You have an idea that you think has the potential to be a very successful business. Time has been invested; money has been invested, and you even presented the idea the some of your friends and family members. They assured you that your idea has great potential and that you should pursue it.
The questions that you should ask yourself, is there a market for my business idea? Have I spend enough time researching competitors with similar products? We see this happen all the time on popular TV shows such as Shark Tank. Entrepreneurs come on the show with great concepts but have yet to validate their startup idea.
I once had a great idea to develop an Ipad app for car sales agents. Helping them quickly show their prospective clients of new deals on cars through the app online and offline. Sales agents would have the ability to use the app outside of the car dealership to generate leads by just having casual conversations. I was very excited about the idea, and everyone told me that the app has great potential.
So my goal was to build a prototype as fast as possible. I booked some meetings with some of the car dealerships in town, and wanted to present and pitch my product. Only to find out that there was another big company that dominated the market in sales applications for car dealerships. The only difference between my product and their product was that sales agents would be able to use my app offline due that it was a native app.
They also have most of the car dealerships across the country as clients, and they could have easily crushed me by only implementing that offline feature. I quickly knew that my intention to help car sales agents was great, but there was no market for my app. They already dominated the market.
I learned a valuable lesson that day. Take the time to research all the areas of your business idea. I’m glad that, at this time, I was already using the Lean Startup methodology, and did not invest any money on it. Only my time to create a graphical prototype for the presentation.
Here are 3 key steps to follow.
Research to see if there is a need in the marketplace for your product. Find out what your competitors are selling. Are they selling the same product? or similar? Analyze their social media accounts and what their followers saying. Reading online reviews is also a great way of measuring demand.
2. Sharing your business idea is not a bad idea.
Many people make the mistake of keeping their business ideas a total secret. Being afraid that someone might steal it. I advise the opposite. Share your business ideas. There are many ways that you can share your idea without giving it all away.
3. Put your ideas to the test.
It’s very easy to test your ideas these days. Use tools that allow you to create functional prototypes. I recommend leaving the actual code development until later in the process. For app products, I personally use Photoshop and Field Test App (http://fieldtestapp.com) to create a functional graphical representation of what your product will look like.
After you’ve completed this process, take real orders. Show potential customers and try to sell your product and get orders in. By getting real orders you can measure if customers are actually interested by committing financially.
My final piece of advice: Make sure you’re not stuck with your idea without verifying if there is a market for it.