How to Validate Your Product Idea
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Mahesh Murthy of Seed Fund said at a seminar, “We like startups that are looking to be a big fish in a small pond, rather than a small fish in a huge ocean.”
By this, Mahesh means that he prefers product ideas that appeal to a smaller niche market rather than a mass market of millions of people.
I see entrepreneurs who are chasing that big dream and are looking at building the next Amazon, or Google. However, many fail to realize that big ideas start small.
Amazon started off as an online book store, and today they are one of the largest online marketplaces for almost everything.
How to identify if your idea works?
Proof of concept is a term used by angel investors and VCs frequently. How do you know that your concept works? Well, you never know until your product is out in the market.
Some people do a market research where they ask a bunch of questions to figure out if the product is viable or not. The biggest problem with this is that you are asking people to imagine something that doesn’t exist.
Companies like airbnb would’ve never come into existence if they relied on market research.
Instead, I use a two-step check.
#1 What is this product trying to achieve? What does it do for the user?
#2 Identify if there are similar products in the market? How many times do we hear entrepreneurs say that their product has no competition? Even though many people think that their idea is unique, there are three other people who have already thought about it.
If there are similar products in the market and if people are already paying for it, there is proof of concept right there for you. It’s easier to sell sandwiches to people who are already buying them rather than educate people about something new.
Can you take a successful model from one industry and use it in another?
Sometimes, a great idea from one industry can be equally successful in another industry. There’re a lot of services marketplaces like urbanclap, StarOfService, and ServiceJoy that are similar to Amazon and eBay but in the services space.
In fact, there are several off-beats of Google that focus on a niche space. While Google is a general search engine, there are others that focus on specific categories.
Indeed is a search engine for jobs, if someone is searching for a job, they don’t need to browse every single job portal. They can just search on indeed to find jobs from all over the internet.
AdsWish is a search engine for classified ads.
Shopzilla is a great platform to search for anything related to shopping. It’s a great resource for comparison shopping.
Mulpix is a place to search for photographs that are posted on Instagram.
There are businesses that have taken an existing idea, tweaked it a bit, and made it their own.
Getting to market
The easiest and the fastest way to validate your idea is to get to the market with a minimum viable product as quickly as possible. I know people who have spent several years on a product idea, and by the time their product is ready, the market has changed dramatically.
Speed is critical in today’s information era because things are changing faster than ever before.
The fastest way to validate a product idea is to get a minimum viable product out in the market as quickly as possible. Paying customers and active users matter. Their feedback and opinion can be used to enhance the product.