003: 8 Ways to Validate Your Business Idea

No matter the structure, size, or platform businesses exists to solve problems and meet a needs. If you have an idea for a business great, but how do you validate that idea? How do you know the idea has the potential to work?

Maybe you’re like me and you get ideas all the time, as a matter of fact, I get ideas pretty much every day. When you first get an idea it’s tempting to think the idea is perfect and if you had the right help your idea could be a reality.

I learned first hand this is not the case. In the past, I had a so called “great idea”. I registered a domain name and began writing out the content to build the website service. My idea involved creating website templates which I would customize for clients as long as they paid the setup fee and the recurring monthly fee. I chose my target audience and did just about everything except for validating the idea. Some months later I realized I lost out on money spent on marketing and even worse I lost out on time.

Don’t let your urgency to take action blind you from the necessities of validating your idea. If you really care about your idea, take the time to validate your idea.

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You don’t have to learn the hard way like I did, here are 8 ways you can validate your business idea and determine if the idea will work.

1. Ask yourself: what problem are you solving?

As I mentioned earlier, business is all about solving problems. The first step to validating your idea is to identify what the problem is, then you think about multiple ways you can arrive at a solution. Think about when the iPod first came out, the problem they solved was “how can you fit all your music into one convenient area without carrying CD cases”? This brought about the invention of an iPod and later the smartphone. The quicker you can to find the actual problem you’re solving, the better you can refine your idea easily communicate the idea.

2. Get feedback early

Early in the process of identifying your business idea, communicate your idea in a clear concise way to different people you trust.

You’re looking for two types of feedback in this case:

The devil’s advocate

You want to find somebody who can tell you the honest truth about your idea but also help you think of the difficulties that may come up when making your idea a reality. This person can be annoying and seem negative, but they can also help you remove all the idea romanticism from your mind.

The hype man

The opposite of finding someone who is the devil’s advocate is to find someone who was willing to encourage you and can connect you to the resources you need to make your idea reality. You don’t only want to just hear negative feedback, but you need to hear from someone to say that’s actually doable, it’s actually possible here is some things you may want to look.

3. Look for certain trends

Some years ago there was no such thing as Facebook, Twitter, Instagram or Snapchat. Now they have social media consultants who exist because they are meeting the need of a certain trend. If your idea has to do with a certain trend and you are early to the party this idea could pay off.

4. Identify competition

Chances are if your idea is any type of good there may be other people who have a similar idea. You may be able to take what already exists and create something new from a different perspective. In Houston, there is a donut restaurant called Glazed. Sure, we have Shipley’s donuts, Dunkin donuts and Krispy Kreme however Glazed differentiates themselves by making one of a kind gourmet donuts you can only get there. If you find your idea is similar to others ask yourself, how will you differentiate yourself from others?

5. Create a prototype (mini version of your idea)

Create a prototype or a mini version of your business idea instead of trying to launch the full idea. Some call this an MVP or minimum viable product. Break the idea to its simplest form and see if it works. If you have some success then you can fully build it out.

6. Build a product for a person who represents an audience

Tailor your idea toward a certain type of person or audience. For example, when diapers.com first started the target were parents of newborns. Parents were too busy to leave the house to buy diapers and it was inconvenient to travel back and forth to the store with a newborn and diapers.com promised delivery to their doorstep. It just so happened that they were many other people in that same situation and their business grew from that point on.

7. Do you enjoy the work?

You can’t only pursue a business idea for the purpose of making money, otherwise you’re going to get burnt out because there is no passion driving you. I know lawn care is a reliable business and has been for some time and grass is not going to stop growing, but I if I were to try and build a lawn care business it wouldn’t work because I am not passionate about it.

8. Has someone paid me for this work?

This is the most important question you can ask yourself when validating your business idea. Someone has to be willing to give you money for your service, skill or product. When I first started out with web design I practiced creating my own personal project until someone observed my skill and was willing to pay. When people are willing to pay you are a professional, the only thing left is to work on refining your business model and scaling your idea.

Have any of these ideas worked for you or maybe you have validated your idea another way. Let me know in the comments below.