Entrepreneurs are natural innovators – even before they earn the title of “entrepreneur”. An entrepreneur is defined by their innate curiosity, desire to push boundaries, and willingness to explore bold ideas: the same traits that led to some of the world’s top companies and inventions. 

If you’re looking to start your own business, you likely already have an idea in mind. But, how do you test your idea to take it from a dream to a reality? With hard work, strategic planning, and the proper knowledge, you’ll be ready to open your doors in no time.

Why is Ideation the Hardest Step in Entrepreneurship?

Out of all the phases of business development, the transition from ideation to action is one of the most challenging and work-intensive. This stage of the process is where you lay the groundwork for your business to grow. Many budding entrepreneurs don’t know where to start simply because they usually haven’t ventured out on their own before or even experienced the entrepreneurial process up close. 

Veteran entrepreneurs have the leg up in the ideation phase because they’ve been through the process before and likely have continued to develop early ideations throughout their careers. However, for newbies, the ideation phase often coincides with new entrepreneurs getting their feet wet and sorting out the basics of business ownership and what that entails. 

That lack of familiarity with the business incubation and startup process also means that many entrepreneurs, especially first-timers, tend to underestimate the importance of testing their ideas before jumping into action. According to some statistics, a high percentage of startups fail – up to 90% of the time. Unfortunately, many businesses fail early in their lifecycles because they lack planning and proper testing.

Figuring out how to test your idea thoroughly and realistically is a crucial indicator of your business’s success in the real world, so early on, investing in the ideation and testing process is a must. 

There are a few main reasons why you need to put your idea to the test before hitting the pavement:

#1: Avoiding the “Echo Chamber” Trap

In the early stages of ideation, it can be easy to get carried away. Once you stumble upon an idea that feels like a winner, it can be hard to take a step back and think objectively – especially when loved ones are showing you support. We call that the “echo chamber” or “mom test” trap. 

While it’s okay to be excited about your ideas and seek support from friends and family, you don’t want to put the blinders on and rule out other ideas prematurely or fail to self-critique. Naturally, the people that support you and love you most will think your ideas are genius. Still, you don’t want to fall into the echo chamber trap without careful objectivity and examination – especially this early in the process.

If you don’t examine your ideas objectively, you could overlook critical flaws in your idea, miss out on opportunities for improvement, or even eventually regret your choices down the line.

#2: To Collect Data Through Collaboration and Lived Experience

One of the main goals of testing your idea is to collect data, and while it may sound intimidating, data is all around us. Data is the fuel that pushes your ideas into motion and allows you to make essential fixes along the way. You’re collecting data when you share your ideas with others and receive feedback. Now is the time to dive into your experiences as a consumer and get curious about how the experiences of others will impact your idea in the market. 

Entrepreneurship, at its core, is all about being able to take yourself back to a state of child-like curiosity. When we’re children, we test and play and share our ideas without restraint. But, as adults, we start to feel weary of sharing ideas and being open to failure because we’ve been shaped by previous negative experiences leading to feelings of rejection, judgment, and shame. 

Push past the fear of criticism and rejection and embrace data collection from the eyes of a child; play around, be open to mistakes, and remember there is no right or wrong answer. Every outcome gives you more data to work with.

Testing your idea creates the blueprint that tells you where to go next – but data gives you the pencil to design with.

#3: To Ensure Your Target Market is Well-Aligned

Many early entrepreneurs wrongly assume that they are the ideal target audience for their idea: after all, many entrepreneurs’ ideas come from their own lived experiences. However, you must explore the market without bias to determine where your best consumer alignment lies. Unless you are 100% positive that you are your target market, you shouldn’t be trying to test something inside your head. 

To give your idea a fair shot in the business world, you need to take your idea out into the open among numerous consumer markets to determine the ideal target audience and how you can best appeal to them. When you make assumptions about what customers want, you’re jumping ahead and spending money with confidence in a way that you don’t have permission to do just yet – fight the temptation to jump ahead and refocus on where you’re at now and not where you would like to be. Once you’re empowered to take action and put your idea to the test, you need to know how to test your idea. So, where do you start when it comes to testing?

Workshop your Idea 

When first starting out, especially if this is your first venture into entrepreneurship, you want to master the art of the elevator pitch so that when you get to the pitching room floor, it’s second nature – that means the more practice, the better. While many hear the word “workshop” and feel intimidated, workshopping your idea is a gradual process you can approach at your own speed. 

Start with the basics and meet yourself where you’re at, pitch to yourself in the mirror while you get ready, or record yourself on video until it feels comfortable and natural. Surround yourself with inspiration, so you know what a confident and concise pitch looks and feels like. There’s nothing wrong with testing your idea on friends and family first. This is a great place to start, as long as you beware of the “mom test” trap we discussed above.

Early workshopping helps you gauge how audiences will react to your idea and how easily you can explain it in layman’s terms – remember the KISS acronym: keep it super simple. From there, you can workshop your idea on acquaintances, connections you might know in relevant industries, and even on polls and networking forums. Keep detailed notes of your interactions and experiences while workshopping, as they will come in handy later as you grow. 

Once you’ve mastered the casual pitch, you might want to take things to the next level and explore what other resources for entrepreneurs exist. At this stage of the process, it’s essential to lean on the community and resources around you. Remember: entrepreneurship is a journey of self-growth as professional growth – the more you learn along the way, the more you’ll have to pour into your business. 
There’s a wealth of resources for ideating entrepreneurs available for free or low cost, from local business incubators to online courses and networking opportunities to connect with other ideators and successful entrepreneurs that have been in your shoes before. Surrounding yourself with ideators and entrepreneurs can help build your confidence and help you learn from the lessons of others.

Get To Know Your Ideal Customer Through Market Research

If everything goes to plan, the workshopping phase should prepare you to either step back to the drawing board and reconsider your target market or help you feel supported to move ahead. Now, it’s time to start setting some early action in motion to gather data from the market response. Aim to paint a clear image in your mind of how your ideal customer looks and thinks. Consider your ideal customer a close friend. You need to know their pain points, likes, dislikes, and motivations. 

A great way to get inside the minds of your ideal customers is to pick their brains. Market validation services can be a great tool to help you paint a more detailed picture of your ideal customer through direct surveys. While it requires an investment in time and assets, you’ll gather invaluable insights into your predicted customer base – from their likes and dislikes, what products and services they would be interested in, and how they spend money. 

At this phase of the journey, you can also begin developing mockups of branding ideas, early website pages, and advertisements with calls to action to further determine your idea’s strength and where your personal skillset lies. For example, if you have a background in website development, you might feel comfortable tackling that in-house but require outside experts for marketing and advertising needs.

The market research phase is a great time to reflect on the insights you’ve gathered thus far. What lessons did you learn from workshopping? Have you noticed any trends concerning your business idea? How can you set yourself up for success early? What will your needs look like as your business idea develops further into fruition?

Keep Your Friends Close… And Your Competition Closer

Before you hit the ground running, you need to know the arena you’re walking into and what you’ll be up against when your “game time” comes around. In many ways, the entrepreneurial journey is similar to the process that professional athletes follow; while you might not be playing the Super Bowl your first season out, you need to learn about the industry “giants” around you and how they play the game. That’s where industry landscape analysis comes in. 

An industry landscape analysis prepares you to put your research and testing to work as you transition from the development phase into launching your business in the real world. Keep three goals in mind as you compile your analysis: understand the pain points that companies in the field face, competitor wins and losses, and what could be coming next in your industry. 

This report can be as straightforward or formal as you like, but it must include a few key components: insights into the current and future state of the industry and your main competitors. Industry analysis can also be a great place for collaboration – leaning on your networking contacts, especially in-industry, can provide you with a fresh perspective. This is especially important if your product or service exists inside a volatile industry with trends that frequently change, such as technology or finance. 

Remember: a little competition is healthy, and almost no entrepreneur enters a market unopposed. This isn’t about seeing competition as a threat – it’s about identifying ways to make your idea even stronger by learning about what your competitors do well (and the weak points they have that your idea can ideally solve). 

Want to test your idea but need help getting started? Clear Function is here to help. Our team of startup development experts has experience working with real entrepreneurs every day, at every phase of the lifecycle – so you can rest easy knowing your business is in good hands. Our goal is to help you minimize risk and get to market quickly. With marketing specialists, business coaches, and top-notch developers, we’re here to increase your chances of success.

Developing digital products like software applications can be profitable endeavors, but are you an expert in the field of the digital product you are looking to create?

The phrase “don’t build something you don’t know anything about” sounds simple enough, but for entrepreneurs wanting to jump on the cutting edge of a technology or a trend, it can be easy to overlook it. Developers welcome excitement from clients who want to create new products. They just want to make sure that what they are building has been backed up by research and validated by real customers. How do you leverage your desire to create a new digital product with the experience you already have?

Let us introduce you to the power of ideation. Going beyond merely brainstorming to find a problem you are passionate about solving and a solution that will serve the needs of a valued group of people. Ideation is a powerful tool for new entrepreneurs – even more powerful with the help of an ideation coach who can help you walk through the process.

Don’t Invest Money Until You Have Done Research

One of the first mistakes entrepreneurs make when starting a business is moving too fast. They buy a domain, build a website, and even hire employees before seeing if the product they want to develop is needed on the market. They might even ask a friend or a family member who has coding experience to work on the development – that normally tends to backfire in the long run.

Now, we aren’t talking about creating a small business with minimal collateral. If you are investing several thousands of dollars into your business then this article applies to you. The larger the product market the more research that needs to be done before you release it.

You can conduct your research by validating the product/market fit. It is an easy way to see if the product you want to make will fit on the market and be able to make a profit. You can follow the plan and find more tips for finding product/market fit in our latest article series.

Don’t Build a Product Without Being an Expert in the Field

Now this headline will make some people mad. How are you expected to be an expert in every trending industry? Well, of course, you aren’t. But for those on a limited budget and looking to make a profit early on, being an expert in the industry you are building in is important.

Let’s dive into this topic further. Say you go to a development agency asking for help creating an app to serve medical students looking for jobs. If you have never gone through the job search process post-medical school, how are you expected to know the features your app users need?

Of course, you could always research, but your app compared to one created by an expert would be lacking. Because you still most likely want to create a digital product or invest money, you could do so one of two ways. Find an expert to partner with or go through ideation coaching to find a product you can create in your area of expertise!

Partner With an Expert

Bringing in a partner to help guide the creation of your product can be a great decision. Another person to brainstorm and help with research can elevate your product to new levels. If you lack funds to get started, a partner can help alleviate the burden as they help share the startup costs.

Experts can also help guide your product if you are unfamiliar with the subject matter. Take our medical school job search app, for example. If your expert is a doctor who experienced trouble finding a job right out of school, they would be able to empathize with the problems that medical students face. Your entrepreneurial passion and their knowledge in the medical field could combine to form a valued partnership.

Begin the Process With Ideation Coaching

If you know that you are not an expert in the field you want to build in (or, you have already tried and failed) then we recommend ideation coaching. With coaching, you will review the areas of your expertise and find problems in them that need solving. Once you find the problem to solve, your coach will walk you through the process of finding a solution.

The key with ideation is to start small when finding a problem and solution. Get feedback from a group of potential customers, readjust your findings, and repeat the process. Every idea you have will start as one thing and evolve into something else over time, based on your growing knowledge of the problem itself and the behaviors of the people who experience this problem.

As someone who is already ingrained in the area of your potential product, you will have a better understanding of what your customers experience and how to market to them. You won’t have to handle the technical development of the product, but knowing these aspects can save you time and money that is critical for a new entrepreneur.

Here is a real-life example to help you see how ideation can help you. Last year Paul came to us with a goal: invest money into creating a virtual reality platform. Virtual reality is a trending area that is seeing a large rise in users, but the marketplace is already overrun by large developers like Microsoft and Google. While Paul could go ahead and try to compete with them, he would most likely not be successful because he does not have any prior experience in this field, or anything related.

Paul went through ideation coaching with our experts to try and find a better product to build. We found that he was highly skilled in other markets including construction and home renovation. With that in mind, we found a problem he could solve in that market and created a new application to revolutionize home remodel projects. Paul is passionate about the application and gets to use his expertise every step along the way.

Get Started Creating Your Own Product!

Just like Paul, your product can see success when you start small and back up your ideas with research. Your product can succeed if you are passionate about the work and you partner with an expert or complete ideation coaching.

Don’t build something you don’t know anything about…does that sound easier now? Take the first step and get started today!

As a new entrepreneur, your number one goal is to succeed. You want to make a profit and the way to do that is to create a product that consumers will buy. With that in mind, making sure that your product is wanted and needed, before you spend time and money on the development, is a priority.

Let us introduce you to a term that can help make your development dreams into a reality. ‘Product/market fit’ is a phrase first coined by Marc Andreesen in 2007. The broad definition is, “the degree to which a product satisfies a strong market demand.” If your product solves a problem that similar products already on the market solve, it’s chance for success decreases. When the product/market fit is validated, the degree to which you will succeed is significantly higher.

Throughout our article, we will convey the need for determining product/market fit on your next development project and how you can validate the problem you are solving before you get started.

Why Startups Fail

If you are coming to this article with a new and innovative idea it can be easy to want to jump in full steam and start your development, but the reality is that 90% of digital startups fail. You have an idea and you want to see a profit as soon as you can, but moving too fast can actually have the opposite effect – you could end up losing money because you didn’t take time to research the market.

34% of startups fail due to a lack of product-market fit. That is a high number of entrepreneurs who will never see a profit because the market didn’t feel a need for their product. At 34%, it is the number one reason why startups fail, followed closely by lack of marketing support as the number two reason. If you can solve the product-market fit problem, you can greatly increase your chances of success.

Validate the Problem Before You Begin

When it comes to developing a new digital product, there is a big chance that the solution you want to provide to consumers already exists. The market is oversaturated with products that aim to solve a whole list of problems. How can you make sure that yours stands out?

This is where understanding the product/market fit comes in handy. The more you know about the consumer, your competition, the problem you are solving, and the solution you are offering, the more your product will succeed. The first step we suggest is to start with the problem, not the solution. To find your problem, follow this three-step process.

  1. Identify the problem

If you already have a problem that you want to solve then you are ahead of the game! If you don’t, that’s okay. Take time to examine the areas of your life where you are experiencing a problem.

This could be something related to a problem you experience at work or at home. What frustrates you and makes life more difficult? Or maybe you don’t experience the problem first hand but know other people who do.

We recommend identifying multiple problems at this stage. As you work through the next two steps you will eventually find one problem that has a better chance of being solved and a better product/market fit than the others.

  1. Understand your assumptions

The second step is to take the problems you have identified and record all the assumptions you may have. Assumptions are everything you believe to be true and false about the problems. Recording your assumptions helps you have a better understanding of what experiencing the problem is like.

For example, if the problem you have identified is ‘teenagers don’t know how to budget their money’ you could make several assumptions based on that. These could include: teenagers are relying on parents to provide them money, teenagers spend money on unnecessary items, and teenagers don’t have access to budgeting material. Record all the assumptions that you think of, big and small.

  1. Validate your assumptions

After you have recorded your assumptions, it is time to validate them. The easiest way to do this is to ask people who are experiencing the problem. They are the best source of research and the people you choose to bring into your project at this stage will be valuable testers when your product is complete.

If you can, take the time to ask the people in person. You will learn more about the problems they are experiencing and will be able to validate your assumptions better by speaking to them face to face. If that isn’t possible, send out a survey via Google Forms or create a group on social media where you can ask your questions. Validate with several people because the more you learn at this phase the better your product will be.

Prove That People Want What You Are Making Before You Make It

After you have completed these three steps, you should be able to prove that you have a real problem with validated assumptions. If you went through the steps and came out with a problem that turns out to already have a widely-accepted solution or does not need to be solved, start over. You are looking for customers who are desperate for your product. If they aren’t desperate, it means there is likely a good alternative already on the market.

The best advice we can give you at this stage comes from Andy Rachleff, “Don’t write a single line of code before you have validated your idea.”

If you don’t start with the problem that has been validated, you will spend a lot of time and money building something people don’t want. If you have ever watched the show Shark Tank, you have seen products that seem new and innovative, but that don’t necessarily solve a real-world problem. Investors are less likely to invest in the product because they know that the shelf life will be short – causing them to lose money.

Validate the Solution to Find Product/Market Fit

In our next article, we will discuss how to validate the solution. Product/Market fit is all about finding a place for your solution and validating that the market can sustain it. We will discuss how to talk with potential customers about the solution, create an MVP, and collect emails.

Before your product ever serves a potential customer or hits the digital market, it’s important to determine exactly what problem you are solving. Whether you have the money you are looking to invest or an idea that has sparked the interest of others, you have the potential to solve a number of problems. Which one do you choose to solve first?

As a new business, it is best practice to start with solving one problem for one group of people well and then expanding your reach to solve other problems in the future. This practice will benefit you as you start out and help your business succeed in the long run because it promotes future growth. 

Prioritize Your Problem Before You Start

With problem prioritization, you can identify the best problem your product could solve. You could try and sell to everyone in the world, but how would that affect your ability to make a profit? By prioritizing what a select group of people need and learning how to adequately serve them, your product can see a greater chance at success. 

Use the Impact vs. Effort Matrix to Prioritize Your Problem and Find Your Solution

This matrix is a good way to think of all of the problems and personas that are right for your product.

  • The impact is the value that solving a specific problem could have. Value comes from the level of impact that will occur by creating a solution for the problem your target customer is facing. If your customers don’t see value in the solution your product offers, it will have little to no impact on them. 
  • The effort is how much labor it will take and how feasible solving the problem is. You could have a great idea, but if it takes a 20-person team and two years to accomplish it, how feasible is solving this problem with the resources you have? It is important to remember that you are just starting out and overnight success isn’t guaranteed. 

Now that you know the difference between impact and effort, it is time to use the Impact vs. Effort matrix on your ideas to find the highest impact solution with the lowest effort. 

For example: Say you are passionate about fighting world hunger and want to create a solution to help with this problem. With product organization and management tools like Miro or ProductBoard, you can map our the Impact vs. Effort matrix. 

First decide on the ultimate problem you want to achieve, “Solve World Hunger,” and put it in the highest effort/highest impact quadrant and add comparable goals in other quadrants.

The Effort Vs. Impact matrix helps you determine which problems to begin solving.

Once you have decided this, work your way to the other quadrants by figuring out personas and the ultimate solution to your problem.

The Effort Vs. Impact matrix helps you determine which problems to begin solving.
The Effort Vs. Impact matrix helps you determine which problems to begin solving.

Once your board is complete, you will most likely choose the highest impact and lowest effort problem, persona, and solution. Lowest effort typically means the least amount of money and labor which can be a crucial deciding factor for a new entrepreneur. It can also mean the quickest time to have a finalized product and you could see a profit or desired impact earlier than if you tried to solve a bigger problem. 

For our example, solving hunger in our city is an easier and more cost-effective problem to solve first. Once we have solved hunger in our city, we can work our way through the quadrants to solve hunger in our state, county, and eventually the world! While it can feel overwhelming at first if you tackle one small problem at a time it can easier to offer a real solution to your customers. 

Focusing on One Problem Helps Fine Tune Your Marketing Strategy

When you focus your attention on offering a solution to one problem, you can better market to a select group of people that need that solution. In your initial market research, you will be able to narrow down your target audience and learn more about them. It is important to find out what phrases your customers use to express frustration about the problem you are trying to solve because it is that frustration that will propel your product to be a need in their life. 

If you know who you are serving and how you are serving them, it will be much easier to market to them. You won’t be going into the market blind, but instead with a realistic expectation about what your future customers want and need. With active listening, you can understand the mindset your customers have and come up with a solution and marketing strategy that will best fit them. 

Your initial followers who you market to before you even have a product to sell, are those who will ride out the whole process with you. They will be integral to helping you understand your target persona and will provide you with feedback that will help your product succeed. It is because you narrowed your problem and target customer down that you are able to market to them well. 

Avoid Solving A Big Problem Early On

As a new business, your funds will most likely run out quickly if you don’t start making a profit early on. The bigger the problem you set out to solve, the more money you will spend. Start small and your initial investment will be smaller saving you money. 

When you start small you also have more opportunities to connect with your initial customer base. You aren’t trying to solve a problem for the whole world, but for a select group of people. A small group of initial customers can grow into a large group which will save you money over time as they share with you similar problems they experience. 

Use This Method on Other Parts of Your Product

The Impact vs. Effort Matrix has many different uses. Not only can you figure out what problem your product will solve, but also personas, solutions, features, and many other important factors. It can help you narrow down the direction you want your product to follow and ensure that you are making the right decisions. 

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