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Deep Dive into Validating Your Business Ideas

Deep Dive into Validating Your Business Ideas

Peter Thaleikis

Peter Thaleikis

Engineer. Maker. Open Source Fan. Backpacker

by Peter Thaleikis

Thanks to Juan Betancourt you can read the article in Spanish as well now 😍️

When sudden inspiration strikes you, nothing is better than getting started building your next project straight away and not losing momentum. After all, no story of genius-inventors talks about due diligence and planning. However, this might be exactly what you need to look at to avoid ending up with your startup or project, like roughly half of all new businesses, which fail within the first five years and end up on the Startup Cemetry. To use Benjamin Franklin's words: “By failing to prepare, you are preparing to fail.”

Why bother spending time to validate your idea properly?

Planning isn’t the most exciting task, especially at the beginning of the adventure of building a company. But Reason speaks for it spending time validating your idea:

It all comes down to this: Uncertainty is what you have plenty of in a young business. Your “job” as a business owner is to turn ‘Uncertainty’ into ‘Certainty’, to ensure your company is still successful after five years. Validating your business idea proper is the first step.

Step-by-step guide to validating your business idea

The internet is full of information on how to get your project idea checked and validated. However, there are many more ways than just Google to find out if someone has already built your idea or considered and decided to abandon your latest idea. It’s all a question of finding the right information and evaluating it in the context of your idea.

Get started with brainstorming terms, keywords and potential names for your project. It helps to keep a Google Sheet for this. This article comes with a sheet template for this case. Feel free to use it. UberSuggest is a simple tool to get more ideas for keywords and other related terms. If your list is very short at this point it helps to write a short description of the key features and unique selling points (what makes it different from existing projects) - this is often called an elevator pitch. This way you should find more keywords/phrases describing your idea. Collect all of them in the sheet. We will weed the terms out as we go.

The following list is naturally not conclusive as there are many niche websites and communities you can consult, but it should be fairly comprehensive to get started. It contains a list of websites and platforms you can check to see if your idea has been built, discussed or launched. Generally, I recommend to check each of your terms on these platforms. After a few websites you will get a feeling for which ones aren’t giving you any results and you might want to leave them out for future searches. But you can also pick some promising platforms if you are only after a first impression at this point. Let’s get started validating your idea:

  1. Surely one of the first things that comes to mind is searching on Google. Besides similar projects what is interesting is really the kind of results you find when you search for your keywords. Do you find articles on popular platforms or niche blogs? Are these “how-to” articles? Are there older or newer discussion forums? Are the developer blogs discussing solutions for your problem? Are there blog posts by potential users/customers discussing their manual approach and solution?

  2. After Google, YouTube is the world’s second biggest search engine. Are there videos around this topic? Keep an eye on how many times the videos have been watched. What kind of comments are below the videos? Are the comments speaking of excitement or rather on the negative end of the spectrum? Are people mentioning service or tool in the comments related to your idea? If so, add them to your “Competitors” list.

  3. Unknown to many, Facebook is one of the top 3 search engines worldwide. Put some of your keywords and key-phrases into Facebook. Make use of the filter bar on top and focus on “Groups”, “Pages”, and “Posts”. Depending on your idea, the “Events”, “Marketplace” and “App” can also be very useful. Especially groups are interesting, check the metrics members as well as the activity. Look out for significant problems people discuss. Does your idea address these? If so, very good.

  4. Are people seeking help with the problem you are planning to address? Check Quora for questions relating to the idea. Take note of the related topics and browse the questions listed under these topics.

  5. Search jump on Twitter next. Look out for accounts dedicated to the project. Are there tweets about this? Are people complaining about the problem you are looking to solve? What are the responses? Do people point to a simple solution?Are there commonly used hashtags for your idea? Add them to the “Spaces & Links” list in your template.

  6. Reddit is a platform used in various ways. Type in some of your successful terms, but don’t leave it at this. Search also for some unpopular terms - Reddit has a lot of niche communities (so-called “reddits”). Take note of any reddits related to your idea and add them to your list of communities (called “Spaces & Links” in the provided template).

  7. Identify what people are connecting with your idea by using Answer The Public. Simply put some of your winning terms in and keep especially an eye on the questions.

  8. Search for articles on Medium. Are there long articles on how to deal with problem? Take note of the people who wrote the articles. Add them to your list of people in the space.

  9. Check for projects on Upwork. Are people posting regular projects addressing your problem? Look for bundled up packages solving your problem on Fiverr and PeoplePerHour. Look at the number of purchases and the reviews. If you find listings on Fiverr and PeoplePerHour that’s a very good sign there is a paying market for your idea.

  10. Head over to Amazon’s Kindle store. Search for ebooks about this problem space. Are there any? Are they popular? Look out for bestseller badges. Check out the reviews, especially the more balanced ones (2-4 stars). Also take note of alternative books and links mentioned and add them to your sheet as needed.

  11. Are people trying to learn a solution to your problem? Check out Udemy, Udacity, and SkillShare. How are these advertised, as a time saver to reduce long manual processes or to make them much easier? That’s a good sign. Check metrics such as enrolled students, if available.

  12. Bootstrapping businesses is trendy. It’s always a good idea to look on bootstrapping communities like IndieHackers and discuss.bootstrapped.fm and see if anyone has been discussing or working on your problem. There are also communities aiming to support building projects in public. Two notable examples are WIP.chat and MakerLog. ProductHunt is a good bet to look for launched projects. See if they are alive. Bonus tip: For any existing project you find add “/open” at the end of the URL, to see if you find an open statistics page.

  13. Check the crowdfunding platforms Kickstarter and Indiegogo to see if there have been any projects solving the problem. Keep it broad - changing or extending a business model happens fairly quickly these days. Interesting metrics here are the funding status: Is the project overfunded or not founded at all? How many people backed the idea? Check any related project websites for engagement signs such as comments, links to YouTube videos with comments.

  14. HackerNews is a niche website and worth a look, if your idea is in the tech space. The search form is at the bottom of the website here. Interesting are the projects mentioned under “Show HN”, these are launched projects. If you find a project which solves a part of your problem you might want to add them to the competitors list.

  15. If your project idea is a software project, it might be a good call to research on GitHub as well. GitHub is a platform where many software engineers share code and even complete projects. Maybe someone is building a project solving a similar problem and there is an option to cooperate or building on top.

The results of the research done on the platforms above should give you a fairly good idea of the interest in a solution around your idea. If you stumbled across a “no-go” such as a competitor, you might want to reconsider this. Competitors don’t mean your idea isn’t good, it means that it’s good enough for someone to pursue it. If there are established players, even better. This means there is enough money to sustain these companies generated by the business.

Diving even deeper into validating your idea

If you haven’t given up along the way and reached this point, congratulations! You have gained a much deeper knowledge about the market your idea is addressing. You learned how the problem is currently solved, what your typical customer looks like and what tools exist at the moment. This is a great base to dive deeper into research and identify more deeply how your potential market looks.

The following ideas and thoughts are based on a list of similar projects (called “Competitors” in the template). It makes sense to check the website URL of each potential competitor for similar projects:

  1. Neil Patel’s website has a free tool allowing you to assess your competitors' backlinks and thereby their popularity. The key metrics are displayed on top. High numbers indicate more successful website and probably businesses.
  2. Search for alternatives on Google using “alternative” + name. This way you can discover more similar projects as well as learn about which platforms discuss these alternatives.
  3. Check the Google index by searching for “site:URL” to see how many pages Google has indexed. This gives you a feel of the complexity behind the project as well as leading you to other interesting insights such as engineering blogs discussing issues & solutions, and an impression of the types of content the business is publishing.
  4. Buzzsumo has built a handy tool to check how many social media shares a website has. Enter your competitors URL to see how actively their audience (customers) engages with them.
  5. There are several name-checking tools out there. These helpers verify the availability of usernames and domains. Often you might find similar projects if you try to find the right name for your side-project. Of course, my choice here is Startup Name Check. For the competitors these might bring up stale projects or parked domains. These can indicate someone worked on a similar idea.
  6. Look for niche communities regarding your topic. Check what issues they are discussing. Carefully check how the customers present and describe themselves. Profiles on these niche communities can be very interesting.
  7. Run a backlink search for the communities in your “Spaces” list. Keep an eye on articles linking to the communities as these often discuss solutions. Websites with questions as titles are usually a good bet for this.

By now you must know the market you are looking at very well. Your research might have brought up information which makes you doubt the idea is a good pick and that’s fine. It’s wiser to spend the time identifying that it’s not a great idea than investing your time and money and finding it out along the way.

What now?

Hopefully your research shows that your idea solves an existing problem and people are excited about having a solution for the problem. It’s much easier to build a business for excited users (who even search for a solution) than having to educate people that they have a problem they didn't realize before, which you are addressing and asking them to pay for on top of it all.

After the market research steps above, you should know how people feel about the problem your idea is addressing. You should know what people’s time is consumed with and what they spend their money on. All great insights for the future of your project and will, without a doubt, help you to make sure your startup is set for success.

Discussing your business idea privately

Talking about your idea seems against logic at first. Why tell anyone about your amazing new project you are planning? The reasons are simple:

Then you find a simple approach to having such a conversation with a potential client or user.

Alternatively to doing this at this point, you can also reach out to individuals as you find good candidates during the first phase. The results might differ slightly as you gain and incorporate knowledge as you learn more.

How to verify your idea in a customer conversation?

The following is a simple structure for a conversation with a user or customer. It includes all high-level points to ask as well as what to look out for.

Ideally you write the questions out in a Google Doc as you would like to ask them before starting the conversation.

Who should I talk to?

This depends on your idea and industry. The following ideas should lead you in the right direction.

The winning secret repeatedly mentioned by successful entrepreneurs is talking to your customers. You don’t have to wait until you have your product ready. From your “People” list anyone fitting the category “potential user” is a candidate. Also approach industry experts, such as authors and bloggers you have encountered regularly during the first phase of the research. It’s always a good call to include some other entrepreneurs. Don’t worry about them stealing your idea. Entrepreneurs are very busy with their own ideas and companies.

Once you are done with 5-10 conversation it makes sense to move into a public idea validation. A recommended approach using a landing page as well as public conversations is explained in the following.

Validating the idea with a landing page

A simple landing page with a newsletter form allows you to collect email address for a later launch as well as gauge the interest in your solution. Describe briefly what solution you are addressing and leave some contact details as well.

Carrd is a great tool for exactly this purpose. It allows you to build a simple one-page website for your project. The “Pro” package for $9 per year allows you to have a form to collect email addresses using a free Mailchimp account as well as a custom domain, which is great for your later launch as you can collect backlinks early on. It comes with a Google Analytics as well. You can find a suitable custom domain name by entering your keywords / key-phrases in my previously mentioned name check tool.

Discussing your idea publicly

Ideally you introduce your idea in a post on the places you find your potential customers/users. This might be a forum or on a social media website such as Facebook groups or a reddit. Your list of “Spaces & Links” should help to identify the right places.

The post itself should start with a short intro about yourself, explaining that you are doing research and then jump directly to the problem you are working on and the solution you are proposing. Pro tip: Make sure to include a link to your landing page and mention the newsletter at the end of each post. This way, you build up a mailing list of interested people as you go.

It usually pays off to post your idea on above mentioned IndieHackers and in a Twitter thread. For the latter, a sizable audience or support by an established entrepreneur can help.

Conclusion

These are quite a few steps and probably keep even experienced users of most of the mentioned platforms busy for a few days. That’s intended. As mentioned at the beginning, your “job” as an entrepreneur is turning uncertainty into certainty. These are the steps to do it.

You can also consider the research work as an investment. It’s an investment into knowing your market, knowing your customers and knowing your competitors. It’s also a massive driver of motivation once you have found out your idea is viable to be turned into a business supporting you in the long term.

If you liked this deep dive don't forget to bookmark it. It would also be awesome if you could share it on Twitter or Facebook. Thank you! 🙏️

Where from here?

The next logical step is, against logic, not building a product. The next step is marketing your idea. Drive traffic to your landing page and continue talking about it. Build a roadmap and make a call on what you need for a minimum viable product (MVP). For this, another post I’ve written about building a project, one tool at a time, might come in handy.

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