The teams participating in our Lightning Lab Accelerators always start by putting their idea through the market validation process. We’ve already shared some insights into the pre-accelerator market validation course that our Lightning Lab Tourism teams undertook. But what does market validation involve? And where can you start to find out if your idea is worth pursuing?
How do you know if you’ve got a winning startup idea?
If you think you might have a winning startup idea, start by running it through a market validation process. Market validation is a very effective way to tell if your startup idea is worth pursuing in the first place and whether your product or service is of interest to your chosen target market.
The market validation process involves three core steps.
1. The Problem
Your starting point is “the problem”. What is the problem you are trying to tackle? While entrepreneurs often tend to be solution-oriented, the key to any winning idea is finding the right fit between the problem and the solution.
First of all, get to know the problem. If you don’t understand the problem well enough, and why it’s become a problem in the first place, it will be very hard to solve. Can you articulate the problem that you are trying to solve? Is that something big or burning enough to be worth solving? Would people be willing to pay for a solution?
Look for problems that are urgent, the ones where the pain point costs a lot to solve, is experienced on a regular basis and has a high physical or emotional impact. If you can find people that are experiencing this problem on a regular basis then you have found your customer market.
2. The Solution
So you’ve confirmed that you have a problem worth solving. Next, you should be testing whether people actually want the solution you are offering. When deciding whether your solution is something that is genuinely unique try asking yourself the following questions:
- Is your solution something that the customer with that particular problem would use?
- Is it something that they couldn’t get elsewhere?
- Is it a way of solving the problem that is better than what’s currently available?
- Would someone be willing to pay more for your solution than your competitors are charging?
This will help you shape your unique value proposition. Startups participating in our Lightning Lab accelerator programmes seek to develop solutions that stand out and are a worthwhile investment for their customers. They should also be hard to copy and deliver unique value that can’t be found elsewhere.
When thinking about your idea, make sure to consider its scalability. When you add up how much it will cost to create your solution, then deliver it through channels, including retailer margin, wholesaler margin, delivery costs, people costs, operation costs and then finally your marketing costs, is your idea still viable? And, has your solution or business model the potential to increase its revenue with minimal resource and investment?
If your idea passes the scalability test, then you want to start thinking what is the smallest, easiest way that you can get a prototype up and running, and reach out to customers.
Last piece of advice: dive into it!
Many people are afraid of even starting the market validation process. The idea of testing and validating an idea can be daunting, and the more time you spend sitting on an idea, the more attached you get to it.
Our advice is to think about market validation as a conversation, not a sales exercise. Go out, talk to people and ask them questions. Have fun working through the steps. People love to help and to be heard – your interviewees will give you some priceless advice that will help you move forward with your idea. No feedback is bad and it’s so valuable to know what people think before you’ve spent any money.
So take the leap – go out and find out if your idea can be the next big thing.
Keen to hear more? Sign up to our mailing list and stay in the loop with all the latest news from Lightning Lab.