Why you should validate your business idea?

Why you should validate your business idea?
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When you’re about to launch your startup it’s reasonable to create a minimum viable version of the product first and check how it will work, so that you can analyze whether your product is of interest to an existing target market. Actually, that’s the main question you need to understand – why you should validate your business idea. And here it’s better to make some research first. Syndicode as an experienced Ruby on Rails MVP development agency can show a number of reasons for this, so this article will be a useful reference for anyone who has a business idea or wants to launch something revolutionary and brand new.

“The biggest risk is not taking any risk… In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”– Mark Zuckerberg

Market validation involves a lot of work in your target market, and it almost always happens before you invest in your product. We recommend you to start with the MVP (minimum viable product), as the best way to launch your app as fast as possible and save money by reducing the development time.

How many unicorns are there? Or ‘who took the risk and succeed’

History shows that there are success stories of businesses that once existed only in the minds of their creators and now millions of people use it in their everyday life. To inspire you first, we collected some of the most promising online startup companies who shine in this Internet era, the ones who risked and survived.

  • Taboola, founded in 2007, by Adam Sigdola. The company is now one of the best content marketing platforms on the internet. They started their idea validation once by talking to their friends and understanding their needs first. With the number of only 120 employees, it has managed to get high profile clients like BBC, USA Today and Boston Globe. It creates a web widget to content creators on their website with links to similar posts, videos, and photos. Now it seems not original, but back in 2007, when digital marketing only gained its importance, that was a huge risk.
  • Prismatic, founded in 2010 as a news aggregator app startup. Creators made an experimental website… and it worked! Now they have 25,000 weekly users and $16.5 million of funding. The Prismatic is the service that can tell what topics people are interested in and whom they may want to follow. With its help, you can read and look at the suggested articles and photos as well as share content to those topics.
  • Kahoot!, founded in 2013, by Johan Brand, Jamie Brooker and Morten VersvikIt is a game-based learning platform that can be used in different settings, in classrooms, offices, and at social events.  All players connect and use a device to answer questions created by a teacher, business leader, or another person. It was launched in private beta at SXSWedu in March 2013 and the beta was released to the public in September 2013. In September 2017, Kahoot! launched a mobile app for homework and has raised $26.5 million in funding. Impressing?
  • Linkfluence, founded in 2006. This is a social media intelligence company that analyzes conversations on social networks and on this base can create business opportunities for brands. The company began as an extension of an academic research project, that led to the first visualization of the growing influence of social media on public opinion. Now company owners have the possibility to know what others say about their brand and use this to improve their messaging. Their total funding amount is $46.5M. 
  • Getaround, founded in 2010, by Sam Zaid, Jessica Scorpio, and Elliot Kroo. The startup that allows you to rent a car you’re not using and share it with some of 200,000 Getaound members. The founders started to validate the idea by renting their own cars to the neighbors. They also provide with the option of opening the car door without using a key. This startup idea already received $19 million USD in funding.
  • Airbnb, one of the most famous Rails projects out there, founded in 2008. This world-known American online marketplace and hospitality service provides millions of tourists with apartments and rooms. Anybody can host a tourist and earn some money. To validate how it all is going to work, the founders had to rent their own houses and go from home to home to ask people if they agree to host foreigners. Now, with 4,500,000 listings in over 65,000 cities in 191 countries, Airbnb offers the widest variety of unique spaces for everyone, at any price point around the globe. It has $2.8B in estimated revenue annually.
  • TripAdvisor, founded in 2000, by Stephen Kaufer, Langley Steinert, Nick Shanny, and Thomas Palka. You know it too! This is an American travel and restaurant website company that shows hotel and restaurant reviews, bookings, interactive travel forums, and other travel-related information. “We started as a site where we were focused more on those official words from guidebooks or newspapers or magazines. We also had a button in the very beginning that said, ‘Visitors add your own review’, and boy, did that just take off.” – one of the founders tells. In 2018, the company incorporated a delivery service, DoorDash, into its restaurant listings. The company has raised a total of $3.3M in funding.

These are examples of good ideas that were executed only after the processes of testing and validating prior to launching their business name, tagline, product, service or website. Believe us, idea validation will save you a ton of time and money.

By the way, these startups have one more common principle in the core. They all have embraced new technologies and hacks available those days. Do you want to know what innovations can grow your business and save money in 2019?

Idea validation. Why you should validate your business idea?

If you still have doubts about validating your business ideas, let’s look closer to the reasons why you actually need this.

First of all, what is an idea validation?  It is the process of gathering evidence around different ideas through experiments and practice to make fast and clear decisions. The purpose of this process is to try the idea in the real world before building the final product and launching the online marketplace or a website. Here are the 6 points why you should validate your business idea.

The idea validation reasons:

  1. Reduce the risk of launching the wrong idea = test if the idea works
  2. Idea validation lead to the creation of valuable service in the market faster
  3. Minimize costs
  4. Prove that your idea has real demand
  5. Help to see if the timing is right
  6. Prove that you can sell the solution efficiently enough

Why you should validate your idea? Syndicode software development

To make the process of validation even more useful, don’t forget to validate solutions on every phase of your process. There are aspects that you should keep in mind. For example, can your idea stay consistent or does it require new knowledge and skills? Being attentive to such details can make you go far beyond your initial expectations.

Ways to validate your idea

Here we are coming to the point of an idea validation process. Syndicode knows this by heart. There are several ways to validate your idea. We are sharing with you some of the most effective ways that went through the most experienced and thriving companies.

  1. Define your product concept.
    Here you are deciding what exactly you want to test. These are your assumptions and ideas and the most important things to test before launching your product. In this stage you need to ask yourself questions like:

    • Who is your customer?
    • What problem you are trying to solve?
    • What are the main features of your product?
    • How are your products solve the problem?
    • How does your pricing model work?
    • Is your business model scalable?
    • Collect all your ideas regarding your product and prioritize the most critical for your business to succeed. Work on them and ask us about discovery session so we could help you with development.
  2. Use the experience of trusted entrepreneurs.
    It’s better not to rely on the friends and family in this matter. Especially if they don’t have experience in this field. We recommend finding a business consultant. And as they are usually very well networked, It would be good to find an expert within your niche that can help you determine the best type of business to start.
  3. Search for your potential competitors in the niche.
    Analyze their business model and their work. You can use their best practices and eliminate the risks they overcame while building your business model.
  4. Explore your market and customers.
    You need to talk to people you want to be your customers. Visit the places they go more often and explore the territory. Ask questions, try to find out what types of products they use, what products they like buying, what blogs they read. If it’s difficult for you to reach your potential audience, join Facebook groups and watch what most people talk about. Ask questions there.
  5. Use Google Trends.
    That’s a tool you can use to understand what trends are the most popular within your niche. There you can find out everything about growing, lowering, tendencies, strategies and seasonal trends for the past year. Usually, the trends have a tendency to raise on some holidays, but you can explore that in details. Despite, there are many similar services, Google trends is free and might help you worldwide.
  6. Make competitive research.
    Try to write down detailed research of the number of followers. social media pages, rankings, brands, time people spend on the websites in your niche. That’s how you can make some predictions concerning the money you can earn.
  7. Contact people from your niche.
    Use your LinkedIn account to find key people within your niche, contact them and suggest a meeting. Their role is utmost important in gaining your new experiences.

MVP as a real-world simulation for your product

There are two great advantages that the concept of an MVP can give to your idea validation:

  1. Understanding what users need
  2. Using a minimum of engineering days for validation

By creating an MVP you can validate your idea by building the most basic set of features to turn your idea into a working product. MVP allows you to test how your product works as quickly and cheaply as possible. In order to start a great company quickly and efficiently, you probably need to prove your idea and build an MVP. But remember that the more you distract, the more you are spending extra time and money on a product that nobody wants. Write down all your ideas and consider building them into a release based on feedback. Or, contact custom software development company, so professionals can do that for you.

Working prototype advantages

While prototyping means creating an incomplete version, a minimum viable product is the smallest, most concise version of your product you can initially release for feedback. You can actually use it and discover the ways how you want to accomplish it.

  • MVP has enough value that people can already use or buy.
  • It demonstrates enough features that would hook and retain early adopters.
  • MVP provides a feedback loop to guide future development of your product.
  • It shows sufficient future potential to attract and retain early customers.
  • With implementation tentative results, MVP guides future development so developers would know how to continue with their ideas and have a clear vision to build what is actually needed.

There’s no correct way to build an MVP or to validate your ideas. What works for one product won’t necessarily work for another. But MVP development can help you to minimize the risks with the new project. Of course, there are too many questions about right assumptions, essential features, ways to develop and so on. Syndicode has compiled for you 9 famous services started from MVP that you use every day.

Here in Syndicode, we create a wide range of software development services for different business needs. We can provide high-level UX design, frontend, and backend development for your MVP. Moreover, we will help you with defining the most important features for your minimum viable product and decide on the optimal technology stack. All of these are the parts of MVP professional development provided in Syndicode. Go to our portfolio page to see our level and approach and find out why Syndicode can be considered as MVP development agency.

You can also wonder why to hire Ukrainian software developers? But that’s another big topic we are suggesting you study.

And remember – you really need to be interested in your business concept. Otherwise, you shouldn’t even start it. The best business ideas come from your strongest areas of interest. And when you find it, don’t hesitate to risk.

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