In a world that seems to be bursting with startups, even people who work nine to five come up with business ideas. Not to doubt the creativity or ambition of such brilliant business ideas, but how do they know if they will succeed? How do they know if it makes sense to further invest precious time and money? Bill Gross an American investor and fund manager, has done comprehensive research on the biggest reasons why startups fail, and the results were astonishing yet expected :
Why You Should Test Your Business Idea?
Most business ideas sound great only on paper but once you crunch the numbers, analyze the target market, and gather resources, you realize that your idea may not be viable. You might tweak and adjust your approach based on your resources and capital and try again, or you might come up with a better idea. Or you might think that an idea is simply not practical, but once you test it, you find out that it is worth giving a shot.
Businesses often end up launching their products because they are in a rush and do not give enough time for research or to test their business idea. Doing this can be a big waste of time, effort, money, and entrepreneurial capital! Therefore, you don’t want to fail due to poor preparation. Ensure your logic and efforts are complete before you launch the product.
Now that we have established that testing a business idea is a necessary preliminary step, and you have identified your target market, and made the final touches, the next step is working out how to test your business idea.
How to Test Your Business Idea?
There are several online services that allow you to test your business ideas in the most effortless way possible. We take a look at a couple:
1) Amazon Mechanical Turk (MTurk)
Amazon is everywhere! They even offer you the best chance of testing your business idea through their service of MTurk. This is a crowdfunded marketplace for individuals and small businesses to outsource their processes and jobs to a workforce that is distributed and performs these tasks virtually. These tasks range from carrying out simple research like survey participation to content moderation, and more complex tasks as well.
This is a brilliant service, all credit to Amazon. It is enabling businesses to combine ideas, intelligence, skills, and insights which will help new entrepreneurs improve their skills and maximize their potential. It has many benefits like getting quality work done with maximum efficiency for a reduced cost. You can get many microtasks done at a less price and in addition to this, there is a lot of flexibility given the nature of an MTurk marketplace
2) Company Idea
This is a far simpler way of getting an analysis of your business idea. Company Idea has a basic and simple way of getting your business idea approved. All you have to do is open the website with the link provided – fill in your name, and email address, and describe your business idea. Then agree to Company Idea terms and conditions, click ‘submit’, and voila! Your idea will get reviewed by experienced business professionals who will provide direct feedback in a matter of days.
3) Test It Yourself
You can test your business idea by following these steps:
4)Build a Prototype/Test Service
Build a prototype of your product and test it with people close to you to get initial feedback and observe if people see what you see in your product.
5) Build a Minimum Viable Product (MVP)
MVP is the simplest form of your product that proves the concept through actual sales. This way, you can create a more complex version based on realized market validation and data.
6) Run the Idea by a Group of Critics
This is an important step, as you have to identify your critics carefully. Pick a small sample size and let them say what they want about your product.
7) Act on Feedback
Make sure the feedback you get is something that you tweak your product with. Do not let criticism go to waste and listen to your target audience!
8) Test Website
Create a test website just to observe how much traction your product is gaining. It should give you an idea of whether it is something that people would like.
Adopt Experimentation and Implement Design Thinking
Don’t be afraid to fail. Keep experimenting and getting better. In addition, add design thinking through cognitive, practical, and strategic processes. Testing and improving your business is a long-lasting journey, but remember, make sure to recognize if things are not going well. If too much of your time and money are being used up then stop and perhaps consider a better strategy, industry, or idea.