You had a great idea that popped out in your mind, you are so excited that you are telling everyone around you about the idea! You are ready to quit your job and pursue your idea full time, because that's what trending, being a startup entrepreneur is cool and rewarding. But no one is agreeing with your idea when it's not materialize yet, people shooting you questions from different business perspectives and leaving you overwhelmed.
You have tried looking at different existing companies and case study to strategize how you would carry out the business but you cannot stop the voice inside you that still feels not confident, insecure, unsure of the plan that you have strategize. This is a new idea, new plan, new strategy after all. You starting to feel less energetic day by day, fighting the lonely war of bootstraping your business.
Yes, starting a business is hard but it doesn't give you the license to have business without solid direction for the first couple of months. If you have quit your job and pursuing your business idea full time, do this exercise. Write down your average monthly income (before you quit your last job) and multiply it with x number of months (depending on how many months that you have work full time on your idea and how many months more you are going to work on it). Let's say that your average monthly income is $5,000 per month, and you have been working for 3 months on your idea, and you will going to be dedicating at least another 3 months on it, that means $5,000 * 6 = $30,000. You are paying a cost of $30,000 if you don't solve the problem of drifting without direction and finding out whether your business idea could essentially work in the market, does anyone actually want your product. Not to mention, this is just the opportunity cost in terms of time, what about the other costs? Manufacturing cost, R&D cost, packaging cost if it is a real product, or design cost, marketing cost, engineering cost if it is a software solution. This is not the right way in burning money, at least not without a direction.
The truth is - YES, you can find out answers to those questions about whether you are on the right track in building your business, whether it's about the product you are building, does it contains the right feature or solving the right problem, is the price point correct, who is your customer, how can I reach my customer, WITHOUT having your product or solution 100% built. You can get confirmation from real people and real data, and through a systematic approach - learn what works and what doesn't before it's too late. And that's what the market call Business Validation.
When I started one of my logistics-related idea back years ago, all we are focusing are how cool the technology is, how people can now use our solution faster and cheaper, and how competitors using such old-school approach. We dived straight into building and it takes too long to realize that we don't have the expertise and resources needed to actually get logistics business in joining our platform. The product goes down the drain, because by the time we realised our problem, we already burnt through our runaway and had no resources at our disposal to solve the problem. Had we know it earlier, we would make it our first priority to solve that issue and deploying our resources accordingly.
But through failures, we learn, we improve, we iterate. And as we grow and grow, we found a systematic approach of validating and covering different aspects of business as comprehensive as possible, in order to minimize the risk of business failure and increasing the return of investment and success. And this is what I am sharing today, how to systematically execute your business validation, how to select which validation techniques to use and set a direction for my business.
There are in total 5 categories of business validation, and our post series will go through with you the concept of different validation together with specific questions that you can get from it, and even more valuable, 25 validation techniques that you can pull off with minimal resources :
- Problem Validation
- Product / Solution Validation
- Customer Validation
- Market Demand Validation
- Competition Analysis
If you prefer to read our whole series through ebook rather than pages of blog post (oops!), you can input your email here and we will send it to your inbox in 2 minutes.
What you'll be getting in the ebook :
- Right mindset to have while doing validation
- 5 categories of validation with specific answers to discover & questions bank
- Step by step how to select which validation techniques to use according to the outcome that you want and existing resources
- 25 validation techniques with to-do-steps and list of free resources
Now no more time to lose, click on the next post and start understanding the first step in doing a useful business validation.
p/s: If you are taking this business validation journey, share with us your learnings, your progress, and even your challenges! Include your business idea so we can understand your context better.