OMG, OMG, OMG! Finally, you have landed on a business idea! You can’t believe how great/unique/marvelous/groundbreaking/earthshattering your idea is. You walk around bragging to your friends, family, cats, and strangers about your new idea.
Then you find some money (your lifelong savings). You find an investor (your dad!). You find a cofounder (your friend who’s up for any stupid idea you come up with). You register your company. You build a website. You create the product. You even hire a “Digital Marketing Consultant.” Everything is set. You start dreaming of vacationing in Tuscany Italy, sipping wine right out of the vineyards (this is actually my dream!).
It’s the launch day and guess what? No one wants to buy your product! Well, that sucks.
Even though you haven’t noticed, this happens to a majority of startups.
Startups are different
After years of procrastination, I finally started reading The Lean Startup by Eric Ries. Then I started banging my head on the wall for not reading it earlier. If you’re planning to start your business or just started something, you need to read this. It’ll save you a lot of money and time.
For a long time, I was confused about what a startup is. Some define startups as a business in its early stages. Some think that a startup has to be wildly innovative. What if your idea isn’t that innovative? Isn’t it a startup? Or what about small businesses? Don’t they fall under startups? Then I landed on Eric’s definition and everything else vanished.
A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty. – Eric Ries
The keyword is extreme uncertainty. That’s why your local bakery isn’t a startup (unless they are baking a loaf of bread that’s so unique which doesn’t guarantee a future!)
When you come up with a startup idea, you’re not certain about its future. You are not sure whether it will become a success. You wouldn’t even know who your customer is going to be. There’s going to be a lot of assumptions in the beginning. So how can you guarantee the success of your idea?
Importance of validating your idea
One of the critical mistakes most entrepreneurs make is falling in love with their idea. You will start believing so much in your idea that you will see no other way but succeeding and roll in money. You start building your product without testing your assumptions. When the time comes to sell your first product, no wonder anyone wants to buy it!
All that time, effort, money and bragging for zero customers! Instead, all that pain and misery, what if you can run a few tests before launching to figure out if there are people to buy your product? It will make your life so much easier and most of all, you wouldn’t feel like a failure and a loser. That’s what idea validation is all about. Validating your idea before starting your actual business.
MVP (Minimum Viable Product)
Before getting to validation, you need to get an idea about the Minimum Viable Product. MVP is not your final offering. It’s also not the smallest product imaginable. It’s a prototype or the first version of your final product. It may not have all the features that you’re dreaming of. But it’s good enough to identify if a person wants to buy your final product. Get it?
Sometimes it doesn’t even have to be a prototype. It can be a simple test or a signup form to subscribe to your future services.
Your goal is to understand if there’s actually going to be a customer who will buy your product once it’s finished. If you can create a little test to identify that, it’s your MVP. You’ll get this when I reveal some super easy techniques to validate your idea later. But before getting there, you need to understand one important caveat.
The difference between “I would definitely buy that” vs. “Actually paying money”
Imagine you’re going to start a personalized movie recommendation service. You will recommend movies to people who don’t have enough time to find great movies. You will even provide the movie and you’re going to charge something each month for your services.
When you share your idea with your friends, they would say what a fantastic idea this is. Most would say, “I would definitely buy that.” But once you actually launch your service, some will not have “enough time to watch movies” or suddenly will not be interested anymore. There’s a fine line between “I’m gonna definitely buy that” vs “Actually paying money.” Whenever you’re trying to validate your idea, it’s always a great idea to ask for money upfront. This might be terrifying in the beginning because you don’t have a product when you’re asking for money. But if someone pays upfront, that means your idea is validated. Even if you couldn’t build your product, you can always return the money later.
Now that you get the hang of it, let’s dive into some of my favorite ways of validating your product or service in Sri Lanka.
Calling strangers to buy a product which doesn’t exist? I know. That doesn’t sound sexy at all. But you can actually do that. Start calling people who you think might become your future customers. Some will be annoyed but most of the time, you’ll get a response.
Creating a website
You can create a simple website that educates visitors about your product or service. Remember. This doesn’t have to be your final website. Mention what you’re offering and the price and ask people to sign up. Take them to a Google form when they click the signup button and start contacting them. If you have enough responses, you can consider your idea is validated.
One of the simplest things you can do is creating a Google form and publishing it on your Social media. Explain in detail what your product or service is going to be and ask people to sign up if they are interested to know further details. Once they submit, contact and persuade them to buy your product.
Creating a video
Is your idea too complex to explain? Create a small video mentioning the benefits and features of your product and ask people to sign up for your beta version. That’s how Dropbox validated their idea initially and managed to get the first 75000 customers.
Getting out of the building
You can whiteboard and daydream in your office but one of the best ways to validate your idea is to actually get out of the building and talking to your potential customers. Go and meet people who might become your customers. Talk to them and identify their common pain points. Ask them how much they would pay to your solution. Did you know that AirBnB founders literally flew to meet their first customers? They visited them and got to know them better. You can do the same.
Creating a Facebook Business page
Rather than building a fancy website for your business, you can first start with a Facebook Business page. Facebook even allows you to add your products so you can create your own Facebook store. Try to sell at least few of your products here. If you can find enough customers, you can move on to your next step.
Creating an email list
Email newsletters are great for educating your potential customers. You can use a service like MailChimp to create a free email newsletter about your products and services. Ask people to sign up. You can even ask them to pre-order your product. If you get a bunch of potential customers, you can actually build the product and send it. If not you can always return their money.
Look for it
Even if you think that your idea is so unique and out of this world, there is a chance that someone somewhere is already doing it. If you find a similar business, don’t be discouraged. That’s more reason for you to celebrate because the idea is already validated. You can always look for ways to improve the existing product. So go for it.
Keep an eye on online communities
Most great business ideas are solutions for existing problems. Join online communities (Facebook groups) who are potentially in your industry. Try to figure out the problems of members. You can even pose questions to understand their biggest pain points. If the same problem is repeated, bingo! Your idea is validated.
Even though I have mentioned some practical ways of validating your idea, taking your first step is always going to be a leap of faith. You’ll never know what’s on the other side. That’s the daunting part. Once you make the leap, you’ll be free forever.
Now don’t go and read the next article. Get a piece of paper and figure out how you can validate your idea. If you have more questions, add a comment below and let’s start a conversation.
If you want to start an online business in Sri Lanka, we have a practical workshop for you. It’s called E-Commerce Essentials. To learn more and join the next workshop, click here.