How to Validate Idea??
Most of us evaluate our idea based on emotion, feedback of friends & Family or by help of Google…
Here I will explain methods which we learn (based on so many strategy blogs & Books) to evaluate your idea, forecast potential profits and test.
Check existence of your Idea.
You may have an amazing idea, only to realize that there is another company doing exactly what you propose. The easiest way to see if your idea exists is via an online search.
My advice is to pursue an idea that doesn’t have any competition yet (ORIGINAL BOSS), unless you think the competition is doing a poor job (like they have a bad website, horrible customer service, or awful reviews).
You can add value addition on top of existing services. After you search for each of your ideas online, Hold any ideas that already have robust competition for further evaluations.
Practically Evaluation based on “Roti, Kapda & Makaan” 😉
Investment cost, personal interest and potential profit.
- Investment Cost (on a scale of 1 to 10): 1 (will cost you over INR 500,000 to launch), 5 (will cost you INR 100,000 to launch) or 10 (costs less than INR 50,000 to launch)
- Personal Interest (on a scale of 1 to 10): 1 (if you’re not interested at all in the idea aside from its potential profitability), 5 (you’re somewhat interested) or 10 (you’re very passionate and excited)
- Potential Profit (on a scale of 1 to 10): 1 (less than INR 5 Lac in annual profit), 5 (INR 10L in annual profit) or 10 (over INR 20 Lac in annual profit)
After rating each idea with these attributes, add up the total for each idea. Rank your ideas from highest total score to lowest total score. Focus on the ideas with the highest total score
Evaluate revenue and expenses
Create a simple table for each idea (multiple Ideas). On one side, estimate your revenue. On the other side, estimate your expenses. You will have both overhead and operating expenses. Overhead expenses are costs that do not change based on the quantity of products or services you sell, like – incorporation, insurance and internet.
Operating costs are costs associated with making a product or providing a service, i.e., cost of materials or shipping.
Feedback – Use Google Forms & Social media to get Max Responses
Pitch your ideas and see which ones they like the best. You can set up a free survey using Google Forms to send to your contacts. Since your friends and family might be biased, you also want to pitch to people you don’t know. You should talk to real potential customers about their needs, wants and expectations.
SurveyMonkey offers an Audience tool that lets you send a survey to a targeted panel of consumers. Here are some starter questions to ask in your survey:
Identify your target People (Personal Data)
- What is your age?
- What is your gender?
- Where do you live?
- What is your household income?
- What is your profession?
- What is your education level?
Assess Market & Product
- Would you use this service or product and how often?
- What do you like about current products or services currently on the market?
- What do you dislike about current products or services currently on the market?
- What concerns/questions would you have about this service or product?
- How much would you pay for this service or products.
Now, its time to kickoff your Idea from scratch to sky…!!
“If you decided your almost there…always follow your heart !!”