A few weeks ago I had two friends reach out separately telling me about there ideas. I got us all on a thread for fun and in the flow of the conversation generated a concise todo list for vetting startup ideas. If I had some guidance and this simple todo list I can’t tell you how many countless hours, days, months I may have saved . NOW .. for some folks out there you may look at this list and say .. duh. Be patient with us creatives and techies.
Without further ado my “3 Startups Later” todo list to vet your startup idea.
- Identify What Your Market Is –
- For non “business by nature” folks like myself simply Google with your best guesses until you find the right market name, eg “Competitive Intelligence Market”, “Lead Generation Market”, “Online Travel Market”, “Retail Analytics Market”. This might take a while but identifying the correct market(s) narrowed down is critical.
- Get the Dollar Value of Your Market Size –
- Google “Your Market Size” . Typically you’ll find a wealth of information. I’m imagining you are starting this business because you want to make money. If not you probably can disregard my list! If you are I can’t stress something that so many folks including myself overlook without proper business guidance. The size of your market is directly tied to that potential payout. Are you looking to make a million , twenty million? If your market size is 100 million or 100 billion will make a huge difference. If the market is really small and saturated you may want to reconsider your idea.
- Identify the Who and the Why – Who is your product for and why will they want to pay your for it?
- Unlike most startups Phylum didn’t start with a who and a why. We started as a bunch of geeks who’d built an aggregation engine for events, realized we couldnt bootstrap a free B2C app and but knew we had a strong piece of software. While we knew the software was powerful and could be re-purposed we had no idea who to target or how we should package it. In my experience this is the worst place to start from. Expect to spend months or years doing product development and shifting based on your audience but with no clarity it will be painful. If you have a clear problem you are solving for a specific group of individuals life will be SO much easier.
- Validate how much your audience really needs your product –
- Google your audience’s message boards. In our case with MarketMole, our competitive intelligence platform, we designed it with comprehensive capabilities for enterprises but we also have a light version targeted for SMB and drop shippers. There’s a ton of great information on youtube and reddit for this audience.
- Research Competitors Extensively –
- If you truly have an idea no one is doing and a clear market that will give you an upper hand. In my experience there are usually at least a few competitors in a similar space. Go on Owler and Google around to see who the players are. Be practical and honest with yourself after looking at how much annual revenue the pull, how far along are they(how many users or enterprise clients).
- Validate how much your audience will be willing to pay –
- This can be tricky but you need to get a dollar amount tied to it. If you have to, call a competitor and pose as a client. I can tell you that advise came to me from every adviser I’ve had. It seems a bit hokey but everyone’s doing it kids.
- Differentiate your product offering in a way that your competitors can’t just repeat quickly is key to being able to play in any market. The challenge of a great idea is knowing there is a clear need and knowing how to build that capability before competitors do.
- Define a Growth and Acquisition Strategy –
- Before you write a line of code I can’t stress how important it is to have a rock solid attainable plan for how to get your product out there. With MarketMole we built this sweet polished product with a few beta clients over the course of a year, no sales team and no formal growth strategy only to officially launch and watch it sit without traffic or awareness for several months. From a team perspective I personally believe a strong growth hacker is possibly the most valuable asset a team can have. What good is your product if you can’t get anyone to notice it?
- Find the right team –
- The biggest mistake I’ve made repeatedly is trying to take too much on myself. Its critical to know what your team needs and find the right people. Stay tuned for the continuation of this article focused on knowing who you need on your team and initial kickoff steps.
The Bottom Line:
If you’ve validated you are in a strong growing market, its not saturated(too many existing players or a few very strong players), you have a clear differentiated offering with a clear audience, you’ve got a great idea. Now its time for the hard part .. make it happen ; )