign up before you even have a product? Maybe a little letdown – but better than having them build it without asking these important questions!
Yep – as we discussed in an earlier blogpost about Customer Value Void, it’s not enough to have a great idea. You need to validate that the market wants your solution and is willing to pay for it. How do you do that? Here are 5 ways:
1. Do some research on competitors. Does a solution already exist? Go ahead – Google it and lots of variants of it. Is your idea lots better than anything you can find online?
2. Check it out on Google Keyword Planner. Are people already searching Google for the solution that you want to offer? If so, great. But how competitive is that keyword? If it’s highly competitive, that means others are already bidding on those words. This validates interest, but also competition.
3. Check out startup graveyards. Has someone already tried your idea and failed? See if you can find out what they did and why it didn’t work out. Don’t know where there are startup graveyards? Here are a couple of links to get you started – Startup Graveyard and CB Insights Startup Postmortems.
4. Ask yourself – Why Now? Let’s say you got through the first three steps and you are still excited that the idea has possibilities. Now you have to consider why no one has offered the solution before. Is it that no one ever thought of it? Has it just been bad timing? Is it that market factors have changed and now the time is ripe? Now you might want to bring others into this conversation. A monologue usually isn’t very insightful.
5. Create a manual or rudimentary version of the product and see if you can sell it. If you’ve gotten to this step, it’s time to get off the poolside and jump in the water. Mei Xu did this kind of an experiment when trying to decide which home design product to launch. Rather than securing full-scale manufacturing for multiple products, she simply took some samples of five different products and tried to sell them at a gift show. Candles won, hands down--and Chesapeake Bay Candle had its signature product. Direct customer feedback was used to select the right solution.
Want to hear more about Mei Xu’s approach to building Chesapeake Bay Candle? Check out how she won a large contract with Target . You can even try out the product for yourself at Yankee Candle - Mei built the company successfully enough to sell it for $75 million in 2017.
You’ll find more inspiration and examples about how to validate your product idea in our book, The Titanic Effect: Successfully Navigating the Uncertainties that Sink Startups. In the meantime, scan the rest of the blog and see what tips can help you out today. Then, subscribe to your weekly tip below.