Founder Institute, an American business incubator, entrepreneur training, and startup launch program organized a workshop and a networking event titled: How to identify a viable business idea and launch your startup. I attended it together with over 400 attendees from around the world. These are the most important takeaways.
Focus on the problem you’re trying to solve
The problems that startups are trying to solve can be directly linked back to the current needs of our society. It was pointed out that at the beginning of a startup journey, things should be simplified and a startup should not aim to solve more than one problem at a time.
What a startup should do is find a problem and come up with an innovative solution for it. In order for a startup to be successful, you need to answer two questions: 1) What is the pain point or problem that you are solving? 2) How are you going to solve it?
If your product is not giving the customer a beneficial outcome by solving a problem or easing a pain point, it means you’re looking to create a market rather than serve an existing one. Creating a product and then having to create a market for it is beyond what startups should be doing with their limited funds.
Validate before building
The idea validation process allows you to check if your business idea is a feasible one and detect flaws in it before spending time, money, and effort on going further. A properly validated idea will secure your startup investments and most investors are looking for at least a minimum viable product (MVP).
A minimum viable product (MVP) is a version of a product with just enough features to be usable by early customers who can then provide feedback for future product development. An MVP is not supposed to be a fully completed final product, but rather the fastest way to create an actual minimal customer-facing product. It enables the product team to test if there’s a real need for this type of product and how much people are willing to pay for it.
Methods to validate an idea before building it
There are several methods you can use to validate an idea before building it in order to save precious resources such as time and money.
One of the best ways to learn about your product is to ask someone who has or would use it. From understanding customer demand to building your market strategy, interviewees can help you determine if your new business idea will work. You can learn what they think about your idea, product, or service. It helps you understand what customers think and need when making purchasing decisions about your product or service, so you can make updates or changes before launching.
You’ll want to interview the people who will be interested in buying your product. Toward this end, you’ll want to think about your target customer demographics, like gender and age group as well as financial status and personal interests among other things. For more information on creating an ideal customer profile or in this case interview profile, find here.
The ‘Concierge’ MVP
The Concierge MVP is where you use manual processes in order to gauge interest in the service, before building the automated version. It provides more personalized and human-centered service, rather than relying on automation although the building of the product still needs to happen at some point. This not only saves development time but also allows for direct feedback from early customers, allowing for a deeper understanding of their needs and whether the product meets their demands. One successful example of a Concierge MVP is an online personal stylist who originally set up a business in her flat. The first orders were personally assembled by a stylist to see if customers would pay for this kind of fashion advice. As the company has grown, it now uses algorithms in combination with stylists to achieve results at scale. Read more on Concierge MVPs here.
The Piecemeal MVP
The Piecemeal MVP is a term used to describe a development approach where a product is launched in stages, with each stage introducing a small set of new features or functionality. This allows a company to get feedback from users early on and iterate quickly, rather than building out a large product all at once and then releasing it.
The Piecemeal MVP approach is often used for software products and can help a company to validate its ideas and identify which features are most important to users before committing to a full-scale development effort.
Build an audience first
To create a profitable business, there are two basic models that can be followed. The traditional method involves creating a product first and then finding customers to buy it. The second method is an audience-first model, which involves finding customers first by building an audience with content marketing, then solving their problems with a product that addresses their needs.
There are several reasons why is it important to build an audience before you actually launch a product:
- It allows a company to gather feedback from potential customers and make adjustments to the product before it is officially released
- This can lead to a better product that is more likely to be successful
- Building an audience beforehand can also help generate buzz and anticipation for the product launch, which can lead to increased sales and a larger customer base.
- By having a built-in audience, a company can also have a group of people to market the product to immediately upon launch, which can help ensure that the product reaches the right audience and resonates with them.
How to identify a viable business idea and launch your startup workshop and networking event by Founder Institute was an event I really enjoyed. I learned valuable lessons and have met some great people with interesting project ideas who I plan to stay in touch with for future brainstorming sessions. I will watch out for future similar events by the same organizer.