Startups can sound like great ideas on paper, but the minute they start coming together, they might end up looking at a lot worse than you initially thought. Review 42 states that an estimated 34% of all startups fail operations within the first year of opening, and 90% of them close totally without achieving their goals. One of the ways to avoid falling into this trap is to validate your startup idea. Even professional businesses like Pharr Road Animal Hospital used similar principles in determining their profitability during their initial startup phase. Here, we look at the steps a business can take to validate that their startup has a good idea going for it.
Use Small Scale Testing
Startups have a benefit in that they don’t need to “go big or go home.” Instead, they can focus on a sub-segment of the market and target them specifically to see if it might make sense reaching out to the rest of the market. Small-scale testing usually helps businesses refine their minimum viable product into something that consumers want.
Sort Pricing Out Later
Many businesses swear that pricing has a crucial role in the success of a business. This understanding is valid for a complete business model, but for a startup’s minimum viable product (MVP), it’s not necessarily what you want to spend all your time on. If you get favorable pricing and no one’s buying your product, you essentially waste your own time.
Prioritize Action Over Research
The Lean Startup Methodology notes that many businesses stop being actionable once their MVP makes it out the door. Unfortunately, without proper action to back up research, a company is likely to collapse. Validating your startup idea needs to have action to back up its research.
Expect Product Evolution
An MVP is the first iteration of your product. Don’t hold onto it as the be-all and end-all of your product development. Instead, see it as what it is – a stepping stone to build on. Don’t be too surprised when your MVP starts evolving into something customers want. The result is offering a product that customers want, and the MVP might look nothing like it initially did when it starts gaining traction.
Build Repeatability Into your Process
Repeatable processes are an easy way for businesses to make money. Repeatable processes that can be scaled are the ideal type of development a startup needs to be looking at. Make a note of how you found your first few successful clients and learn how to recreate that success. The bottom line of many giant companies today came from a similar practice when they were just conceived.
Validation Of an Idea Sets you On the Right Path
Validating a startup’s idea is just starting a long process of making it a dominant market force. It may seem like a challenging prospect at the start, especially in competitive industries. However, businesses with validated techniques just have to learn how to repeat those simple techniques repeatedly. Eventually, the business’s growth starts snowballing as the company’s reputation grows.