1) Find a Mentor, 2) Draft your Business Model, 3) Meet to Beat your competition, 4) Know your User, 5) Proto your Idea, 6. Check your Type of Hype, 7) Shop (& don’t stop) till you find Funding.
Starting a business requires serious research, but it also requires you to seize the opportunity. Jump in without consulting the data, but you risk boarding a sinking ship. Spend a year learning every detail of the opportunity, and it may already be gone. As with most things in life, a balanced approach is best when it comes time to validate your business idea.
Take the following Steps to validate your Business Idea in 30 days or less
Step 1. Find a Mentor
In thirty days, you simply can’t do all the work yourself. If you have a mentor in mind, ask him or her for help. This person might be a former employer, a thought leader you follow on social media, or a member of your alumni association. You might also consider reaching out to your local SCORE chapter to find the Mentor that’s right for you.
SBA Resources. If you’re not sure where to turn, reach out to a local Small Business Development Center. Backed by the Small Business Administration (SBA), SBDCs offer free or low-cost consulting services to help entrepreneurs turn their ideas into viable companies.
Step 2. Draft your Business Model
Before you meet with a Mentor, get a head start by drafting your business model. Doing so will help you understand:
- The infrastructure of your business (the resources & networks you’ll need to carry out your business activities).
- Your offering (what goods or services you’ll provide and how they’ll differ from your competitors’).
- Your customers (who they are and how you’ll reach them).
- Your finances (the cost structure and revenue streams you’ll need).
Step 3. Meet to Beat your Competition
Never jump into a market before getting to know the other players. One of the best frameworks for analyzing your competition is Porter’s Five Forces. Developed in 1979 by Harvard Business School professor, Michael E. Porter, Five Forces can help you understand the influence of competitive rivalry, the bargaining power of suppliers and consumers, and the potentially disruptive threats you might face.
Porter’s Five Forces.
- Threat of new Entrants – What are the barriers to entry for new competitors?
- Threat of substitute products or services – How easily can an alternative replace the product or service?
- Bargaining Power of Buyers – How effectively can buyers drive a bargain?
- Bargaining power of Suppliers – How influential are suppliers in deciding price and availability?
- Rivalry among existing Competitors – What advantages do competitors have and how can you beat them?
Step 4. Know your User
Who’s your target customer, and why does he or she need your product or service?
Develop a user persona /Customer Persona
= a fictionalized character who embodies the customer/user for your product or services. If you need help filling in demographic details like market, age, earnings or employment status, consider surveying your projected Target Audience.
Step 5. Prototype your Idea
What’s the riskiest assumption of your product? Whether a certain component will work? Whether the design is intuitive? Take a lean startup approach to test your theory: build a “just enough” prototype, and bring it to Mentor, Advisor/s and likely buyers.
Resources. If you’re in the tech space, spend $35 to get a Raspberry Pi (not Pie), which offers desktop-level computing power for hardware development. To wire-frame software, try Sketch. With a robust bank of symbols and a free trial option, Sketch lets you create interactive interfaces without writing a line of code.
Step 6. Check your Type of Hype
Test the Waters – especially if you have a digital service in mind. Set up a Mailing list – so visitors to your site get a sneak peek at your new product. Reach out to influencers in your space, especially if you’re in a niche industry. Develop Blog posts around your idea, and share them on social media. If you get mixed messages, set up a focus group for an in-depth discussion with your audience to further hone your product’s messaging.
Step 7. Shop (& don’t stop) for Funding
Consumers might want to buy your product, but an equally important question is whether or not investors are willing to fund it. Equity funding is one option, but the truth is that less than one in 100 startups receives Venture capital from VCs. More commonly, startups take loans from alternative lenders, crowdfunding, or even unsecured business loans. Which-ever route you choose, you’ll gain at least an additional set of eyes on your product or service. Someone with a financial stake in your company is in the perfect position to help you refine & validate your idea.
Those seven (7) steps might sound like a lot to accomplish in one month, and they are. But they also represent the fastest, safest path to startup success. And if that’s what you want, you’d better be prepared to work for it. Don’t give up. You’ll enjoy the reward from the risk !!!