How to Validate Business Idea Using Prototypes

Reading Time: 5 minutes

Idea validation is essential before investing resources and time into executing a product or business idea. It includes testing the idea against the reality of the market to decide its potential success. There should be three levels for validation: product, market, and organization model.

Not all exceptional products or business ideas do well after being executed in the real world. Revolutionary ideas like Pets.com and Google Glass were full of potential but dramatically failed within a few months. 

On the other hand, multiple enterprise ideas that contain true innovation and guide to the beginning of revolutionary services or products are often met with doubt at the start. Airbnb – an enterprise that’s $75 billion worth was initially dismissed by numerous investors who didn’t believe in this idea’s worth. 

So the question is, how can you assess if the business idea is worth the investment and effort of execution and even if it’ll be eventually successful? 

The answer is simple- Validate the idea first. 

The more out-of-the-box and complicated your idea, the higher the requirement for ideal validation to ensure your latest innovation threat is worth it.

Different Levels of Idea Validation

To ensure your idea is worthwhile, you’ll be required to validate it on the following three main levels:

Product Level

Product level highlights validating the request for your product or company idea and its overall feasibility. 

It includes evaluating whether the product idea can be seamlessly created and if it fulfills the requirements of its target audience. 

Market Level

Market level emphasizes the awareness of the market and finding a quality way to enter the relevant niche. 

You should thoroughly evaluate your target market to find existing competitors and interpret their weaknesses, market share, and strengths. 

This way, you’ll have the opportunity to find the market gap and find the best way to enter the market. 

Organization Model Level

This level focuses on figuring out how you’ll earn money from a product or service and identifying the top revenue generation opportunities.

At this level, you’ll survey numerous ways to make a balanced profit from your product, contemplate potential marketing strategies and partnerships, and test various pricing models that can overall provide the idea’s financial stability. 

How to Validate Business Idea- a Step-by-Step Guide

1. Assess Idea Internally

The initial step to validate an idea is to figure it out internally or within your organization. At this stage, your idea should pass the desirability, integrity, and feasibility filter. 

To find whether your idea has potential, look closely at the way it resonates with your company’s goals and values and whether it aligns with your vision and mission. 

To settle its feasibility, evaluate whether it’s possible to function. This involves ensuring you have the right resources, workforce, and skills to make it happen. 

To determine your idea’s desirability, review how it fits along with your current services or products and your business strategy, and if your target market wants to pay for the product. 

2. Conduct User Research

The next move in the idea validation process, and foremost the most essential one, is to identify whether your idea truly aligns with the desires and requirements of your target market. 

Does the idea solve any existing issue in a better way? Does it point to your target market’s conflicts, and does it fit with their expectations? 

To understand the answer to these significant questions, you’ll be required to conduct user research. 

At an in-depth level, you must validate the hypothesis by actually conversing with your target audience. You can interview people who pass your ICA or ideal customer avatar. Arrange the appropriate questions, form a list of interviewees, and assign resources for this procedure. 

After finalizing the interviews, examine the data to find out if your hypothesis was precise in the first place. If that’s the case, move to the next step of validation. If not, fix your idea to correspond with what you understood from the respondents or interviewees. 

3. Conduct Market Research

Initiate your market research by scrutinizing your competitors. Identify them through customer surveys, research data, or any other online research. 

When you get to know your customers, you’ll need to dig as deep as possible into their marketing and branding strategy. Identify their value proportion, the features they’re providing, and the way they market the services or products. 

Always remember that your wanted audience can only be found in the presence of your competitors. 

If the competitors mainly focus on their SEO for their marketing then there’s a high probability your potential users will find your services or products through Google. 

This will let you test your predictions regarding your company model and modify it based on gathered insights from the market research validation aspect. 

4. Pre-prototype the Idea

To completely validate the idea, you will have to calculate your audience’s interest. A quality way to perform this process is through pre-prototyping-  collecting market data before completely developing your product. It’s using the marketing strategy known as “coming soon”.

You can implement this “coming soon” methodology after organizing market research and creating the product. The main goal is to find out how your customers would react to the final product by staging the landing page or running ads for the coming soon campaign.

Another method to enable this is by letting the users pre-order your product and allowing them to experience the checkout process to find potential points for improvement. It’s also an ideal way to validate the actual proce of product before the launch. 

5. Test and Prototype

The last and most crucial step of idea validation is the testing phase which comes before implementation. You’ve reached the prototype stage after doing all other sorts of validation. It’s the right time to develop the very first version or prototype of your product. 

By designing a prototype, you can initiate testing all predictions about the product. This will include undertaking various A/B testing, user testing, and technical testing. 

Doing this will let you determine any issues with your product early and amend them before the implementation. It will eventually help you form the MVP (Minimum Viable Product) you can continue improving. 

Concluding Thoughts

Accepting the fact that not all of your ideas will be appreciated by others can be distressing. After all, when we admire our idea, we become quite attached to it and unable to accept its failure. However, it’s impossible to implement every idea. It will help you save the team that would go wasted had you not initially validated the idea. 

Idea validation doesn’t entirely guarantee the success of any product idea because there are numerous factors involved, but it does lower the overall risk of failure. 

Certainly, people say there’s no profit without risk but when talking about expanding a sustainable enterprise and investing in creating innovative ideas, the fewer the risk, the higher the gain.

PureLogics has 18 years of experience in prototype development services. We’ll collaborate with you to develop a better understanding of your business goals through prototypes. Give us a call and turn your imagination into reality! 

<p>The post How to Validate Business Idea Using Prototypes first appeared on PureLogics.</p>