Startup Idea Validation

Strategies for Entrepreneurs - Series for Entrepreneurs #3

Article en français

If you have a startup idea, the first step is often to test it to see if it is viable. But how do you validate that idea? In this article, we will explore several approaches to validate your startup idea, some quite intuitive and others a bit less so.

Talking about your idea

The first step to validate your startup idea is to talk about it with people in your circle. Talk to your friends, family, colleagues, and even strangers. Discussing it allows you to receive feedback, criticisms, and suggestions. This can help improve your idea and make it more robust. Moreover, this step can also help you validate your target market and positioning. Indeed, if the people you talk to do not see the value of your product or service, it may be time to adjust your approach for your idea slightly.‌ ‌I can add that with every startup creation, I have always received feedback saying "it won't work," so you should take feedback but also let some go! ;) Test with small steps.

From prototype to MVP

Another way to validate your startup idea is to test it with small steps. Start by creating a simple prototype that does the job functionally, which will help clarify what you want to do with your product. This will help you focus on what is essential and what you believe will provide a solution to the problem you are solving.‌ ‌After the prototype, move on to the MVP (Minimum Viable Product). An MVP is a product or service with the minimum necessary features to be used and to validate your idea with end-users. It is a product that gets straight to the point without any frills. Beyond the functional aspect, the important thing here is that the product must be put into the hands of end-users. We have reached a stage where the product cannot merely be pure technology, even if it targets a technical population.

To illustrate this idea, I will share two anecdotes

The first concerns my startup Sémélé, which offered high-end teapots. I was so passionate about this project that I forgot to offer the product for sale! (oops) In fact, people did not want to buy it at the proposed price, which was a rookie mistake! The second anecdote concerns Ponicode, which provided a testing solution for developers. It was also key to take care of the product experience and documentation to facilitate its use within the MVP framework and not "simply" provide a technical product.

The MVP is often the key element in validating your startup idea. It is the most simplified version of your product that allows you to test your added value hypothesis. If your MVP convinces your target users, then your idea is validated, and you can build your product by adding features. RecastAI's MVP was a simple API; we provided an NLP (Natural Language Processing) building block. The traction was quick, and we immediately understood what the market wanted. The target did not buy per se, but usage is also an indicator of the validity of the idea.

Sell, sell, sell!

Selling is the best proof that your idea meets a need since people pay for it! Sell as quickly as possible. Once you have created your MVP, test it on the market. Your primary goal should be to find customers willing to pay. Sales are a key element in validating your startup idea, as it proves you have created something that meets a real need in the market. Sales are the strongest proof of validation of your idea. I know that some startups think traction or momentum is more important than revenue. This can work for a few with significant funding, but for the majority of startups, they must prove themselves through MRR (Monthly Recurring Revenue). The end of easy money has arrived; fundraising is more challenging with the current economic climate, which reinforces the need for validation through sales.

From the very beginning of Beamap, even with a very limited team, I offered the services we provided (Cloud Advisory) for sale. I even signed very large contracts while I had to recruit several additional people to carry out the missions! This experience confirmed the importance of selling from the start, even if it means facing organizational challenges later!

KPIs and team

Defining clear and measurable objectives is also essential for the success of a startup in the idea validation phase. To achieve this, it is recommended to set Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) objectives, use tracking tools, and regularly monitor progress. Be ambitious and even a little crazy when setting these goals. To take your team with you, aim for the moon to hope to take off from the ground! ;)

My companies had KPIs that everyone knew. Be it the number of users (usage), API calls (usage), or MRR (revenue). It is essential to define, measure daily, and share them with the team to create a common objective.

During this launch phase, strengthening collaboration within the team is crucial for a startup's success. To achieve this, encourage open and transparent communication, organize regular action-focused check-ins, and promote teamwork. I have worked a lot on this subject to innovate in management as well. This deserves an entire post!

Finally, it is important to emphasize that validating your startup idea is not a one-time, definitive step. It is an ongoing process that requires regular analysis and adaptation to market changes. It is therefore crucial to remain attentive to your customers and their needs constantly.

In summary, to validate your startup idea, talk to your circle, test it with small steps, create prototypes and MVPs, strengthen collaboration within the team, set clear and measurable goals, and sell as soon as possible! By following these strategies, you can validate your idea and check if it meets market needs. This will allow you to develop your startup on a solid foundation and maximize your chances of success in the exciting adventure of creating a startup!

Do not hesitate to show me your prototypes and MVPs! I would be delighted to give you some feedback to strengthen your project! :)

Keep exploring!