In today's article, we will cover the topic of how you can validate your business idea BEFORE you start building your product and wasting lots of time and money.

Validating your business idea means, determining if there is a (big enough) need for your product in a specific market (your target customers), as well as whether people are willing to pay to have that need met.

Why should you validate your business idea before building the product

One of the most common and painful mistakes you can make as an early-stage founder is having a (great) idea and immediately spending all your time building a product without validating the idea upfront. Validating your idea brings the following advantages:

• minimize your risk of building a product nobody needs or wants to buy
• don't waste your time and money
• predict the revenue potential f your business idea upfront
• speeds up your delivery of a highly valuable product (later on)

Different ways to validate

Probably the truest and most reliable way to validate your business idea is that people actually give you money. That's also the reason why lots of startups build landing pages with checkout pages (payment gateways) and ask customers to pay for their planned product - even if there is no product available yet.

Here's a shortlist of validation strategies, starting with the easiest (which also tend to be low-confidence) and moving to the hardest (high-confidence):

• gather data based on market research (e.g. Search interests like Google trends, SWOT Analysis, Market Trends, Papers, Statistics, Reviews, Communities like Facebook Groups or Reddit,...)
• market testing talking to other people/stakeholders (e.g. interviews, surveys, polls,...)
• get real market commitment (waitlists, sales, letter of intent, pre-orders/crowdfunding, beta-tester)

I can highly recommend the book The Mom Test by @robfitz

6 Steps to Validate your Idea

Step 1: Write down core assumptions and hypotheses

The first step to validate your business idea is to write down the key assumptions for your business.

An assumption is something that you believe about your customer, market, and your product without any significant evidence.

A hypothesis is your personal best guess about what you expect to happen in a given experiment. It's important that you phrase your hypotheses in such a way, that you run the experiment, measure the result/metric, and take a conclusion (verified or rejected). A useful hypothesis is a testable statement.