5 Steps to Validate an Idea With Paying Customers in 30 Days
Want to start a business? You need to validate your idea first.
Most studies on failed startups report that an average of 90 percent of entrepreneurs fail within three years of beginning work on their idea.
Whether you're building your business on the side or going the route of investor funding to back your big idea, the fact remains that failure is a very real possibility.
So, how do you reduce that risk of failure? By validating your idea with real, paying customers.
Why Most New Entrepreneurs Fail
Put simply, most first-time entrepreneurs don't go about validating their business idea before rushing to market with their product or service.
It's tempting to take your initial idea, run with it and start manufacturing your product overseas from the factory you just met on Alibaba. To head down to the camera store and pick up the best video equipment you can afford to get started with making your first online course that everyone's going to love.
To start your blog with a bang by signing up for lightning fast hosting and hiring a Wordpress developer to get the custom features you know you're going to need once you soon have a ton of readers.
I get it because I've made these mistakes myself in the past. I've invested thousands of dollars into business ideas that ended up going nowhere — because I failed to validate them first.
To begin the process of validating your idea, stop and ask yourself these questions immediately:
- Am I doing this in some small way already? If not, why?
- Who else actually needs this product or service?
- Is this something I really care about personally, or is it a pure market opportunity?
- Would a sizable number of people be willing to pay for this?
- Can I connect and empathize with the people who'd be using this?
- How can I be sure that there's a real, paying market of customers for this before I begin investing in building the business?
This last question is by far the most important — and we'll answer it by validating your idea.
Last year, I set out on a public validation challenge to show my readers just how easy it can be to validate an idea with real paying customers in less than 30 days, even while working a full-time job.
Here are the lessons I learned from that experience.
5 Steps to Validate an Idea in 30 Days
As you go through this process of validating your idea, keep in mind that any positive feedback you receive (especially from friends and family) should be taken with a grain of salt. Paying customers is what you need in order to truly validate.
1. Create an Early Feedback Group
Craft a simple elevator pitch that explains your idea in a way that highlights the value your customers will get from the product or service. Build a list of the people who are closest to you that seem like realistic candidates to be interested in the idea you want to validate.
Think: friends, family, co-workers, people you used to work with, former classmates, anyone you've personally met that could potentially become a customer for your business in the future.
Share your elevator pitch with them and ask if they'd be interested in getting update on this project — don't just ask for general feedback, your goal at this stage is to build a small group of people who've expressed interest.
2. Interview Your Audience
Individually, begin asking your small feedback group questions that relate to your idea and the pain points they have within that topic area. Start with questions like:
- What are you looking to achieve (as it pertains to this topic area)?
- What are some of the current solutions you’re using, or have used in the past?
- What frustrates you most about those solutions?
- Would you be willing to pay for a solution that does XYZ for you?
Record the answers that come in and take note of how many people are showing a real interest in this idea, the further you get into your conversations with them.
3. Find What Makes Your Solution Unique
After listening to your feedback group answer your questions, what does it feel like their biggest pain point is when it comes to the problem your idea is going to solve? What's your biggest opportunity?
How are competitor solutions falling short on that promise? Develop a list of the most common complaints your audience is telling you about them. Therein will lie the biggest clues as to what your competitive advantage is going to be for your business idea.
4. Create a Proof of Concept
In most cases, all the hype in the world won't get your feedback community excited enough to hand over their hard-earned money. You need to build a very lightweight, simple proof of concept that can illustrate the basic solution you're working towards.
A proof of concept can come in many different forms, including:
- Google Doc outline
- Blog post
- Explainer video
- Hand-built prototype
- Simple product sales page or website
- Rough demonstration of your software solution
- Email or email newsletter
It's important that your proof of concept not be a polished solution — your goal is to invest a minimal amount of time and effort into it before learning whether or not your community gets value from the direction you're heading in.
5. Launch and Get Pre-Orders
This is when your idea really gets put to the test. Start by asking a handful of the people who've been most engaged throughout this validation process if they'd be willing to pre-order your solution (usually at a heavily discounted price) while you continue building it.
Keep the communication 1-on-1 to show that you genuinely value their feedback, rather than using an email marketing service that takes away the personal touch. Gradually roll your pre-order offer out to the rest of the people in your feedback community and see how many pre-sales you're able to get.
Want a jump start on this process? You can pick up all of my pre-launch email templates to help validate your idea quicker right here.
If nobody buys, the next move is yours to make. It could be that your pre-order is priced too high. More than likely though, you're either attempting to solve a problem that isn't really there (or worth paying for a new solution to) or you're not doing an effective job of selling — and communicating the value they'll get.
Continue tweaking your pitch, poking holes in the areas of your proof of concept that could use improvement and approaching different types of people. Keep going until you've either validated your idea with paying customers or determined that there isn't a real market for this solution for now.