You Have an Idea for Something Big. Are You Brave Enough to Test It?
You have an idea for a startup or side project. You know it's brilliant, but you don't know where to start. Try validating it first.
Here’s what you’ll learn in this article:
Let’s get something out of the way: ideas are cheap.
You can have the best idea in the history of humankind and it won’t mean anything unless you bring it to life.
So what do you do if you have a brilliant idea on your hands? Do you tell someone? Do you get to work building it? Do you pay someone to build it? Do you apply to shark tank? What about taking the idea to investors?
Slow down, tiger. Your first step should be to validate your idea.
Don’t Get Paralyzed by Fear
Having an idea is one thing. Sharing that idea out loud is another entirely. But you can’t build the business of your dreams if you don’t share it first. There are all kinds of fears that could be holding you back, so let’s dispel some of them:
“What if someone steals my idea?”
I hear this all the time. The reality is no one is going to take the time, energy, research, testing, dedication, or anything else it takes to bring an idea to life. Building something from nothing is extraordinarily difficult. You need to be passionate about it and have the drive and persistence to make it happen.“Someone is already doing it”
So what? That might actually be a good sign. In a large enough market, there should be room for multiple businesses. If there’s not, then the opportunity probably isn’t big enough in the first place.“I just don’t have the time”
This is such a b.s. excuse. If you were really passionate about your idea, you’d make the time. And if it’s as brilliant as you say it is, it sounds like it will be worth the time.“What if it doesn’t work?”
Don’t let fear of failure hold you back. Is it better to never know? And even if it doesn’t work, at least you tried. But that’s the thing about ideas - some will stick and some won’t, so you should be willing to test as many as it takes.
Don’t let fear of failure hold you back. Failure is a big part of entrepreneurship so you need to get used to it…and even embrace it.
There is another approach to coming up with an idea that is much more pragmatic - and much more useful: starting with a problem.
Your Idea
It’s important to not get emotionally attached to your idea. Although it’s possible your idea could work out, chances are it won’t. Let’s clarify: your idea might be a starting point, but by the time you validate it, build it, and grow it, it could look completely different. That’s why instead of going after a single idea, you should be trying to solve a problem instead. Before we cover that, let’s talk about your idea.
When someone tells me they have a startup idea, it tends to fall into one of these three categories:
A better mousetrap (aka, a feature, not a business)
Designers are especially guilty of this because we’re actually capable of improving the user experience of a product. For example, someone might have an idea to create a ‘better’ Airbnb by allowing guests to earn ‘frequent traveler’ rewards and stay for free when they accrue enough. This is definitely a cool idea, but it doesn’t really solve a bigger problem. It’s a feature, not a business. Airbnb could probably build and launch that in a month if they wanted to. And although your idea might be useful, it’s not a business. There’s probably a reason Airbnb hasn’t done this already: maybe the economics didn’t work out (meaning they’d lose money), or there just wasn’t enough demand for it.Something anecdotal
If your startup idea is based on a personal problem and you haven’t done the research to know if others are having the same problem, it may or may not be an idea to go after. For example, if your idea is an oversized doggie door because your dog keeps getting stuck in yours, you don’t know if that’s actually a widespread problem. Did you just purchase the wrong-sized doggie door? Is your dog overweight? What percentage of dogs are so overweight that they no longer fit through a doggie door? How many households even have doggie doors installed? See what I mean? (Sorry if your dog is overweight).Something unrealistic
”But anything is possible.” But if your idea is a hydrogen-powered flying car, and you don’t have a background in chemistry, mechanical engineering, and access to millions of dollars to build a prototype, I’m sorry, but it’s probably not going to happen for you. Not unless you’re secretly the next Tony Stark. But for the sake of argument, let’s say you were able to build a prototype - is there actually a market for flying cars? What about flight regulations and policies? Not to mention safety concerns. Do you want to take on that much risk?
There is another approach to coming up with an idea that I think is much more pragmatic - and much more useful: starting with a problem.
Start with the Problem Instead
To know if you have a good idea or not, you need to work backward from the actual problem. Then you need to perform market research to see if your problem is large enough to be an opportunity. Only then will you know if your idea is worth pursuing.
Is the Problem (Aka Market) Big Enough?
Even if you have a great idea - and even if you have proven people are willing to pay you for that idea - it still might not be a big enough problem. At the end of the day, for a business to thrive, there needs to be a market large enough to support it. If it’s too small, there won’t be enough customers to go around and growth will be slow or nonexistent.
Performing market research
Market research doesn’t have to be a complicated exercise. There are only a few important data points you need to assess whether you have a viable business idea. If you’re wondering what ‘market’ means, it’s simply the industry you would be working in. It could be Real Estate, Sales, Finance, or something else.
TAM (Total Addressable Market)
According to the Corporate Finance Institute, TAM is defined as, “…the overall revenue opportunity that is available to a product or service if 100% market share was achieved.” For the rest of us, that simply means: what is the size of the market, in total revenue per year.Competitive Landscape
Somewhat self-explanatory, competitive landscape is simply a competitive analysis of a market. Who would be your competitors, and how much market share do they have (how much revenue are they bringing in)? That will tell you if there’s room for you in a given market.Market Growth
Market growth refers to how much your market is growing year over year. This will tell you how healthy the market is and if you can ride the wave of an emerging industry.
…it’s important that you do not get emotionally attached to your product or business idea at this point in time. You might nail it the first time around, but chances are your idea will evolve…
Validating Your Idea
Now for the fun part: testing your idea in the real world. At this point, you’ve proven you’re in a market where there is room for growth and multiple, large companies. Now you need to prove that there is a demand for your product.
Remember, it’s important that you do not get emotionally attached to your product or business idea at this point in time. You might nail it the first time around (highly unlikely), but chances are your idea will evolve through multiple rounds of testing and iteration. And that’s ok! It’s just a part of the process. Remember, you’re not trying to build a specific feature, you’re solving a problem.
Start small
Scratch that, you should start microscopic. You shouldn’t even be building an MVP at this point. The goal of validating your idea is to spend as little time and energy as possible to find out what works and what doesn't.
You should approach this process with the scientific method:
Come up with your hypothesis
Test your hypothesis through experimentation
Analyze the data
Arrive at a conclusion
Repeat
As for the experimentation part, get creative! There are many ways you can validate your product idea. Here are a few of my favorites:
The painted door test
I love this strategy to gather early signal, but it may be hard to get paying customers this way. The idea is simple: test your idea by articulating the value proposition (most likely on a simple landing page). Then build every step of the purchase or signup flow and see how many people sign up. Don’t take payment yet since you aren’t delivering a product (that would be immoral). You can end with a waitlist or ‘coming soon’ message and retarget these people once you launch. If no one completes the flow, don’t take it as an immediate failure, you may just need to tell a better story.The (paid) waitlist
You could do something similar to the above, but end with an option for people to join a waitlist. You could even require a deposit. Any amount is fine, the point is that payment shows real intent. If your product costs $100, have them pay a $10 refundable deposit. Both Rivian and Tesla do this before their cars are in production.The MMVP
This isn’t a typo, I’m just emphasizing the ‘M’ for minimum because, with this method, you should build the most minimum version of your product, spending the least amount of time on it. In fact, give yourself a deadline of 48 hours. Use existing tools to hack something together and see if customers will A) use it and B) pay you to continue to use it.
Be aware of bias
Be wary of personal bias. Remove yourself and your beliefs from the equation. If you’re emotionally attached to an idea or test, it’s possible to massage the data to see the outcome you’re hoping for.
My Idea is Valid! Now What?
Congratulations! Acquiring a handful of paying customers is a big deal. You might be onto something. However, just because people have started to pay doesn’t mean you shouldn’t stop testing. A product is never complete, and something can always be improved.
Your first 10-100 customers are your most valuable. Why? Because they purchased v1 of your product. You need to find out exactly what led them to their buying decision. How do you do that? You talk to them.
Rinse and repeat.