How To Validate Your Business Idea
4 FUNDAMENTAL QUESTIONS THAT MUST BE ANSWERED
How do we avoid spending time, money, and effort on products and services that won’t succeed in the market?
How do we test ideas and validate our thinking in order to ensure that our products and services will stand out from what the competition offers?
I want to show you 4 fundamental questions that can help validate not just your brand, but new products and services as well.
One of the first components in launching a business or new products/services should be to always assess the current competition and then validate ideas using the Brand Formula. If you cannot pass this test, the steps of which we will go through below, then you must stop and reassess. Ignoring this test will likely lead to a failed product or service, or worse one that makes just enough money to keep the lights on and you in a perpetual state of thinking that your big success is just around the corner.
All my clients do this as part of the essential first steps in our Brand & Positioning Strategy workshops. Testing ideas for new businesses, as well as products and services, first means avoiding shiny objects that seem like a great idea but are neither good or different when compared to what already exists.
This is why doing brand, positioning and marketing strategies are so essential. Not only do they inform each other and help create a system that is more effective. They also keep the brand focused on how it is building value and loyalty with customers in its own unique way and not get distracted by what the competition is doing.
Let’s not jump down the rabbit hole. Before we start, and really dive deep, let’s ask ourselves 4 fundamental questions.
The first of which is are you servicing an unserved tribe?
A common mistake is to think first of the product, rather than the unserved tribe. Thinking about products or services that we want to develop rather than want a customer needs. A slight change in our thinking that radically changes the results.
The impact of focusing on a product or service rather than the customer will inevitably lead to a crowded marketplace. This is a common location for the majority of businesses today. Constantly fighting with other businesses over the same customers rather than looking to the edges of the market to find the customers that are not having their needs met.
If you cannot say with confidence that you are building a brand, product or service that targets an unserved tribe then you have no reason to continue down this path. Stop and think more thoroughly about your positioning.
The second question is are we presenting ourselves as a commodity? Or are we different? Have we found an area that is unique?
Radical differentiation is truly one of the last remaining methods of building something special. There are just too many businesses existing to develop something that does not excite your customers. As Seth Godin writes in Purple Cow you won’t be successful by being “more bland then the leading brand”.
So what can you be more of?
Can you develop a brand, products or services that are more surprising? That takes the statement ‘surprise and delight’ literally?
Are you able to be weird enough that people talk about you and find what you do to be remarkable?
Can you develop a user experience that is truly fresh and breaks away from the industry norms that fog over our empathetic and creative thinking?
Are you courageous enough to create processes that moves away from what the competition does and design something offbeat?
And, finally when consumers look at our brand, products or services do they think that our approach is unique or much the same?
The third question is simple, does your product/service have benefits that are obvious from the customers perspective? Is it good?
Understanding the unique benefits of our products and services is essential to being able to gain traction. It is worth noting that being good does not just mean attempting to create something that is ‘better’. It instead means that we use some criteria to assess accurately and identify our strengths.
Does your brand, product or services provide more value? Are the strategies that you use for providing access more effective? Are the experiential, functional or symbolic benefits noteworthy? Does the variety on offer attract those that would otherwise ignore and finally is the impact you are able to make worth mentioning?
Using criteria like this, and ones specific to your industry, is an effective way to accurately assess the benefits from the customer’s point of view. Creating a brand, product or service that is actually good is a guaranteed method of making sure you stand out from the competition.
The Fourth and final question is assessing if you are leveraging a trend for growth. Are you on the rollercoaster that is a fad or are we leveraging a trend for growth?
Utilising trends to propel success forward is a highly effective strategy, it uses growing markets to your benefit. Better yet we can compound that benefit through using multiple trends.
Trends are developments and changes that affect the behaviour of people. Some popular trends at the time of writing this are Mindset, Entrepreneurship, Side Hustles, Online Learning, Influencers, Time Saving, Remote Work, Instant Comms, Eco Friendly, Blockchain, and Early Retirement just to name a few.
Being able to leverage trends will attract consumers that are already interested in working with brands that have the same beliefs, attitudes and values that they do. It is a component of modern day marketing where consumers identify with who you are.
These 4 questions will provide you with a critical analysis of your idea for a brand, product or service. These questions will test ideas and validate thinking. It will ensure that our products and services will stand out from what already exists. When used successfully we will have confidence that what we develop will service a real need in the market, will stand out by being good and different and will be set up for long term success by leveraging a growing marketing in the form of a trend.