Proving Your Concept Before You Startup
There are a lot more startup dreams than startup successes. Typically nine out of ten startups have failed within 5 years after opening their doors. This high rate of failure is due almost entirely to the lack of proof of concept for the prospective business or the product itself.
Too many early stage company founders have blown through their friends’ and families’ savings because they failed to adequately prove their concept. Dreams and hopes are the inspirational starting points for most startups but all the hope in the world doesn’t pay salaries or keep the lights on. This is why any innovative or disruptive startup must be fully vetted before the founders quit their day jobs. As a founder you must validate your product or service that you plan to offer well before you move the pinball machine in. Remember, there is a vast difference between actionable innovation and a cool idea. The question is: How do you validate your business idea?
Proving Your Concept – Four Questions That Need To Be Answered
- Does your can opener (innovative idea) already exist? – Research your concept fully. A few quick internet searches will usually let you know if someone already is developing or has developed a business concept similar to your own. If the idea for your business or product doesn’t exist go to #2 now.
If you are reinventing the can opener remember there are a lot of can openers in the world. Do consumers need another one? Is your can opener so innovative that it will disrupt the traditional can opener market ecosystem? Cracking a saturated market is tough, not impossible.
- Share With People Smarter Than You – Bounce your concepts off of some people other than your mom and best friend. Often friends and family won’t give a founder the feedback he or she needs. That is why mentors are so important. A good mentor will tell you if your idea has a valid value proposition for future customers.
You can also meet with someone from your local startup accelerator usually at no cost. The staff is there to hear ideas from prospective founders and help steer them through the many early stage hurdles that they will most likely face. They will give honest input about your idea, probably giving you more questions than answers that will ultimately have to be answered to demonstrate the viability of your startup.
- Give them something to touch! – Concepts are great but seeing and touching a vision is impossible. That is why a MVP (minimum viable product) is a must whether it is software, industrial, or consumer product. If you can’t produce a model or mockup then it is safe to say, in most cases, that your idea probably needs some thought.
You also need a MVP for testing purposes. Putting the product in other people’s hands will be one of the best ways to tell if you should continue down the product development path. Remember it doesn’t have to be perfect but it will provide you, your team, and potential investors with a visual and physical representation of your vision.
- Who is going to be your first customer? – Customer acquisition is often an afterthought in many startups. The “If you build it and they will come” mentality has caused the failure of many companies that had a very viable product to develop. You must determine whom your primary customer is and then how to market to them.
Getting this information together for the first go around doesn’t need to be an in-depth process. Your customer acquisition and marketing plans will be continuously evolving and growing as your company develops. Stressing the importance of these two elements for proof of concept can’t be overstated. For your company to grow and prosper it must have a solid, data-driven plan to acquire customers.
Helping to answer these questions is one of the many reasons RAIN Eugene is in Lane County. Our mentors are experienced in helping entrepreneurs build your idea into a traded sector scalable startup business. More simply, Rain Eugene and its resources will help you turn your product ideas into a successful business that benefits you and our community together.