This blog post is Promeets’ inaugural article (Lesson 1) in our weekly blog series for the Startup 101 Handbook. This handbook is for leaders of aspiring startups—which will eventually contain 101 detailed lessons—is Promeets’ contribution back to the startup ecosystem. Please share these lessons with your entrepreneurial friends and colleagues that you think could benefit from it.
Every business owner that has launched a startup was convinced that he or she had a rock-solid idea that would sell. After all, what other reason would they have for starting a business if they didn’t believe in their concept? While personal belief and passion should be at the core of your startup development efforts, you also need to make sure that others—notably your target market—think your concept is valuable, as well. As we develop our Startup 101 series, we’ll show you how to test your concept to make sure you have an idea that will sell. Here are five tips to get you started.
Think of All the Ways It Could Fail
Your startup is your darling, and the last thing you want to do is poke holes in the core ideas behind it. However, it’s necessary to play devil’s advocate before you begin to grow your startup. Sit down with your team and brainstorm about all of the ways your idea could crash and burn. Is there too much competition? Is your concept difficult to explain to potential buyers? Is it too tough a market (or too saturated)? You should also make sure you’re hitting the market at the right time. Pets.com, for example, had a great concept and marketing support, but that didn’t keep them from burning through $300 million in startup capital in 23 months. They closed their doors after two years, largely because they had a great idea that was before its time in the evolving Dot.com Era.
Go Right Where Others Went Wrong
Your startup concept should have plenty of aspects of originality, but you should still be able to identify other companies with similar ideas. Get to know your competitive landscape intimately. One of the best startup growth strategies is to take a look at your competition and see how you can do better. Are there startups similar to yours that have failed? Figure out what they did wrong and how you can improve in these areas. Is one of your competitors knocking it out of the park? See what aspects of their success you can replicate and identify weak areas where you can do better.
Craft a SWOT Analysis
Looking at your concept from all angles is vital in this stage of development. Growth hacking experts suggest performing a SWOT analysis on your idea to make sure you get the full picture. A SWOT identifies internal strengths and weaknesses of your business plan as well as external opportunities and threats. A SWOT can not only help you identify red flags early in the process, but it can also help you capitalize on a great idea and take it to the next level once you give it the green light. SWOTs can also help in assessing the competition, build a brand image, and develop an effective marketing strategy.
Present Your Idea to Potential Customers
No matter how much you and your team talk about your concept, you won’t know how it will resonate with your target market until you ask them. Consider building a sales presentation that you can show to potential customers (and investors). Gather a test market and ask them to view review presentation and give you feedback. You can find test subjects through social media, local networking groups, or even colleges and universities, if, for example, students are your target market. Offer them an incentive for viewing the presentation and get your team together afterward to go through all of the feedback that you receive.
Don’t Stay Married to What Isn’t Working
One of the best startup tips is to always remain agile. If you have a concept that just isn’t working, it’s important to be open to change. Successful travel concierge Pana, for example, originally started out as a social recommendation app for college students. When this idea didn’t test well, the owners were agile enough to tinker with the concept until it developed into something more marketable. When you receive feedback, it’s important to recognize when your idea could be completely sunk and when you need to start over. However, it’s also vital to recognize that a few changes could be all you need to turn your idea from inferior to marketable.
Knowing you have a solid idea before you invest valuable capital into marketing and development is one of the keys to establishing a successful startup. Get it right out of the gate. Discover the expert help you need from our knowledgeable pool of startup experts by visiting our website.