8 Questions to Ask to Validate Your Product or Business Idea
When inspiration strikes, it doesn't always strike gold. Ideas for a product or business should be proven worthy before spending loads of time and money putting plans into motion. Here are eight simple questions you can ask to validate your product or business idea.
1. What problem are you solving?
If you can’t quickly and clearly describe the problem that your product or service solves, then you probably need to go back to the drawing board or further develop your idea.
2. Have others tried to solve this problem? How did they succeed or fail?
History is a great teacher. Study those who have attempted to solve this problem before you and figure out why they succeeded or failed in their mission.
3. Can you clearly state the key features of your product or service?
If you can’t clearly describe the key features of your product, you haven’t given it enough thought. You should be able to do this easily before moving forward with an idea.
4. What sets your product or service apart?
Try to think of all the things that make your product or service different. List as many things as possible. If you’re merely offering something that’s already out there without a fresh spin, why would anyone choose your product or service over a competing product or service?
5. Who are your competitors?
This one goes hand-in-hand with #4. If you have no competitors, that could be the sign of an untapped market. If you have competitors, that could be the sign of a healthy market, but one that may be tough for a startup to break into. Study your potential competitors, make a list of their strengths and weaknesses, and figure out where you would fit in.
6. Who is your ideal customer?
Be specific. Start with a general demographic, but then focus, refine, and zero in on the exact persona that your product or service will be targeting.
7. How big is the market for your product or service?
If you discovered in #5 that you have no competitors, you better hope that’s the sign of an untapped market. Because the alternative is that the market is so small that no product or service within the market stands a chance of making any money. You must have a rough idea of how many people want or need your idea — and what they would pay for it.
8. Have you done a SWOT analysis?
A SWOT analysis can help you determine the strengths, weaknesses, opportunities, and threats involved in a potential business venture. It’s recommended that you perform a SWOT analysis early on in the process, as it will show you whether or not your objective is attainable and help you focus and refine your approach to completing that objective. The SWOT, however, may not work for every company or project (in some cases even hampering performance), so alternatives to try are the growth-share matrix and the Porter five forces analysis.
READ MORE FROM AMERICAN COMMERCIAL CAPITAL
If you're a Houston-based entrepreneur who has been searching for ways to improve your business cash flow and get the capital you need to grow, chances are you've come across a dozen Houston factoring companies who all claim to be the answer to all your problems. Invoice factoring, for those who don't know, is when a business sells its accounts receivable (invoices) to a third-party company at a discount. Factoring helps prevent business cash-flow problems by allowing a business to get paid on invoices immediately rather than wait the typical 30 to 90 days to receive a client payment. This eliminates cash-flow restrictions and helps small businesses stay ahead of the game and grow to the next level. Read more
This week, Marie Forleo offers advice on getting started right now instead of waiting for the right moment, Brendon Burchard reveals strategies for following through on your goals, and Gary Vaynerchuk and Erik Wahl (author of The Spark and the Grind) talk about creativity in business. Plus, Evan Carmichael presents Y Combinator president Sam Altman's Top 10 Rules for Success and the guys behind Hard Money Bankers lay out five steps to launching a new business. Read more
This week's roundup of great videos for entrepreneurs and small-business owners includes Gary Vaynerchuk and Tony Robbins discussing a range of topics, Marie Forleo suggesting that you should probably stop comparing yourself to others, and Brian Tracy outlining what exactly makes a successful salesperson. We also have Ben & Jerry's CEO Jostein Solheim discussing "conscious capitalism" and mega-successful restaurateur Cameron Mitchell sharing some excellent advice for all entrepreneurs. Read more