Idea validation checklist
Is your idea worth pursuing?
Here are a few things to consider when deciding whether you should pursue an idea. Remember, it takes the same amount of effort to develop a bad idea as it does to develop a good one. So be selective.
1. What’s your idea? Start by clearly defining what your idea is about. If you can’t explain it in two sentences, others may have trouble understanding it, so spend some time refining it until it becomes clear and concise.
2. What problem does it fix? Here’s another point where being concise is important. The more people experience the problem your idea solves, the more likely you are to succeed. There’s also the case where, even though a problem might only affect a small portion of the population, if your business model is highly lucrative, this may matter less.
3. How is this problem being addressed now? What does the current process look like? Are there middlemen in the supply chain? Think how Amazon made book buying cheaper and easier. Think how iTunes made music buying cheaper and easier. How does your idea make the current process cheaper and easier?
4. How many direct competitors are there? A bit of an obvious concern. The more competitors, the tougher it will be to stand out. If competition is unavoidable, think of ways in which you can dodge some of it by tweaking a few things about your approach.
5. Will it be cheaper than existing solutions? Very important. Coming up with a new way of doing something that can already be done more cheaply is going to make it really hard for you to gain traction.
6. Will it be easier than existing solutions? Similar to #5 above but a bit less important perhaps. People may trade higher pain for lower cost but it depends on the degree of added pain and the resulting savings. The safest thing is to come up with something cheaper and easier.
7. How does it make money? Very important unless you are in the business of building databases that you can later monetize. Explain how you are planning to make money. Of course, keep it realistic by making sure that: a) whomever will be paying is willing to pay; and b) the price point makes sense.
8. Does your idea disrupt an established supply chain or model? Uber disrupted the taxicab business. Airbnb is disrupting temporary accommodation. Email disrupted the postal service. Is your idea disrupting an established industry? Which one? When disrupting established models you could be faced with litigation and other setbacks. Be sure you are ready to deal with this with enough money and lawyers.
9. Is this a regulated sector or industry? Regulated industries are tougher to get into. This is why MOOCS are having a hard time disrupting education, 23andMe is having a hell of a time dealing with the FDA and healthcare disruption is only happening on the fringes, closer to fitness than medicine. If you’re trying to disrupt regulated industries, arm yourself with patience, lawyers and enough money for a long runway.
10 . What is the total size of the market? Unless you can get celebrity endorsements or bloggers to talk about you, it will take time for your idea to penetrate a small portion of the market. Make sure that the total possible revenue you can expect to make is big enough to make things interesting even when you only own 1% of the total market.
11. How would you let people know about the new offering? “Build it and they will come” is not only oblivious and naïve, but it’s a detrimental to say the least. Be realistic about what you are going to do to let people know about your shiny new thing. This is your marketing strategy.
12. What other advantages do you have? Are there other advantages you have that would make you a better provider of your idea? For example, do you have experience in the field you are trying to play? Do you have any special knowledge that is hard for others to obtain? In this particular point, keep in mind that knowledge can be acquired (or hired) but direct experience or connections are harder to replicate.
(Photo by Melanie Jacques www.melaniejacques.com)