For any entrepreneur, before venturing deep into the launch of a business, it is very important to get a vote of confidence as well as a fair review of the business idea in the form of a validation check. This should ideally be conducted at the initial stage before any monetary investment is made or committed. The concept of idea validation is neither recent nor overly complicated in terms of implementation. It is as simple as asking prospective customers if they would be interested in spending money on the product or the service that a businessman is considering to sell. Despite its simplicity of execution, its ultimate result usually proves to be highly beneficial.
However, the challenge, like in any other business operation function, lies in finding a method to obtain the right data and feedback, and also to interpret the data to find the loopholes in the idea itself. This is particularly a major hurdle for many founders who are starting a business venture for the first time.
If the correct strategy is utilized, then it can reflect what the market thinks about the possible product or service which is planned to be offered. In many cases, there are also instances when one finds out that the market does not actually have any opinion about it at all, which is not necessarily a bad indication. Hence, it would be wrong to only expect a black and white response to the question of business idea validation.
The reason why business idea validation is often viewed as an easy to implement option is that there is typically only a handful of parameters to consider. Additionally, the process does not take too much time and usually requires no or very little monetary investment. The early validation is only an indication that the business is on the right track and the viability of the project as a whole.
Interpretation of the responses is a vital aspect of the validation process. Unfortunately, the new business conceptualizers often stutter in this aspect, and many a time this is due to a variety of reasons. A difference in this regard can be made if changes are made in the approach itself. The following are some tips which can help in setting up a mechanism for validation of business ideas:
High Volume of Responses
One of the major reasons why many business ideas often end up getting validation when they do not deserve it, and vice-versa is that not enough number of responses are collected and analysed. Business ideas generally tend to evoke strong responses, be it positive or negative. However, no matter how logical the reasoning for a particular response may be, overemphasis on one or a small group of responses should be avoided. This is easier said than done, but it is a crucial aspect which needs to be incorporated in the validation process.
A consensus has to be sought among as many responders as possible about the new business idea. Like in any other analysis, the greater the number of participants lesser the margin for errors.
Segregation of Expert Advice
When you float a business idea people from all kind of business background will have an opinion. While they will obviously bring their experience on board with their advice, it is also essential to know whose advice is more relevant than the others. For example, the views of a person who has experience in the same domain as the business idea should be more relevant than those in a different sector altogether. Hence, it is important to pick the experts carefully whose advice to value as compared to the others.
When picking experts, it is vital that necessary to know what to look for and where to get the right advice from. Many entrepreneurs look for online portals like Quora and LinkedIn to find people who can provide relevant and useful advice. Finding a person with in-depth knowledge in the industry and has experience of building something in the same domain can act as a great source of validation. However, business personnel should avoid depending solely on the advice of an individual. This is because at the end of the day as mentioned before, it is just one out of many opinions or responses.
The Best Experts – Clients
A business idea should never be completely shelved because one or more than one expert denounces the vision that you have. In this regard, the behaviour or the opinion of the prospective customers should be the highest. The potential paying customers should be the one who should give the best and the most realistic indication of the market viability of the product or service which is being planned to be offered. This is where crowdfunding can be an excellent source of validation apart from obviously raising funds. The reason why it is a crucial method of seeking validation is that it is often easy for a person to say that he would buy a product or service, should it be made available in the market. At the same time, if a client is willing to invest his money in the idea, then there is no bigger vote than that. When people are actively supporting their positive opinions with their paychecks, that’s what one should consider as the ultimate vote of confidence and validation.
These criteria can act as a guiding light for any entrepreneur to determine if the business idea that he or she has come up with is a genuinely feasible and profit-making one, or if it is just another run off the mill idea which is destined for failure. It is not to say that there are no other criteria to check the validity of a new business idea, but these are definitely some of the most effective and realistic ways to seek validation while also understanding the dynamics and the realities of the market for a product or service in a particular domain.