Do you know that 90% of all startups fail? In most cases, their failure comes from both customers and the market not being ready for what they offer.
This is why idea validation, being a process of testing business ideas, is crucial to help you understand the market. Also, it helps verify the current need for your product/service.
Now, let’s proceed to understand more about idea validation solutions.
The Оne Liner
Capture the idea in a one liner (max 7 words) and explain what and why.
The Idea
Pitch
Imagine you’re the user of the idea. Now, write an Amazon customer review for it. – Kathy Sierra
“X Solutions has been an amazing way for my agency to expand into other niches we didn’t have experience in.
After Covid, we started receiving requests from all types of customer-facing services (hairdressers, tattoo shops, beauty parlors …) to implement an appointment/booking system. X had a Solution for this and made it a breeze to set it up along with complete documentation for our clients. We really didn’t have to do much!”
Goal
What are we trying to accomplish/solve/10x/job to be done?
- Facilitate persona needs by creating new business.
- Deeper relationships with partners
- Create more value and explore new pricing or upsell methods
Use cases
Share 4 use cases for the idea.
- An agency/freelancer gets a request for a Solution, however they have limited/no experience in the field.
- An agency/freelancer whose current revenue sources are drying up (for whatever reason: covid, recession, market dynamics …) and wants to quickly explore new avenues of revenue.
- An agency/freelancer who wants to build a SaaS like product for a specific vertical and finds our Solutions the perfect starting point.
- An agency/freelancer that wants an easy way to start up a recurring revenue stream.
Stakeholders
Participants from the ecosystem that will be involved.
- Agencies / Freelancers
- Plugin / theme … developers
- Agencies / Freelancers end customers
Alignment
Why should we spend any time focusing on this?
Time to shine and show why!
Does the idea align with our 3 year plan?
Check against our goals.
To offer “Consistent Peace-of-mind and Productivity (2Ps) at Scale”?
Productivity, yes, we can help agencies/freelancers to achieve things faster. Unfortunately, not so much when it comes to peace of mind. However, if someone has done their homework and knows what they’re doing, peace of mind often goes hand in hand..
To achieve 50M in Annual revenue with X% gross Margin?
Marginally. Don’t think it will be a huge revenue generator.
To improve capabilities for partners and higher-value customers (over $100)?
Definitely and main target. We make things easier for them and open the door to SaaSification.
To innovate and differentiate?
Typically, competitors create a marketplace or similar with a bunch of plugins/themes and other various “value added” services. Therefore, the solutions approach is much more limited (less partnerships) but of a better quality (much deeper), which makes it more interesting for everyone involved.
Does the idea align with our 5 year plan?
Check against our goals.
Will we achieve 100M USD in annual revenue?
Again, marginally. Don’t think that direct revenue is the main outcome.
Will it enable us to be seen as one of the most trusted and innovative partners for small and mid-sized businesses?
Yes. We genuinely want them to succeed. However, we have a different approach than the competition, and they ( the clients) need to trust the process..
Will it show that our combination of flexibility and simplicity is unmatchable?
The Solution’s main reason for being is to make something complex ( for instance, getting into a new market) easy. In fact, the whole concept revolves around simplicity (from ways to deploy to in-depth documentation covering both the agency and the end customer …).
It gives agencies/freelancers, plenty of flexibility on how to use it too. From standalone sites to building a dedicated front-end (like in the case of the restaurants), to real “SaaSifying” as it could happen in the future.
Reality Check
How does the idea compare to how it’s handled currently?
New reality (10x / new market / vertical) versus current reality
Currently, we don’t solve specific vertical market problems. We package generic applications with a few infrastructure related plugins (typically caching) and not much more. Likewise, we don’t have a relationship withother ecosystem players (plugins/themes…) beyond co-marketing efforts. Solutions tackle both.
What would be the ideal user scenario for the idea (from the customer experience)?
Try to explain the real experience of using the solution the user will use to bring it alive.
You are an agency and a restaurant owner comes to you with the idea of offering online ordering services. Although you don’t know much about the subject, you have noticed “Restaurants” under a new Solutions header.
As a result, you dig a bit and realize you can cater to your customers needs. In fact, you have been able to successfully deliver what your customer wanted. In addition, the experience opened your eyes to other areas of business that you thought were out of reach.
Can we achieve our ideal scenario anytime soon?
Offer some clues as a timeline and why.
When we are working to reach the final point, we need to validate if the assumption we have at the start can be achieved, with a “lovable product“ from users, as quickly as possible. Are there any shortcuts we can take? How can we do it quickly?
Could we fake it till we make it (buy our way to getting closer to the goal)?
Any scenarios that offer us a way to hit the goal using shortcuts?
No.
What is the easiest way to validate our hypothesis?
Fastest way to know if this will reach our expectations.
Document the option to do a validation before you go for a full launch. What are the best flows to launch quickly, without taking unnecessary risks?
What/How well are the competitors/alternatives doing for this idea?
Some context of the alternatives/competition.
WPE has in fact a “Solution” Center that they tag as “Innovative resources for building amazing digital experiences on WP Engine” but that really is just a list of plugins, themes, and education for co-marketing. No concept of a comprehensive vertical solution …
And it is one of the most evolved.
How could this backfire?
You win by not losing…
Obviously, choosing the wrong partners to provide solutions would lead to shattered expectations, agencies disappointing their customers.
Alternatively, another less obvious choice is to increase support if a “Solution” doesn’t work as smoothly as it should and is specialized in nature (and difficult to extend support teams).
What can happen to X future if we don’t follow this path in 6/12/24 months?
What will be missing if we do not follow through. What’s at stake?
Well, nothing really. We can live without this. Simply, if done properly, it can help to differentiate and create a more complex experience.
Any other ways to accomplish our objective?
What are the alternatives out there?
Why is nobody doing this yet?
What are the reasons this solution is not in the market already?
The tricky part when building an idea is to figure out a solution that fits a specific vertical, with most features.
As a matter of fact, having one solution for one vertical, forces you to take sides (i.e. bet for a specific plugin). As a result, partnership options with other players can become more difficult.
Finally, if you focus more on the benefits of the co-marketing efforts with other vendors than the benefits for the users of a specific solution, then quantity trumps quality.
Showing the Way
Quick napkin metrics calculation that show viability
Quick and dirty numbers: Fail, Min, BreakEven, Some Win, Jackpot scenarios.
Show stopper
What conditions would make us stop this initiative?
Plan & Expectations
Evolution from concept to profitable business.
Stage 1 – We’ve got game : Show the Idea is possible with 1 real use case
3 main points that will get us to 80% of the way
3 main points that will get us the rest 20% of the way
Stage 2 – Game ready : Prove the idea is possible (results with no money)
3 main points that will get us to 80% of the way
3 main points that will get us the rest 20% of the way
Stage 3 – First Base: Break even
3 main points that will get us to 80% of the way
3 main points that will get us the rest 20% of the way
Stage 4 – Home run : Revenue generator with high ROI
3 main points that will get us to 80% of the way
3 main points that will get us the rest 20% of the way
Closing
Why Yes?
Without overthinking it, write down three reasons why we should apply/consider the previous points. Mind you, the objective here is to subconsciously connect the dots using all the work done previously. While this may sound crazy, the brain often makes its own connections without us even realizing it.
Competitor praising
Imagine that an investor was to ask a competitor of the idea: “If you could only use one company That did the same as you, and that was not your own, which one would it be [ X ] and why?”
Guest Author
Also, he works with teams to develop their business and product strategies and then coaches and empowers them to build software products that are useful and valuable to the business. He further help teams create and execute cultures and software development processes that help them do the best work of their lives in environments that are safe and healthy.
Guest Author
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