Two-thirds of startups in the field of technology fail in the first 20 months of their operation. The statistics was published by CB Insights. The main reason for the high-rate failure is the lack of market need for that product or service. Idea evaluation is the first step in preventing such failures. When your mind is set on the right track of idea generation, a lot of good ideas will come to your mind in a short time. After generating the idea, it’s time to evaluate the idea.
At this point, by analyzing your raw idea, you will find that your startup has a prosperous future or it is doomed to failure. At this stage, if done correctly and without subjectivity, you will find out whether your product or service will draw attention (of potential customers) or not. One of the most important steps to success is to have a business model and business model analysis. Be with Retiba.
Table of Contents
Definition of idea evaluation
Idea evaluation means collecting and analyzing data. Idea analysis in establishing a startup is carried out in order to determine the demand and probability of product success in the target market. Through a proper investigation, you should be able to identify your target market and potential customers. The target market is the part of the market that is out of reach of your competitors. Business consultants suggest that you evaluate your idea after generating the idea and before proceeding with production, team building, and financing methods. After evaluation, choose a target group.
Search social media. Conduct a survey. See how vital your product or service is to the target group. How much are they willing to pay so that they have your product or service?
What is the major risk of not evaluating the idea?
As mentioned above, the major risk of not evaluating an idea is failing in business. When you try to put your idea into practice without a thorough investigation, it will likely end in failure. You will lose a lot of time, energy and money. What you have gained from these exorbitant costs will be nothing but a market without a customer for your product or service. Failure to identify the market causes that your product or service fails to return the minimum amount of money to business owners.
Three questions you need to answer in idea evaluation:
First question in idea evaluation:
Is the problem you are trying to solve one of the three main problems of your potential customers? Is that problem so significant to your customers that they would like to pay for it?
Sometimes, you have identified the problem correctly, you have designed your product or service to solve this problem well, but this identification and solution does not lead to a thriving business, why? Because you have made a mistake in evaluating the priority of this problem for your target group. This is not one of their three main problems. In most cases, the three main problems of individuals and companies attracts all the time, budget and attention to themselves, and it will no longer be time to look for solutions to other problems. The first step in realizing an idea can be to abandon the idea altogether and focus on the problem at hand.
Second question in idea evaluation
What products or methods are currently available to solve this problem? Finding the answer to this question brings about several advantages for you: The first advantage is that it will give you a better view of the approach of individuals and companies to solve the problem. For example, they use a special solution to address the problem or use several methods together to solve that problem.
The next advantage is that it makes you know your competitors (better). The presence of active competitors in the market indicates that there is a market for the product or service you offer.
By investigating the traction of competing companies, you have examined your target market. You can ensure the existence of the customer by examining their speed of attracting competitors, the duration of the activity, the amount of income and their profitability.
Third question in idea evaluation
What are the unique features of your product or service that potential customers will prefer you to your competitors? To answer this question, you can conduct a survey among your potential customers. Ask them what they do to solve their problems. Are they willing to use your product or service with possible specifications or not?
Idea evaluation will be successful only in one case: If it provides you with a comprehensive view of the target market, the competition you will encounter, and the income and profitability of the market you intend to enter. What you need to be very careful about while reviewing and analyzing is to be neutral when evaluating an idea. Of course, this is very difficult.
In fact, subjectivity and prejudice toward one’s own idea is a problem that almost all founders and idea owners are grappling with. But in the end, always keep in mind that the more flexible you are in evaluating an idea and finding its true value, the lower the probability of failing after spending a lot of time and money.