11 Steps to Validating Your Startup Idea

Are you an entrepreneur who has tried out multiple business ideas, but hasn’t yet figured out the perfect idea for a new business? You’re not alone. The post 11 Steps to Validating Your Startup Idea appeared first on AllBusiness.com. Click for more information about Guest Post. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

11 Steps to Validating Your Startup Idea

By Hannah Wright

Are you an entrepreneur who has tried out multiple business ideas, but hasn’t yet figured out the perfect idea for your new business? Well, you’re not alone. In fact, many startup founders experience a few failed products before finding success.

The best way to avoid falling into this trap is to launch an MVP (minimum viable product) that validates your startup idea before you put all of your time and energy into it. There are countless ways to launch a business MVP, so let’s go over the most important steps and what has worked for me in my business.

1. Let the idea find you, instead of forcing an idea

Many startup founders (and I’ve also made this mistake) approach finding a right startup idea the wrong way: they start from a blank slate. Then they try to come up with ideas that people may possibly find cool. They start with ideas rather than problems.

This is actually a backwards approach. Instead of trying to find a startup idea, you should instead look for problems that you might be having or problems that others are experiencing.

2. Test things out on a small scale before investing your time

This point will save you hundreds (if not thousands) of hours, and the concept is also pretty simple: before investing a lot of time into a project, create a mini-version of your business idea and see if people are willing to pay for it

Also, be sure to get a few upfront payments before investing too much money as well. It’s easy for someone to say they might buy your product after it’s launched. These people may even have the best intentions and cheer you on while you’re building your product, but their enthusiasm can often be misleading. People want to be nice and encouraging, but it’s important to know that this isn’t the same as handing over their payment details.

So, create a mini-version of your product—as minimal as possible—and see how the market reacts to it (namely, are people willing to pay for your product?).

3. Use live chat on your website to identify customer needs

As you’re testing your product idea, be approachable to visitors by adding live chat to your website. Live chat can provide a forum where your visitors can feel comfortable asking more about the product and whether it has certain features they are looking for.

Also you will be able to identify customer objections and challenges more easily. For example, if you get a lot of people asking about a particular feature, this could be a sign that it’s necessary to add this feature. However, be careful not to act on requests too quickly until you notice a clear pattern.

4. Don’t stress too much about pricing in the early days

Many entrepreneurs will spend hours obsessing over pricing. In the early stages of your startup, don’t worry too much about finding the perfect price point. At this stage it’s more important to determine whether or not people will even pay for your product at all.

In the beginning, start with a reasonable price to test out the market. Later, you can always go back and make adjustments. Just remember not to price your product too low, as that could be a red flag to customers. If anything, we founders have the tendency to undervalue our products.

5. Prioritize action over research

When launching an MVP, it’s important to jump in without too much delay or analysis paralysis. Too many people get caught up in research, stress, and worry—and then end up never launching their idea at all. Successful entrepreneurs, on the other hand, tend to take action and aren’t afraid to learn as they go.

It’s true that people may not buy your product right away, or that you may not get the initial reaction you were looking for, but here’s the thing: objections can actually be good. Most digital products go through multiple iterations and changes before finding paying customers.

Over time, it will become easier to deal with rejection. You need to hear exactly why people don’t think your product is good enough in order for you to make improvements and create something that people will love.

6. Expect your product to change (and welcome it)

Your product from launch stage to product/market fit is going to look very different. As a result, avoid getting too attached to a certain feature or overall product direction. Otherwise, you risk not being open to new ideas that will make your product more successful in the long run.

It’s vital to stay flexible when it comes to the direction of your business in the early days. If you are not seeing desirable results and are tempted to not make changes to your product, this could indicate you may be too attached to your original vision or concept.

However, it’s okay to have certain preferences; it’s normal for us founders to feel opinionated to some extent. The key is being able to move on with an open mind, listening to customer feedback and making important changes when necessary. If you are too stubborn in your opinions, it can harm the long-term growth of your product.

7. Don’t be a mysterious, faceless company

While many founders may not enjoy being the center of attention, hiding mysteriously behind a company name can also be harmful. Why is this? Well, would you rather buy from an unknown company with mysterious employees whose names cannot be found, or would you rather buy from an unknown company with a team that is easy to learn about?

There is a reason why an “about” page raises conversions. It shows visitors that you and your team are human. When a potential customer can’t find anything about the owners or employees of a company, it makes them wonder why they are hiding.

When people are thinking of making a purchase, they often wonder, “Who is behind this company? Will they support me if I have problems or need support?” That being said, there is good reason for this concern. Some companies don’t always offer great support, and this lack of support only gets worse as companies grow.

But this can actually be a great advantage to you. As a small startup, you can offer customers something that most big companies cannot offer: a direct line of communication with the founder and a team that cares. Believe it or not, many customers prefer this to working with a large corporation.

Resist the temptation to act like a large, faceless company and instead embrace who you are. If supporting your customers is a priority to you, the best way you can put customers’ minds at ease is by showing how you approach support, and introduce your business and team. A little e-introduction can go a long way.

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8. Avoid investing in paid marketing too early

As you iron out the details of your product in the early stages, it’s important to have conversations with customers and tweak your product based on their feedback. This will also give you time to figure out who your audience is and what kind of messaging they respond best to. It is typically not a great idea to invest money into paid marketing or advertising until you reach product/market fit. Otherwise, you may end up just throwing your money away without seeing any results.

Once you have a healthy number of paying customers and your website conversion rate is decent, you can start focusing on paid marketing. That way, you’ll know that your business is in a healthy place and can convert a reasonable number of visitors coming from paid traffic sources.

9. Find the metrics that matter most to your business

These days, it can be tempting to be pulled into the world of “vanity metrics.” Whether that’s the number of visitors you receive or a certain number of press mentions, it’s important to separate important metrics from vanity metrics. While press mentions may feel nice, pay attention to the metrics that really move the needle and will grow your business.

The most worthy metrics are different for every business; however, some important ones might be conversion rate, churn rate, and monthly revenue growth. Keep a spreadsheet of the metrics that have the biggest impact on your business and update it every month. This will help you track what’s working and what needs improvement. It will also help you identify problem areas right away, so that you can fix them.

When you follow these steps, you can base your decisions off of data rather than hype or emotions. And you can be more certain that your efforts are being directed to the right areas of the business.

10. Create a repeatable process

Once you have your first few paying customers, create a repeatable process that can be scaled as you grow. Since you have proven that a certain method works, take some time to record your processes, documenting how you found your customers. Then focus your efforts on the most efficient channels and find ways to scale those channels.

If you got your first few customers via your blog, find ways to create more meaningful content or contract out the work to replicate the process and build it to its full potential. If you are able to automate a step or two of your process, think of ways to make it happen. These efforts make take some time to do  upfront, but the future savings will be worth it.

11. Find a sustainable routine that works for you

As entrepreneurs, we value freedom of time more than most. It’s what often puts people on the path of entrepreneurship—not wanting someone else controlling our time. Feel free to try out different work routines until you find one that works best for you.

For example, maybe you enjoy working a few long days to finish up an important project, but then you need a few days to relax afterward. Or maybe after a major revenue milestone, you want to take a vacation. As an entrepreneur, you can take advantage of this creative flexibility and reap the benefits in terms of your productivity. There’s nothing wrong with having an unconventional schedule, and, in fact, you should take advantage of the fact that you can now manage your own time. It is part of the beauty of being your own boss.

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About the Author

Post by: Hannah Wright

Hannah Wright is the founder of SaaS Design, a destination for Adobe XD and Figma templates and UI kits for tech companies looking to speed up their design process and iterate quickly.

Company: SaaS Design
Website: www.saasdesign.io

The post 11 Steps to Validating Your Startup Idea appeared first on AllBusiness.com. Click for more information about Guest Post. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

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