Have you ever been told, ‘ideas are cheap, execution is everything’? I am pretty sure that most of us must have heard of it.
When I first started my career, I never really believed in this saying. However, after experiencing a few failures in my entrepreneurial journey, I now live by this mantra.
Why? Everyone can generate an idea. Try asking anyone you meet on the street. But, not everyone can execute them.
These days I cringe whenever I am told by inexperienced VC investors to prepare a solid business plan or a pitch deck, and practice my ‘storytelling’ to effectively sell my vision and dreams for my fundraising campaign.
Gone are the days where a compelling elevator pitch would land you a term sheet offer from top tier VCs. With more than 75% of startups or new businesses failing every year, the ‘game has changed’.
With such staggeringly high failure rate in the startup scene, we now can no longer secure a meeting with top tiers VCs without a functional MVP, growing user traction, early product-market fit (that is still being refined), early numbers (such as, key metrics, KPIs according to industrial benchmark, revenue, etc.), and of course, a realistic and sound business plan.
In our team, my co-founder and I will always conduct a Research Sprint (designed by GV, formerly Google Ventures) on ideas that stemmed out from our discussions, before proposing to our team for a full team discussion or implementing our Design Sprint (again, by GV) exercises.
Therefore, I am recommending you to read Nicolas Bélisle's article, 'How to validate a market for our product?', to encourage anyone who has been inspired by an intuitive business idea to validate your market before kickstarting your un-tested ideas.
Trust me, first validate your market. Measure. Learn. Then, act. You would not regret it.
(Two cents’ worth from Paul at Flipidea)
You should validate your market before starting to build a product or service.
I have said it.
One of the biggest banality ever.
But it will surprise you how many companies dive headfirst into developing an MVP or a new market before validating the idea they have.
Whether you are a startup, a small business, or a corporation, validating a product idea should be of the utmost importance before embarking in a target market.
The goal is different, of course, while startups want to build their MVP, SMEs and Large Enterprises want to see if their product would be a good fit for a new market in terms of features and price point.
The market validation process allows you to “hit the ground running” because:
- for startups: you will have a product market fit for your MVP (minimum viable product)
- potential clients will already know about your existence and that your solutions can solve their problems (I will explain how to do this in the few lines below 👇) so they will be ready to buy
- you will save time and money on trial and error experiments, money that you can invest in Marketing and Brand Awareness
So, how do you validate your business idea and, consequently, the market?
You have to talk to your target audience.
It is as simple as this.
However, there are cemented practices in place that make this simple task look insurmountable such as:
- companies do not listen to their current clients
- companies do not invest in creating accurate, and useful, client personas
- companies follow the HiPPO “highest paid person’s opinion”
Yes, I know you have heard so much talking about “client personas” by self-appointed marketing and UX gurus that you can not stand it no more.
The problem is that the most common practices have it backwards. You do not have to create 1,000 personas to satisfy every need of the market.
You need just a couple of user personas:
- the buyer of your service/product
- the user of your service/product
A lot of times these two personas differ. You have to entice one and convince to buy the other.
That is it.
And what do you have to do to create personas?
Talk to your target audience.
Now let us look more in details in the steps you should follow.
- Define the assumptions you have towards the market
What do you think the market needs? Who do you think you should talk to? In which position do they work? In which industry?
- Find out where the “watering holes” are and how many people aggregate there
You need to know where your potential customers aggregate and how many they are. Be it a social media platform or a physical meetup. For instance, LinkedIn is a great platform for B2B companies.
- Divide your audience in two
One will be your test group on which you will examine your assumptions (i.e. is X a problem for you?), the other will be a control group to whom you will ask general questions (i.e. what do you think the market needs?).
- Find the best way to reach out to them
We have found LinkedIn as the best channel to reach out to our target audience and we have developed our streamlined method.
- Ask why as many times in a row as possible
You need to get to the root of the problem. Many “surface problems” may come from the same deep-rooted problem but have different manifestations. You have to be like a doctor, you have to cure the disease, not the symptoms.
- Ask them if they want to be contacted once the product is ready
- Compare the answers from the two different groups
Did they give you the same answers? Are the problems the same? Are their problems the same of your current customers? Are the marketing channels the same?
- Build your MVP (if you are a startup) or make the fine tuning necessary to your existing product or service