Startups are coming up, by the numbers today. If you are thinking of chucking your job and salary to work on your great idea, ask yourself some questions before you take the plunge. Is your great idea good enough even in this slow economy? Is it a profitable idea and are you keen enough to implement it? What is the ROI that the plan promises?
Well, there’s no way to know if you will succeed. There are some ways one can prepare for the transition. The first idea is to test your idea, and improve it. Here are some ways to validate your idea before you even invest a shilling.
Scope out your industry.
Find the best industry that suits your style and talents. Mobile app design and tech-savvy companies are in vogue but that does not mean that you should take the plunge. You can work in wellness or even baked goods but you should be good enough to scope out from the industry. Check out the web and the local agencies for more information and the market interest in recent years. You can check out great market research results too.
Size-up the competition
Study your competition thoroughly in any industry. If you are opening a restaurant, check your immediate competitors based on location, cuisine and the like. Check out their USPs and their audience demographics. Go into stealth mode to check out articles written on them and the services that they provide. Learn about their alliances, networks, suppliers, and their employees. You need to understand your competition to do much better than them.
Second-guess yourself about the idea
Check if your idea is viable and then double-check it. Ideas are sometimes great but the implementation plan matters. Sometimes the idea is successfully executed and then the growth gets totally out of control. One needs a plan consistently and a considerable amount of capital set aside because one is solely responsible for personal liability for all activities of that business.
Focus on problem more than the solution
Whenever we find difficulties, focusing more on specific solutions than the primary problem is erroneous because one has not defined the problem clearly yet. To clearly articulate the problem is the first step. And to do that you should write down your problem in simple statements. For example:
- Once the customers leave the shop, it is impossible to follow them up.
- To decide which customers will turn into prospects before they actually do, is very difficult
You already have the basic idea of your difficulty but if you find it complex, you can refine it until you can articulate it within one sentence.
Collate answers from professionals to check on the problems and to determine next steps
Collate answers from different professionals who have experience handling startups successfully and then arrive to a conclusion or a sense of whether the problem will be big or just a “nice to have” one.
After 20+ conversations, one gets an idea of how the problem can be solved and the problem will appear smaller than usual. Either you ape a company process, or a strategy or just outsource the problem, it is important to get an idea from experts and other professionals who have been there, done that.One should speak here in a general manner and present solutions to the problem whether it is specific to you or not.
Look for pain in existing solutions
You really need to identify the pain in the market and whether your idea can be the solution to the problem. What is the missing ingredient in your strategy that is a USP and poses a clear benefit to potential customers when comparing your product to others.
If the clearly articulated problems being experienced by at least 20 people, then there is a sizeable opportunity to solve that problem in a better or easier way. Instead of asking “which product do you use to solve that problem today?”ask how they handled it, because they might not use a specific product.Remember, there are other companies too that are facing the same problem and trying to solve them, assuming at least one of the existing competitors is doing well (has traction, has raised money, has been around for a few years and is growing, etc).
Verify budget for a solution
- You can track other companies that are facing the same problems and observe if they are growing fast, if they have sufficient number of customers and how much money they are raising.
- In most (not all) cases, that’s a great signal they not only have a good product, but are making revenue and finding paying customers and it means that someone has a budget allocated for products like theirs (and yours).
- After talking to at least 10 prospects on the phone about pricing, you want 5 or more to say yes to pricing. Not to a specific price, but yes to actually paying for your solution when it’s ready.
The huge caveat here is to have someone to tell you that they will pay for your product in no way, shape or form means they will. But it’s a good start and I can assure you that it will stop you in your tracks for at least 50% of your ideas — if you have more than one.
Use prospects to define your roadmap
Assuming you solve a major problem that enough people need a solution for, you now have a sizeable audience. Keep getting their feedback and ask about how beneficial it is for their lives. Some of them might become your first customers.
To proceed with your startup, you can talk to your prospects, chalk out an integrated plan with features, designed wireframes, and the like. Keep a short feedback loop and you now actually understand that you can work the idea into a startup without spending a dollar to this point.