Startup Idea Validation: A 2-Stage Litmus Test

It might seem great on paper but how do you know your new business idea is going to be a success in reality? Rather than trust to luck, having a handle on what your customer’s problem is and a clear sense of what the solution looks like is the smarter way to develop a product or service that delivers.

Stage 1: The Problem

You can’t create a good solution if you don’t know what the problem is. Strangely enough, that’s just what a lot of businesses do every day. Call it a gap in the market or a problem with the status quo, unless your products benefit your consumers you’ll have trouble selling.

The best kind of product is one that solves a serious problem. So, before you rush out and start advertising, here are four important questions you are going to need answers to:

· What is the painful problem?

· What specific group of customers have this painful problem the most?

· What does the problem look like to them?

· What does a solution look like to them?

Here’s a simple problem: How can I get from A to B in my car with the least amount of fuss.

Here’s what the problem looks like: I have to follow written down directions, refer to a complex map which means I have to keep stopping to check the damn thing, or I have to find people to ask the way when I take a wrong turn. I wish I had someone in the car who could give me directions and so get to my destination quicker.

Here’s what the solution looks like: We’re going to make a box that talks you through the journey and when you need to turn left or right. All you have to do is stick in the zip code and wait till the box says ‘you have arrived at your destination’.

It’s Good to Talk

I say, it’s even better to listen. To fully diagnose the painful problem you need to carry out extensive customer interviews. It’s all about looking for patterns, commonalities across the board, that better define what your particular business solution is actually going to deliver.

You need to pay particular attention to the words and phrases your market uses to describe their current situation and, more importantly, what they would like to experience instead. Why it matters to them and the difference their favored solution would make is also important, particularly when you come to creating marketing materials later on in the process.

Top Tips for Exploring the Problem

· The questions you ask when you carry out these interviews should be open ended – in other words give the market a chance to explore the heart of the matter.

· While working with a group is expedient, interviews are best done on a one-to-one basis.

· Your aim is to elicit the most honest feedback you can and explore the issues. This is not a time to sell to your market, there’s plenty of opportunity for that later.

· The tricky part of interviewing is not getting attached. If you start to show bias, even agreeing or disagreeing with certain points, you are likely to skew the information you receive to the point where it is all but useless.

· Your mission, should you choose to accept it, is to discover all aspects of the painful problem and, within this, you have to get as specific as possible. Drill deep until you get the real answer.

· It is not up to your customers to tell you what solution to make. Their role is simply to articulate the problem to be solved.

Interviewing is an art form. We can all ask questions and we can all note down the answers. The skill of the entrepreneur is in asking the right questions, to listen well, and to know how to analyze, interpret and order the answers so that they make sense and lead to the right solution. It is perhaps the most important skill that you can develop if you want to produce the business ideas that create an impact and, more importantly, last.

It’s not all done and dusted once you have properly identified the painful problem. Of course, it’s not. Now that you know what it is, you have to find the appropriate solution. Not only that, you have to find the solution that knocks the socks off the competition and wows you customers.

Stage 2: The Solution

As the entrepreneur it is up to you to innovate a solution. This is hopefully one that the market couldn’t envision on its own or hasn’t already created. If you have collected all the information, sifted it and analyzed it then you should be in a better position than most to come up with a strategy that works.

Does my solution solve the problem?

Here’s the bad news: In all honesty, your first solution may well not be the one that you eventually go with. You will have to test it again, to make sure that it works as well as you anticipated. If it doesn’t, you have to go back and try again. And then test… and then…

Is my solution significantly better or different from existing solutions?

There’s no point in reinventing the wheel, as the old saying goes.

Of course, you have to be aware of the competition and what they are bringing to the table and how it differs from, or is the same as, your particular business idea. Competition is any product or service that solves the same problem even if it does so in a completely different way. This includes cobbled together solutions by the market itself. Your brilliant solution needs to be a lot better and significantly different to set you apart from your competitors. In other words, ideally you have to be offering a solution that no one else is.

On Going Product Development

To achieve this you will need to experiment with different iterations of the product through a constant feed-back loop with the market. When this happens for many businesses, customer development will occur at the same time as product development. Thankfully, this is a pretty good thing. Many early adopters of your product will love being part of the further development process – after all, it’s essentially their product. The nub of the matter is that you need to constantly innovate, check back with your market, change, improve, and even sometimes move off in another totally different direction.

There’s always another painful problem just around the corner – in fact your product might create a few itself. There’s always another round of interviews that need to be run. There are always more and more ingenious solutions out there. The market very rarely stays entirely happy for long even if your product is the most perfect solution in the world.

Most startups struggle and fail. Valery Satterwhite specializes in the success of fast growing startup businesses. She helps startup entrepreneurs get, keep and grow customers and excite investors. Startup entrepreneurs and founders. avoid the big and costly mistakes that derail a lot of startups, even those with great ideas. For more information please visit http://www.NailMyStartup.com.