Ask HN: How do you validate a business idea?

https://news.ycombinator.com/item?id=17164591

by aalhour • 8 years ago

25 13 8 years ago

news.ycombinator.com

Hello HN,

I am not a business expert and I don't have any economics background so bear with me on this one. Let's say you have an idea for a new business or product and before start building it, you'd want to validate it. How would you do that? How would you know that the idea might fly? How would you research the market to see if it would fit?

I apologize if my questions are vague, I don't know what would the starting points for this topic be.

Thanks!

kjksf• 8 years ago

This question has been asked a thousand times.

On reddit: https://www.reddit.com/r/startups/search?q=how+to+validate+i...

On IndieHackers:

* go to https://www.indiehackers.com/ * click the search icon in the upper right * type "how to validate idea"

Those 2 sources will give you hours of reading.

My short answer is that if you have to validate an idea then you're doing it wrong.

A good idea is a solution to a problem that you noticed. Maybe because you've had this problem yourself (e.g. "I was trying to share a screenshot with a friend but there was not tool to do it easily") or maybe because you noticed that other people have a problem that you can solve using your programming skills.

Lacing any additional context to your particular situation "validating an idea" conjures a situation where you came up with a solution first and then started thinking "is this a solution to a problem that someone actually has"? Which is backwards.

If you want to learn more about how to improve the skill of noticing problems, read "The Mom Test" (https://blog.kowalczyk.info/dailynotes/note/b4u674cvj43jdajd...).

danieltillett2• 8 years ago

While I agree with you that starting with the idea and then trying to find a problem is backwards, starting with the problem is fraught with issues too. Unless you are working in the industry you want to target it is unlikely that your problems are either common or serious enough to make enough people fork out money to make a viable business.

Identifying good business problems to solve with technology is very, very hard. Almost all the ones you can identify are too small, too trivial, or illusory.

anoncoward111• 8 years ago

Set up a landing page website and/or discord chat room, make a youtube video and some reddit posts showing off your product, and offer it for free to anyone who visits.

then, offer a paid version with some extra features and explain to those users exactly what their $5 a month or whatever will pay for (5% to fees, 13% to aws, 27% to your personal pocket, etc)

muzani• 8 years ago

Set up a website for your proposed product. Describe what it does, post up some screenshots. Have a sign up page. When they get past a certain point put up a payment error message, or tell them that the product is limited to a selected group only.

If it's B2B, just do a PowerPoint presentation and try to sell it before you build it.

danieltillett2• 8 years ago

Have a look at the checklist I use for my own ideas [0] - it might be of some help.

0. https://www.tillett.info/2016/01/27/a-good-idea-checklist/

niko0012• 8 years ago

A lot of people will suggest building a landing page / MVP to gauge initial interest, but I would start even before that: Don't spend any more time than necessary on something that you don't even know is actually viable.

However, you need to find out if potential customers are excited about your idea. To find out whether your target audience is interested in your idea, I suggest the following validation process:

* Write down a) the problem you're trying to solve and b) your solution. A lot of ideas may sound awesome while they're in your head, but that might change once you transform it from an abstract concept into 2–3 sentences.

* Create a questionnaire based on your idea. Make sure to ask questions relevant to judging whether your idea might take off, such as "How often are you facing this problem" rather than "Have you ever faced this problem". Use a tool like SurveyMonkey or Typeform to put your survey online.

* Identify people in your target audience. This is hard. Don't simply email the survey link to your friends - because of something called "Interviewer bias", your friends will rate your ideas more favorably than the general public. Also, it's highly likely that your friends aren't actually in your target audience.

I run IdeaCheck.io[0], where we generate a questionnaire based on your idea and use a panel of respondents to gather direct feedback from your actual target audience. You can read more about IdeaCheck in my Indie Hackers interview[1].

[0] https://ideacheck.io

[1] https://www.indiehackers.com/businesses/ideacheck-io

aalhour• 8 years ago

Thanks for sharing, I like IdeaCheck, I will shoot you guys an email for some ideas I have.

niko0012• 8 years ago

Thanks, aalhour, let me know if you have any questions!

vinrob92• 8 years ago

Start with value.

Before thinking about validating your idea / researching your market etc ask yourself "What value am I providing to the world / to the market?". Value is fundamental to your business because you, as an entrepreneur, get paid for putting that value into the hands of your users / customers.

Your role as an entrepreneur is to shift resources from a lower area of productivity to a higher area of productivity (example: Instead of 100g selling coffee beans for $1, you buy a cup and a coffee machine and sell a cup of coffee for $5, you successfully created value). You get paid for creating value, and you get paid for identifying market needs and delivering that value to the customers.

When something goes wrong with your business, always think about value: "Am I delivering value to users"

Next step, about validating, I would also advocate for a MVP (or in the case of a product a MVO: Minimum Viable Offer). The role of a MVP is to seek the shortest path to deliver value to customers. In other words, it is to validate your assumptions so that you can justify the time / financial commitments to build an actual or better product. The MVP is not about your product, it's about validating your value proposition.

AznHisoka• 8 years ago

You do the dirty work of contacting people in that industry, asking questions about their problems, and listening (without pitching your product)

That might involve a lot of cold emails, Linkedin Inmails, Skype calls, coffee meetups, stalking in conferences, joining relevant meetups, listening in on online forums, tweeting people who tweeted about that problem, etc.

Then you might a friendly group of 3-4 people who might give you friendly feedback as you develop the product. Keep talking with them. Keep iterating.

Thats really all there is to it. There are no “hacks” and no shortcuts. Just work.

gesman• 8 years ago

Once I put product on sale before creating it and directed ad traffic to it.

I refunded first 4 orders with apology.

But I had detailed statistic of traffic and conversion rate.

Idea was validated.

rocLv• 8 years ago

Actually，the president of YC answered this question in the course of startup schools. I remembered he said several principles or questions, such as "why now?", "why you?",etc.

jiveturkey• 8 years ago

by raising seed money

Ask HN: How do you validate a business idea?

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