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Idea Testing

Updated: May 9, 2020

A short and simple idea filtering framework can save many painful months after the launch.

Idea Rating Framework

While working through a clutter of problems and solutions, It it good to establish some ground rules and evaluate the ideas using those rules. The list below is not exhaustive but provides a well rounded view of the factors that can help you to zero in on a good to great idea.​ Some of the Key characteristics of good idea

  • ​Does the idea sound like a simple yet bad idea initially? Yes/No

  • Is the target market too fragmented for big companies to find it interesting?Yes/No

  • Is the idea catering to under-served customers in a market not catered by existing players?Yes/No

  • Do you have more than 40 people who feel the problem is a real problem?Yes/No

  • Is there a small group of people who have urgency to use the product or service?Yes/No

  • Does your initial analysis show a supply demand mismatch?Yes/No

  • Is the market too small market for big players too get interested?Yes/No

  • Does the idea sounds seem obvious but sounds weird?Yes/No

  • ​Does the idea makes you feel that you're late coming up with this idea?Yes/No

  • Does the idea seem like a cool thing that you need and you can develop?Yes/No​


If 7 out of 10 responses for you are Yes, then idea is in a good zone. If it is less than 7 then see how some responses can become yes by working on the subset of the idea.​​ What if you don’t have an idea but want to start a startup? Wait to start a startup until you come up with an idea you feel keen to explore. If you don't have idea then maybe you shouldn’t. It’s so much better if the idea comes first and the startup. Because a good idea should seem obvious, when you have one you'll tend to feel that you're late. Don't let that deter you. Worrying that you're late is one of the signs of a good idea. Founders often cite in lessons learnt that they wish they had waited until they came up with an idea they really loved.  If you have several ideas, work on the one that you think about most often when you're not trying to think about work.It takes considerable time and effort upto a decade, to build a great startup. If as a founder you don't love and believe in what you're building, you're likely to give up at some point along the way. 

Customer Validation

A common mistake startup founders make is to solve unreal, assumed problems. They tend to skip the part of testing the idea. So, how should one test the idea?

​As a starting point try and talk to people who have the faced the problem and see if there is a real need, would they pay for the product. Is there any urgency for them to use the product or service?

  • The best way to test ideas is to gauge the intent from potential customers. For example, A founder planning to launch a B2B company planning to build a piece of software then talk to potential customer. Ask them if you build the product or service, would they like to pay or subscribe

  • if you’re B2C company get a google form or something similar and get it filed by prospects as pre-launch sign up for paid use etc.

Then you have a set of initial prospects who want to work with you to test and try and help you improve on your product or service. Once you have the intent, then build a basic product with few features – small part of the product. It’s important to let idea develop as you get feedback from users. And it’s critical you understand your users really-well—you need this to evaluate an idea, build a great product, and build a great company.​

Another interesting way to critically analyze an idea is Why now? Why is this the perfect time for this particular idea, and to start this particular company. Why couldn't it be done two years ago, and why will two years in the future be too late? For the most successful startups should have known to time the market. It comes with the realization that the time is now. And if you don't you should be at least somewhat suspicious about it​

Refine and understand the Market ​A start-up idea can address a latent need of the market. At initial stage market may not be well defined but the market should be big enough and should have potential to grow. Market that have underlying supply demand factors or realignment based on technology development provide a good entry point.​The key part of the puzzle relies on understanding the target segment or most likely customers who would buy your service or product. If you define your target segment well, then down the line when you start selling, as a founder you can save a lot of time by quickly qualifying the prospect.  The ability to identify a high value prospect and convert into sales compared to go after low value prospect and waste time and money, can be developed by a founder who understands their target market. Investor also want to know- who desperately needs the product. You have to find a small market in which you can get a monopoly and then quickly expand.​

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