How to demonstrate the value of your startup idea
At the heart of every successful company is a great idea. However, just having the right suggestion isn’t enough to ensure that your business is going to flourish. Before you can take the step from theoretical into actual, you have to demonstrate the value that your idea will add to people’s lives. In other words, you have to able to answer the question: where are customers going to come from?
It’s possible to do this before going to market. After checking company name availability and incorporating your business, you should spend some time considering the niche that you will actually fill in your intended marketplace. One way to do this is by building a landing page. It can be a simple template with a call to action, which in turn can allow you to quantify how many people are converting based on the information you provide. Once they provide their information, you can collect data about what they’d be willing to pay for.
In fact, it doesn’t even have to be this technological. An article in Inc. Magazine detailed an even more low-fi way of finding out what people think of an idea.
“Moreover, it’s possible to learn from potential customers, even if you don’t want to spend money building a landing page. Weber worked with one group of founders who went to colleges and stood in front of dorm rooms. He interviewed a few hundred students, and persuading them to sign up to receive an email. It was old-school market research, in other words. But it was something tangible,” explains author Ilan Mochari.
For these early customers, it’s a way to get in on the ground floor and let their voices be heard about a product that they’re excited about. For you and your business, it’s a great way to get early feedback about how viable your idea is, and which directions you should take your company in during early stages. Using this data, you can move towards your first prototype.
This refinement process can help you find your niche. It’s important to note that the role you play might not be the one you initially set out to fill. Take, for example, Avalanche Energy, the winner of a lean startup competition in 2013. The startup offers a way to collect solar energy that is unique from anything before it. It eschews the use of photovoltaic cells and is just the size of a satellite dish. Their potential market is massive: anybody who pays energy bills could use this sort of product to reduce their expenditure.
What they found when they spoke to customers was that addressing a simple, particular need was better received than a product that can do everything. So while their solar solution has many possible uses, the one that resonated most with potential consumers was simple: saving money on hot water heating costs without requiring a lot of time or energy. It was this clear, actionable goal that allowed the company to build out its market.
At the end of the day, businesses are only as successful as the customers they are able to draw. Even if you have an idea whose intrigue is impossible to dispute, it won’t make much of an impact if people aren’t excited to try it. Before you move forward, take some time to think about who is going to be eager to be a consumer.