Before committing resources to a new business venture, you should make sure that there is a viable market for whatever you’re developing. The process of determining a business’s viability is known as idea validation.
What is idea validation?
Idea validation is a process by which you determine whether your business idea has a good chance of succeeding in the market. You want to have reasonable certainty that there is an appetite for your offering before committing large amounts of time or money to creating something that no one will buy. While validating an idea is not a guarantee of future success, the process will build confidence in your product while gathering useful ideas and feedback on how it might be improved.
Why should I validate ideas?
Idea validation provides a proof of concept that will help you build your business plan, investment pitch, or market entry strategy. Ideavalidation also might save you from sinking resources into a poorly conceived or unnecessary product.
In other words, idea validation
- saves time
- saves money
- gathers useful feedback from potential customers to help improve the product
- builds confidence in the idea
- helps you better understand your target market
How can I validate ideas?
The most important step in idea validation is to build an audience of potential customers in your niche. Your friends and family almost never fit the bill. Their personal relationship with you will bias their feedback, and biased feedback may send you down a misguided or unwise path for your business.
There are many ways to build an audience.Here are a few:
- Talk to your market directly. If you have the means to meet potential customers in person, ask them questions about the products they use, the frustrations they have, and where they find information about similar products. For instance, if you’re building an online store aimed at runners, join some running groups and talk to the people you meet. Ask for references to other people who might be willing to provide input. Create a contact list, and seek permission from everyone you talk to add them to this list. While everyone may not agree to join, it’s better to talk to those interested in engaging with you than those who may feel intruded upon. Keep the initial conversations casual and open-ended; ask about their needs vs. trying to get them to buy into your idea. Then, once you’ve established trust, you can collect more specific feedback.
- Meet your market online. Join relevant communities where your target market gathers online. These might be Facebook or LinkedIn groups, sub-Reddits, Twitter chats, or other online places where you can ask questions of fellow members. Keep in mind that many of these communities have rules against self-promotion, so spend some time familiarizing yourself with the group, learning its rules and rhythms, and creating connections to membersbefore asking for help. Once you’ve nurtured some online discussions, ask for permission to add your new connections to your prospective customer list.
- Host a contest or giveaway. Use a giveaway platform like KingSumo or Rafflecopter to create a contest. Offer contest entrants the chance to win your product for free. If you collect hundreds or thousands of entrants, this shows the product is interesting to people. However, if you can’t convince people to give up an email address even if the product is free, it’s likely they won’t buy it when it’s not free.
- Nurture a following on social media. Build an audience by using relevant hashtags, pictures, and shout-outs to other profiles to grow an audience of loyal followers to yourown profile. Monitor how quickly the audience grows and how engaged it is. Depending on the platform you’re using, you can set up Facebook or Twitter surveys. Alternatively, you can create a free survey on PickFu to share with your followers and email list.
- Create a crowdfunding campaign. Crowdfunding sites like Kickstarter and GoFundMe are a good litmus to gauge interest in your product. Are users willing to back your idea and, if so, what do they say about it? Just remember that if your campaign meets its funding goal, you’ll have to deliver whatever rewards you promised, so factor this effort into your budget.
Growing an audience takes time and hard work. But once you have an early audience in place, you can use it to improve your offering. You want to form a group of people within your target market, and then make sure that you’re building something those people actually need and want. Create surveys or ask questions via email to collect responses from your audience. It’s important to remember, however, that just because someone expresses interest in buying a product, it doesn’t mean they will. Instead, set up tangible validation targets such as a number of pre-sales, software beta testers, or email opt-ins to hear about your product launch.
An alternative (and potentially faster) way to grow an audience is to run paid advertising campaigns on Google, Bing, Facebook, or another network. Make sure to learn the basics of the platform you’re advertising on to take full advantage of its targeting features. Set a doable budget for a test campaign. If you don’t see traction with this test, either your campaign is flawed, or your idea is. You can avoid a flawed ad campaign by due diligence — researching the platform, your competitors, and the target — but if your campaign is set up properly and still fails to provide leads, it might be time to take a hard look at your idea.
Validating an idea without an audience
Building an audience may take weeks or even months. If you’re in a hurry to get your project off the ground, you may be reluctant to take all that time. That’s where PickFu may help.
PickFu enables you to create surveys quickly and easily, and best of all, we bring the respondents. Simply input a question such as, “Would you pay for a service that…” or, “Would you buy an app that helps you…” or ask for more specific feedback like, “Which of these ideas sounds more appealing to you?” By asking people you don’t know, you gain a fresh perspective and learn the why behind their responses.
With PickFu, you can customize the poll audience based on demographic traits, interests, and behaviors such as iOS or Android users, homeowners, vegetarians, dog or cat owners, heavy readers, podcast listeners, frequent exercisers, Amazon Prime members, and more.
Most surveys complete in less than 15 minutes. Your results include quantifiable results in the form of votes or ratings, as well as qualitative answers in the form of written comments. We’ll also provide demographic information on everyone who responded, so you can slice and dice the data by age, income, gender, or more.
How much does idea validation cost?
The cost of validating your idea will depend on the methods you use to validate it. For instance, you’ll need to calculate the cost of outside resources like freelancers or developers, advertising expenses for Google or Facebook campaigns, and any software costs to set up landing pages.
For PickFu polls, a 50-response poll starts at $50. You can customize your polls by adding more respondents (up to 500), adding audience targeting (such as only polling women), or other useful features.
How to validate an idea using PickFu
1. Create your question.
Your question is the heart of your PickFu poll. This question may be open-ended (i.e., “What do you think about…” or “Do you think that…”) or it can ask respondents to choose an option (i.e., “Which book would you be more likely to open?” or “Which business name sounds more appealing?”).
It’s important that your question does not bias the respondent either positively or negatively. For instance, “How much do you love the idea that…” would introduce positive bias, while “How unhappy are you that…” introduces negative bias. Avoid leading words and phrases.
In addition, do not make assumptions about your audience. A question like “Where do you like to party?” assumes that respondents like to party, which may or may not be true. Ask a less biased question such as, “What do you like to do in the evenings?”
2. Upload the options
You can give poll respondents options to judge. These options may be plain text (up to 1,000 characters),a URL, images, or a video link. You may include one to eight options in any PickFu poll.
3. Choose your audience
The PickFu Panel is comprised of people from all kinds of demographic backgrounds. By polling people you don’t know personally, they come to your project with fresh eyes.PickFu respondents are each paid a stipend to participate in your poll, and they’ve also signed a non-disclosure agreement.
PickFu enables you to limit who answers your poll through audience targeting. Audience targeting is a smart way to poll people who are the potential customers of the idea you want to validate.
This video walks you through a PickFu poll from start to finish, including various product features and reporting options:
The importance of idea validation
Without taking time to ensure the market is receptive to your idea, you may waste time and resources developing a product that no one wants. Your time and effort would be better spent understanding customer needs and adapting your idea using the feedback you’ve collected.
No matter how you validate, take the time to listen to what potential customers are telling you. And remember, what they say may not be explicit — if no one opts into your email list or signs up for your giveaway, you may be headed down the wrong path or targeting the wrong people. Be open to criticism, and use it to improve your idea.
If the feedback is positive, you’ll gain confidence that your idea is filling a need. You’ll proceed with actionable insights that will help you strengthen the end product and be more successful when it launches.