How to Validate Your Startup Idea? A Guide to Finding Your Market Fit
Building a startup is a risky business. There are many dangers that young appreneurs can face along their way to success: A lack of resources (be it an inability to get funded or, on the contrary, a high burn rate), poor product quality, severe competition, or internal issues with the team. Yet, the most popular reason why startups fail is the lack of market demand for the new product.
That is why validating your startup idea and finding your market fit early in the process is so important. In this article, you will find tips on how to validate your startup idea without spending thousands of dollars building it.
Lean startup validation. Where to start?
So, you have an amazing idea. Perhaps it is something revolutionary that can change the world. But wait, how do you know if your idea is actually that great, and, most importantly, unique?
Software companies get dozens of requests to build “Uber for X” apps, mCommerce projects like Amazon or eBay, personal finance management apps like Mint, or social media networks of different kinds. And those can be really great, as long as they have some unique value to offer to their users. Otherwise, it will be yet another clone of a popular app, left unnoticed on the sidelines of the App Store.
That’s why it is always recommended making sure the future product has good potential before going all in with building it. But how do you do that? Well, look no further, because here are some ideas to help you in this regard.
Get to know your market
While there are ground-breaking products like eBay or Uber, most startups, no matter how innovative and unique, join the existing markets. Unless you are building something completely unique that will give birth to a new market, you need to study the existing ecosystem in the domain you are aiming to enter.
There are many things to consider:
- current market players (both leaders and outsiders)
- their target audience
- monetization strategies
- the amount of investments
Even if you find apps that are similar to your concept (and, believe us, the chances are you will find some!), ask yourself what you can do better. This can be a more friendly UX, better performance, additional features (or eliminating the unnecessary ones), third-party integrations, etc.
Take for example TopHatter. This eCommerce startup operates in a highly saturated market, competing with eBay and Amazon. However, the app has one competitive advantage - a live auctions feature - which makes it stand out among the competition and drives user interest.
The more you know about your market and target audience, the better you can position your product in the future (we will get to that later).
Some useful tools that can help you with research are startup listings like AngelList, CrunchBase, ProductHunt, and AppAnnie. You can also browse through the relevant lists and app categories on the App Store or Google Play.
Test the waters
Now, as you have identified your target market and audience, you can spring into action and ask for feedback about your idea. First of all, you can tell your friends and family about your idea and find out what they think. However, make sure they are completely honest with you!
Another way to hear from your potential customers is to reach out to them directly. Social media or dedicated web resources are good places to crowdsource feedback. You can use personal messages, post questions in relevant groups and threads, or even create polls on your own social media profile (if you have enough followers/friends).
Another solution is to get in touch with the people who might be interested in using your app via a personal message, using email (works best for work-related tools).
Please note: Shouting from all the rooftops about your startup before it is built might not be a good idea. Someone can steal your concept and launch the app before you do. That is why you need to be cautious about the things you share with the audience. Don’t ask direct questions, but rather collect honest feedback and ideas about the problems your target audience experiences and the product they currently use.
Some tools to help you:
- Finding contacts - Use Rapportive, Hunter, or AnyMail to find email addresses and other contacts of people potentially interested in your product.
- Email outreach - Mailchimp, Hubspot, and Mailshake. Or you can use your personal email to send out messages to your potential users.
- Social media networks and communities - From Facebook or LinkedIn to Reddit (depends on the target audience of your product), you can find huge audiences to look into and conduct research. You can browse related groups or topics, search by interests, or simply reach out to random users with your questions. For example, Twitter has an opportunity to create polls. If you are an active user on Twitter and have enough followers, then you can easily conduct some basic surveys there.
- Startup listing websites - there are dozens of websites like BetList or BetaPage that allow you to post a description of your startup and get early feedback from potential users. While ProductHunt is a more serious platform that requires an actual product to be featured, there are many websites that are more suitable for early-stage startup validation.
Build, measure, learn
As soon as you have a good understanding of what your potential users actually need, you can build something to further test your assumption. There are several ways to validate your idea without having to spend thousands of dollars on design and software development. Namely, you can choose from .
We recommend starting your validation with a Proof of Concept (POC), to make sure your product can be developed as required (from a technical and functional point of view).
After that, you can invest in building a visual prototype, a clickable model of your app UI. Thus, you will see how your future app will look and will be able to test it with actual users. By asking the early testers to interact with your app, you source valuable feedback and improve your product. Moreover, you can use a prototype to pitch investors and score early funding.
Minimal Viable Product (MVP) usually means an actual app with limited functionality (only the core features needed to solve a user’s problem). However, there are many ways to implement an MVP. Some of the most successful startups started out with a simple spreadsheet and ran all operations manually. For Dropbox, a simple explainer video was enough to prove that there was demand for their product.
If your product went through all three stages and was able to get positive feedback, this gives you maximum chances for success once the product is released.
Iterate and don’t be afraid to pivot!
But what if at some point you don’t get positive feedback? Does it mean that everything was in vain and now you should give up on your dream? Absolutely not!
If any of the stages described above didn’t work out, pivot and try another solution. Learn to see actionable insights in every piece of information you get, be it positive or negative feedback. Try changing a concept a little bit, or consider a different audience or market niche.
But if you are sure that you have done everything right and there is no way your startup can find a market, you can put the project on hold. Remember, if your idea didn’t find success at first, maybe it was just bad timing. Some of the most brilliant inventions failed at first simply because they were way ahead of their time.
You’ve successfully validated your startup idea. What’s next?
While the approach described above doesn’t give you a 100% chance of success, if you don’t follow these steps you will most likely fail, sooner or later.
Yet, finding your market fit is just the beginning. It takes more than a good idea to build a successful startup. Now, as you have successfully validated your startup idea, you need resources: time, money, and most importantly human resources - skilled professionals ready to help you bring your idea to life.
To be able to tackle the challenges posed by the software development process, we strongly recommend finding a strong tech-savvy partner. While you might be good at business, you definitely need to have someone who understands the development aspect as well. An experienced CTO or professional product manager will help you safely navigate the pitfalls of software development.
If you don’t have a tech-savvy friend to offer this position to, you can partner with a trusted software development company. The so-called “CTO as a service” approach proves to be valuable at the early stages of startup development. A technology partner with a solid background can be a major competitive advantage and a valuable contribution to your success.
A professional team, led by a professional project manager, will help you go through all the stages of development, starting with product definition, prototyping, design, MVP development, and further improvements and growth. If there are any technical limitations or better ways to implement the features you need, they will let you know early in the process, saving you time and money.