4 Ways to Decide Whether You Should Pursue Your Startup Idea
It’s tough being an entrepreneur. Sometimes we’re struck with brilliant startup and product ideas during romantic dinners and sometimes the brilliant idea we scribbled on our girlfriend’s napkin isn’t so brilliant after all. If you’re an entrepreneur, you probably think of dozens of near-excellent ideas daily - in the shower, in the car, in the office -- constantly wondering if someone’s already developed an app for your very unique idea.
If someone didn’t, it’s probably not long before your excitement gets the best of you, and you find yourself already drafting your next startup’s mission statement in your head. But in a few months, you might stop and realize that you rushed into a startup that doesn’t have an explicit market need.
Unfortunately, this happens a bit too often. Or, to be exact, it happens 42 percent of the time. In this post, you'll learn four ways to test your startup idea before you ask your brother-in-law for that loan.
1. Check out the competition.
Your competitors are a great indication of the direction your startup should go and what aspects are lacking in the industry. First of all, if you have a viable direct competitor with active users, you know there’s a market for your idea. While healthy competition is always good for a given industry, knowing your differentiator is smart, especially if your rival is already very popular.
A good place to start is with features that competitor is lacking. For example, when Uber launched in 2009, there were many other startups eager to get in on the action. Lyft and Gett were some of Uber’s biggest rivals, but with Uber being extremely successful, they needed something to focus on that would tempt people to try its services as opposed to Uber’s.
For the Israeli startup Gett, this was the surge charges. Since Uber charges an extra fee during prime travel times, such as during morning and evening commutes, Gett decided to run a campaign called #surgesucks to differentiate themselves. In looking to improve on Uber’s flaws, Gett was able to establish a successful differentiating factor, helping them break into the business, and gain a significant following.
Leaping over to a different industry, Israeli startup Pepperi says it has identified a market opportunity in the CRM space for consumer packaged goods companies.
“We realized that traditional CRM vendors had neglected this space so we chose to focus on this blue ocean with a vertical-specific platform,” Pepperi CMO Oren Ezra said.
2. Conduct market research.
Now that you know what the competition is up to, it’s time to look into the market with the same level of scrutiny. Looking into the best methods, platforms and ways to gain exposure is the first step to making sure that your startup is on track to get the right exposure.
This is a great way to ensure that even before your product goes live, you have a leg up in getting your name out there.
Market research comes in many shapes and sizes: direct from the user, through agencies and even by running your own polls.
For example, you can create a survey asking if people would be interested in a potential product using Survey Monkey, and distribute it to relevant LinkedIn and Facebook groups. You can hold a focus group for group discussions to get real time feedback about what people think of your idea. You can also cold call, set up interviews, and poll people in target groups.
3. Try Google AdWords.
Today, we have everything at our fingertips: taxi cabs, movie tickets and of course, potential consumers. There’s a huge community out there, and it’d be a shame not to use the Internet to your advantage.
First, find $100.
Second, draft a few ads. Type out a few key features and the pain points your startup solves.
Third, link it to a landing page, mentioning that your product is launching within the next few months. Be sure to provide a space for them to leave their email address so if they’re interested, you can contact them once you’ve finally launched.
Last but not least, run the ads.
After a few weeks, you should see hopefully some telling results. Is Google giving you enough impressions? Are people clicking on the ads? Is anyone leaving their email address?
If you’ve answered yes to all three questions, then you’ve got your answer: You’re good to go. If not, I suggest tweaking the keywords, copy and landing page and trying again. If you’re still not getting positive results, well then, maybe it’s time to rethink your idea.
4. Test your product.
If you want solid market validation, obtaining a proof of concept is probably the best thing you can do. The results of a proof of concept will tell you whether or not it’s prudent to continue pursuing your startup idea. Startups looking to acquire a proof of concept will find it’s not always easy to find an enterprise willing to invest in the proof of concept acquisition process since it’s been known to be a complicated and sometimes risky process. However, finding pilot opportunities means companies can test new products and technologies that will turn into solutions for their expanding innovation efforts.
The process of testing a proof of concept, in turn, helps startups connect to enterprises to examine how well their product or service actually serves the enterprise. If you're in this stage, then you may want to check out Proov, a Pilot-as-a-Service marketplace.
If you're still not sure about your startup idea, then maybe your idea isn't meant to be brought to life. I'm all about following your passion, but if all of the above phases returned negative results, it may just be more logical to move on to your next brilliant idea.