Failing to validate your idea is a startup killer
42% of startups die because of a lack of product-market fit. There are lots of factors that can affect product-market fit but the most avoidable one is failing to validate your idea at the start of your entrepreneurial journey. To stand the best chance of success, you truly need to understand whether the problem you are solving is:
1 – a priority one problem (consumers are desperate and willing to pay for a solution)
2 – actually worth solving (felt by a large number of consumers)
Start with the problem
Typically the problem is something you have faced yourself and you think there is a solution that is 10x better than the ones currently on the market. If you don’t have a neatly defined problem, come up with a series of hypotheses about the possible problem that exists and that you need to test.
Define your problem statement or come up with a series of hypotheses that you need to test.
Conduct depth interviews with your broad target market to:
– Identify the last time they faced this problem
– understand how they currently find solutions to the problem
– which services / companies they use to solve the problem
– what most frustrates them about the solutions they are using
– how much are they willing to spend to solve this problem
Obtain insights through listening about their thought processes, their decision making criteria and their readiness to use a new solution. This is also a great time to ask research participants if they would be happy to sign up to the beta version of your first product. Download your free user validation research template here.
Analyse the responses from your depth interviews and if you conclude that consumers are happy with existing solutions and not looking for ways to solve this problem, iterate your problem statement and repeat the process above.
If there does appear to be a problem, devise a quantitative survey to help you understand the scale of the problem, the decision making criteria, the priority features consumers are looking for and the competitive landscape. For a full guide on how to frame the problem and conduct research on this critical first step, download our Idea Validation Toolkit here.
Is the problem worth solving?
So you’ve followed the process so far and found that there is indeed a common problem shared by your target audience. Great. Now you need to figure out if it is worth your while solving it.
You need to determine your addressable market – this is the market who would potentially buy or use your solution. To land on a realistic addressable market size, you need examine the competitive landscape and identify where you think there is a white space that your solution can occupy. For example, if your product is an on-demand ride hailing app for women, don’t simply assume that the entire adult female population of your country market is part of the addressable market. Instead find the specific group of people who suffer from the problem you set out to solve. Perhaps it was safety for female passengers and therefore it makes sense to start with the most vulnerable groups – for example shift workers such as nurses or midwives who would prefer to use secure taxis after work instead of the night bus or train.
Quantify your addressable market size. This is made up of the specific consumer group you are building a solution for. Identify specifically the target consumer group and ascertain how much they spend on similar solutions to the problem you are fixing.
If it isn’t worth billions, it is not worth solving.
Hopefully, you’ve found you have a problem that is worth solving. For a full guide on how to validate your idea, download our Idea Validation Toolkit here.
Before diving straight into development, there are still a couple of steps to take to ensure you don’t make expensive mistakes.
Take your findings and define your proposition in more detail. We recommend you populate your Lean Canvas. Ensure your differentiation is at least 10x better than the competition. If you are first to market, remember that your costs to market may be higher as you are attempting to change user behaviour.
This step gets you real world results to validate your idea and whether you have landed on the right solution. We recommend you conduct a multi-variate landing page test to test your Unique Selling Proposition and gather emails for a beta launch. Iterate and test again until the metrics suggest there is demand for your solution. The great thing about landing pages is that they are quick and easy to put up (anything from a couple of hours for simple ones to a few days for more complex ones) and you don’t need to be able to code. To find out more about successful landing page testing or if you have an idea you’d like to tell us about, get in touch with us here.