In our previous article, we shared some tips on how to avoid the failure of your startup. And now, it is time to talk about the steps to approve startup ideas and mistakes that should not be repeated by entrepreneurs anymore.
As we mentioned in other articles, like «Why is a good idea not enough for success?» a startup fails cause it does not meet the target audience problem in 99 out of 100 cases. Thus, the validation of demand for your product plays a vital role here. Even more important than your team, the company features, and even pricing, as without validation, you might end up with a product, for which no one will pay. As a result, you will spend a lot of time, energy, money, and end up in stress or even depression. Trust us. It is a nasty sensation. Fortunately, this article will show you how to evaluate the market for your startup idea.
Identify the problem, not the specific solution.
Quite often, people are jumping into solutions when it is necessary to take a deep breath, step out, and think of what is the real issue we have here.
It will save your time and efforts as you cut off the unnecessary actions upfront.
Determine the level of the problem.
Every business, project, or situation may have plenty of issues, but you need to find the main one. For example, your target consumer is the owner of the online store.
You know that he has such problems:
1) The level of sales has significantly subsided.
2) Suppliers repel discounts on small purchases.
3) The number of subscribers on Instagram is rapidly decreasing (it is not a sales channel).
Most likely, the main problem is the source of all subsequent ones, and its solution can simplify the rest. In this situation, the main problem of the entrepreneur is the low level of sales. Therefore, you will be able to eliminate it after studied, understanding the cause of the problem. And, as a result, the sales would raise, and so the number of subscribers will begin to grow. When the first two are solved, you can jump into suggestions relevant to improve the Instagram profile, as this problem is not as big and impactful as the sales loss. It is the most important lesson, which is ignored by most startup founders.
Find the best moving vector.
Be very attentive to the answers of potential customers, these answers hide a lot of strategic information about their business, attitude to the problem, assessment of your potential competitors as a tool to solve customer’s problems. But you should be careful if there are no competitors that are trying to solve the same problems in the potential market. This may mean that you do not have a target market, or your idea for a new business is too specific.
Find weaknesses in existing solutions.
Talk to your clients about what is important to you as an entrepreneur. Then you need to answer yourself what they like and dislike about the current solution. Take a positive attitude and avoid negative aspects of a competitor’s product. There is nothing wrong with having the same features as competitors as the basis of the product.
I hope we have calmed you down with this news. But you have to be at least 20% better than your competitors. This gap allows you to enter the market peacefully. It is your uniqueness, the value that the customer gets. You must focus on that 20% in promoting your products and services.
Calculate your budget and implement the best solution.
The next thing you need to do is to calculate the project budget. You need to assess the growth rate of your competitors and what drives them up. Is the product the main reason for their success? Are they good at service or advertising? These questions will help you understand their approximate costs. You will get a financial guide to the market this way. Do not forget to carefully double-check everything and take care of insurance in case of failures. It is not very easy in the first stages, and expenses will exceed your income, but it is okay.
After getting the final sum, compare it with your unique trading offer and your clients’ values. If the answer is satisfactory and meets your expectations — we wish you good luck!
Hurry to remind you that it is easy to create a product with low barriers to market entry, but it is not the product that forms the successful business, but your customers! Never forget that at the heart of your business, there is always a satisfied customer. Remember that if you are 100% confident in your product after all these steps — people will pay money for a better solution to their problems.
And if you need help with a new project, we are here to let your business blossom!