Idea Validation: Critical Steps to Validate Your Product & Business Concept Before You Develop
Specno
February 21, 2024
Watch: What is idea validation, why is it important, how does it work and how does it help you get funding and build a successful tech business? Plus: The ideal idea validation framework and methods we’ve used to build over 100+ successful new startups
Just as you wouldn’t cook without a recipe, travel without a map or build a house without blueprints, it’s risky (to the point of folly) to build a new tech product and expect to turn it into a startup worth billions without first checking that your idea is valid, the market big and accessible enough and willing to pay for your solution.
And, having helped build over 100+ startups and worked closely with 200+ tech investors, we can confidently tell you that the best possible way to ensure future success in the tech space is by engaging in idea validation first.
Watch: What is idea validation and how does it work?
In this video, our CEO Daniel Novitzkas gives a top-level overview of the need, processes and specific deliverables that go into our concept validation service.
The importance of idea validation
Not every idea can feasibly sprout a billion-dollar business. Sometimes there are market, tech and business realities too great to overcome at this exact moment. And the point of idea validation is so that you know whether something is likely to work or not BEFORE you invest time and resources into creating it.
Or, on the other hand, to help make you aware of the potential future pitfalls an early-stage-successful product might face later on BEFORE you get there. To help you build a roadmap for “making it work” despite all those challenges
With idea validation, you are trying to establish beforehand:
Whether a problem is big and important enough to be solved.
The size, scope and nature of the market, so you know how big you can realistically grow.
Whether we have the technology, access and capability to actually deliver on customer promises.
How you can monetise and grow the product.
What resources you’ll need to create and manage it.
How to roll it out, gain and grow usage.
Whether you can apply for funding (and how much).
A clear roadmap to execute the plan to build an actual business out of your initial idea.
Once you have an idea, testing it critically is vital. And there is actually a reliable 3-step framework for doing just that:
Desirability Assessing the market is the first step in idea validation. You need to really look at the current market for products like yours and get an idea of how big the total market is. Then, you need to analyse the existing players in the market – who (of your competitors) owns what share of the market currently. Realistically, the current largest captured share of the market is realistically the maximum market share you will be able to capture over the next 10 years – vital info for knowing how much to invest, or whether you can get funding (and how much) etc.
Feasibility Next, it’s vital to map out what your idea technically needs to deliver on its promises. I.e. can it be feasibly built? If a vital part of your solution requires, for example, access to a closed-off API you don’t have access to, you physically cannot build it. Or perhaps the tech you need doesn’t quite exist yet. It’s important to assess feasibility not only for right now, but also to keep in mind scaling – is it possible to offer the solution to more and more people?
Viability Finally, you need to make sure it makes business sense. If the cost to build and maintain is greater than your potential market share can deliver back to you over the next few years, it’s just not a good investment. Likewise, if you know that technology or behaviour is going to change and lead people away from your current planned solution over the next few years, you’re not going to get backing. So it’s important to assess the viability of your concept and, if needed adapt your approach to help make it viable.
Tried and tested concept validation methods
As you might have surmised by now, one of the cornerstone tools for idea validation is in-depth research. Figuring out the market size and scope, viability and tech needs requires a lot of data, insights, networks and pools of information to draw from. And then, how you use those is key. See how to run some key validation experiments.
A solid method for idea validation is to build out a clear roadmap of how your idea becomes investable. Focus on 5 key points:
Defining the problem – make it very clear what needs your concept addresses.
Market size and analysis – show that the market exists, how big it is, prove they are willing to pay for the solution and create a realistic sense of how much of that market you can capture in the next decade or so. Also see how to check if an app idea already exists.
Possible monetisation strategies – define how your product will make a return and how that might change over time.
The founding team and future resources – show what people and resources you will need to secure through every stage of development, from starting to build, all the way through to maintaining, marketing and scaling. See just what skills you need in the ideal startup team
A go-to-market strategy – show how you will roll out the product, whether users are OK with a product that’s still in development or if you need a polished MVP, how you will onboard them, their journeys, how you are going to generate traffic, usage and growth, and explain your pricing strategy in detail.
Specno’s unique approach to app idea validation
There are many ways to validate your idea. Some startups do it themselves, but you should know that you can have it done professionally. We at Specno, for example, are an app development agency. And therefore we have a vested interest (not to mention years of experience) in growing the tech industry.
Because of that, we offer idea validation as a service – we have such a large network and access to resources, it just makes sense. So you can talk to us at any time about Concept Validation.
Some of the big benefits of validating your idea via us, apart from getting the experience of building over 100+ startups and working with 200+ investors, is that we include some extra steps in our validation process that others might not do:
Founders Market Fit Analysis We don’t just validate the product concept, we delve deep into the business itself, especially from the founder’s perspective. We work with you to plan in-depth the future of the business: what happens after you get funding, how do you generate a return for your investors and what is your exit strategy – should you build to sell or list?
Like-Competitor Analysis We do a slightly more thorough look at competitors, including even those pen-and-paper companies that we in tech too often ignore, to get a realistic idea of market-share spread. And then also look at their prices, features, and how much funding they have managed to raise in the past, to build that into the picture of your business’s future value and potential.
User Activation Plan Most new startups battle with marketing. You know you can buy traffic, but probably don’t realise how expensive and, if done incorrectly, unsustainable that can be. We come in with an in-depth understanding of performance marketing and help guide you to activating users in a way that’s scalable.
Quarterly Game Plan Again, apart from just validating the concept, we actually give you an easy-to-implement game plan to track your day-to-day, week-to-week progress at every level. So you know you are hitting the targets you set for yourself, your team is hitting their targets and everything is on track.
Pitch Deck Everything we give you in the concept validation process can be collected into a pitch deck which you can use almost as-is to secure funding, bring in partners, hire staff or even pre-signup users.
