Startup idea validation - why you need it and how to go about it

Ronen Menipaz


When you have an idea for a startup, you’ll think of countless things, especially if this is your first try at building a business. Numerous entrepreneurs start to dream of greatness, about countless customers and subsequent dollars stuffed in their pockets – sometimes without even acquiring their very first user. 

I know this is true because of the alarming rate of startup failures. That’s why there is a little something called startup idea validation – a process of verifying an idea to determine its viability by showing there is a market need and willingness to pay for it.

In other words – to make sure there is a connection with real people so your startup doesn’t end up as another statistic in the ‘fail’ column.

Why startup idea validation is critical to startup success

Even smart people have bad ideas because coming up with a good startup idea is tough. Having a seemingly good idea and liking it very much is vastly different from someone actually buying it. A good chunk of prospective startup founders believes the key to success is coming up with the initial idea, and then executing. It’s not. If it was, startups wouldn’t pivot at all.

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Startup idea validation is about two things:

  • Identifying a market need
  • Mitigating risk

Startups typically operate in highly competitive and uncertain markets – part of the reason why the failure rate is so high. Startup founders need to be extremely careful about the steps they take to launch a company and should absolutely validate startup ideas before dreaming of stardom. Knowing how to validate your startup idea is essentially the closest thing to proof that your grasp of the niche, knowledge, expertise, and existing connections do really have a shot to success.

How to validate your startup idea

With an idea validation process in place, the idea (hah!) is to perform a systematic check for making your solution successful in the market. There are a few startup validation techniques you can use but do note that there is no guarantee of success – you can only boost your chances.

So, here’s my idea of a startup validation model:

Focus on the problem, not the solution

There are steps to take before starting the actual testing, and the first one is to ensure the problem you hope to solve really exists. 

I know this sounds obvious but apparently, it’s not obvious enough. There are dozens and dozens of reasons why startups fail but by far the top reason why that is so is the lack of market need. In 42% of cases, tackling problems that are interesting to solve as opposed to those that serve a market need is the primary reason for failure.

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In that spirit, you want to clearly outline a problem that either you (ideally) or others experience. Focus on fixing things that seem to be broken, even if the problem looks like a tiny one and insufficient to build a startup on. If you pursue such a storyline, it’s hard NOT to end up with a scenario where you actually have something of value to offer to people. When you do, there’s a startup in it for you.

Uncover pain points in the existing solutions

It might seem contrary but solving a problem where the competition is already established verifies there is a large enough market to exploit,  assuming at least one of the existing competitors are doing fine. 

Analyze the current problem-solving process to uncover space for a tangible benefit your target audience can spot and understand. You can use this benefit as a central element in positioning your product or service during launch. 

See if you can develop a value proposition

After getting to know the problem and the way it’s treated at the moment, the next step in the idea validation process is to try and come up with a value proposition. That’s your first true test – to outline exact benefits users can get from your solution as opposed to what’s already on the market. 

Focus less on features and more on gains a customer can expect from using your solution. A value proposition can be anything, from something quantitative like less time spent or more revenue to something qualitative like having a more encompassing solution or relieving a specific pain point. 

It’s not about being different for the sake of variety in the eyes of potential customers – it’s about being visibly better. If you can’t pinpoint your value proposition, take a step back and try to figure out what you’re missing.

Build an MVP to get feedback

At some point, product development will be inevitable. You will need to go out and live test your idea. With a minimum viable product (MVP), you can validate buyers, as well as get an answer on how to validate market demand.

Start small by focusing on essential features only and fail fast. That way, you accomplish two things:

  • Not wasting time and resources on features no one will use.
  • Serving a part of the solution (what customers need to achieve the desired outcome) by doing things that don’t scale while automating the rest.

The trick is to create core functionality and grab attention with something that makes life easier and better (even if it’s not completely what you had in mind) so you can have a guide for future development.

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What about startup validation tools?

There are certain tools that can help you on your way. I’ve never paid much attention or ever used one myself but that’s no reason to dismiss an automated and streamlined way to map out, keep track of, and test your validation notions. The Validation Board and Validation Canvas are the two most popular tools but you can also take a look at IdeaCheck, Javelin, or check out resources like The Lean Validation Playbook for in-depth information.

Final thoughts

It has never been easier (and cheaper) to build a startup than now due to easily accessible global talent, growing startup investments, constantly increasing remote working (especially with coronavirus in the mix), and so on.

It also means that a large number of ideas get their undue realization. As a startup founder, you have an obligation to yourself to follow your vision. However, as an entrepreneur, you need to be objective and clear-headed to come up with something people will want to buy. You can’t control how your vision develops in your mind but you can control the circumstances around it. 

That is why startup idea validation is vital. It won’t eliminate all your problems but it will certainly minimize the risks you take.

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