How to Validate Your Startup Idea the Right Way

Posted by Roni Krakover

There are so many articles out there about idea validation, most of them offering generic, worn-out advice such as “trust your gut feeling," “interview potential users,” and “conduct a survey.”

Most of these articles, in addition to being unhelpful, fail to mention that idea validation is a limited concept; that no amount of research can predict the actual adoption of a product.

Take Twitter for example. Trying to validate Twitter seven years ago by interviewing today’s average users would’ve probably resulted in insights such as “Making my photos public? Updating statuses that my boss can read? Why would I want that?” Similarly, trying to validate LinkedIn would’ve generated comments such as “Having my resume online makes no sense. My resume is confidential.”

There are countless more exmples—in short, any product or service that we regularly use today and was once disruptive could have failed validaton a few years ago.

So is validation a waste of time? Not really. It is still an important part of the process for entrepreneurs, especially when conducted in more “reliable” settings. These more reliable settings include putting concepts to a “real life” test, with outcomes such as acquisition of customers, engagement of investors, and creation of interest lists.

Here are a few idea validation suggestions that are more concrete than the traditional “listen to your gut” and “interview your friends” suggestions. At INcubes, when we get an application from a company listing a validation process like the ones below, we are far more likely to invite the team for an interview—we are always want to connect with game changing companies that are trying to solve a real market need.

 

1. Test the reaction of customers through preorders and sign-ups.

Offering people to preorder your product can go a long way in validating it. And if you’re planning on offering your product for free, you can sign visitors up for a waiting list instead. This method, that tests “actual purchase” is far superior to conducting a survey trying to asses “purchase intent.”

Preorders can be replaced by messages such as “We are expecting to launch February 2015, sign up to receive a notification,” or: “we are currently out of stock, leave your email so we can notify you when we restock.” Individuals exposed to your message should be random visitors that come across your offer, to eliminate friends and family bias.

You can bring random visitors by running an online advertising campaign (such as search engine advertising or social network advertising).

 

2. Test interest through crowdfunding.

Crowdfunding allows you to expose your idea to potential customers and supporters. The community’s reaction to your pledge can show you wheather people are interested in the product/service and support your idea or not.

If you get enough preorders or raise enough money, you are sure to feel pretty good about your product. However, if the opposite happens—you don’t get the desired reaction—don’t get discouraged right away; it is possible that the problem is with the representation of the product rather than the product itself. Poor ad copy or an unappealing video on a crowdfunding pledge can easily kill your validation efforts.

 

3. Try to get into an accelerator.

Raising money is a strong validation—finding angel investors that are willing to risk their money on your idea or product definitely inspires a lot of confidence in the direction in which you are going. Yet investors in Canada are not quick to put money on early-stage products that don’t have significant traction.

A different story is trying to get accepted into an accelerator. A reputable accelerator is interested in bringing on board strong teams with appealing projects.

If you get accepted, you can see the accelerator’s interest in your product as a validating step. Even if you don’t get accepted, make sure to take note of the inputs from the interviewing team—you can come out of the meeting with valuable insights and lessons that will contribute to the overall validation of what you do.

Company:
INcubes
Website:
http://www.incubes.ca
Location:
Toronto, Ontario, Canada

[IN]cubes is a Toronto based INcubator and accelerator that sources emerging entrepreneurs and talented startup teams, and graduates qualified businesses with innovative products and ideas towards their first round of capital. [IN]cubes connects with the most forward-thinking and grass-roots Canadian talent with the goals of transforming their new and disruptive technologies into international sensations. more


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Roni Krakover

Roni Krakover

Roni Krakover is the Marketing and Operations Manager at INcubes. Highly involved in the startup community both in Toronto and Tel Aviv, she was a board member of Young Entrepreneur Club Israel and the founder of a content consulting business. She has vast experience in consulting both in marketing and finance, and served as a statistics administrator in the Israeli Air Force. Roni holds an MSc... more



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