Is There A Way I Can Test And Validate My Start-Up Idea Without Spending Big Money?

Question: Is there a way I can test and validate my start-up idea without spending big money?

Ibrahim Yusuf, Kano

Answer: Validation is a very important step in deciding to introduce a product or service into the market. Validation is far more important than design, features, price, or how much you would need to launch, or the need to start assembling your team.

What, then, can you do to avoid delivering a product or service that no one will pay for? Here is a simple framework:

  1. Articulate The Problem: Write out the problem in the form of a simple statement. Define and refine the problem your product or service wishes to solve. Clarify it. Express it in one sentence.
  1. Rank The Problem:  Categorise the problem you are trying to solve. Determine whether it is a top-of-mind problem or a nice-to-solve problem. You want to know if the itch is what your potential customers must scratch or afford not to scratch.
    The answer to this puzzle will come from your knowledge of the basic profile of your target market, and how well you know the people who are likely to patronise your product or service.To do this, you should make a short list of members of this group, and double-check your idea with them, through telephone or face to face interviews. Your conversation with them should focus on the problem you have identified, how they are experiencing the problem, what they think about the solution you are considering and if they are likely to buy your product or service.The answers you get from your interview with this focus group will give you a sense of the nature of the problem, whether the problem you are trying to solve is top-of-mind or nice-to-solve. If the problem your idea seeks to solve is not top of mind, your chance of success will be limited.
  1. Check Out Current Solutions:Your interviews with your focus group will reveal how they are currently solving the problem. The fact that they are already solving the problem one way or another indicates that there are other competitors already working on the problem you want to solve.
    This verifies that there is a market which, hopefully, is large enough to accommodate a new player. If the contrary is the case, that you are about to be the first business to solve the problem you have identified, that may be a sign that the market you are looking to serve is too small or does not exist!
  1. . Find Your Niche.It is good to find existing competitors striving to solve the same problem that you want to address. You can then look for other signs, like whether they are serving a sufficient volume of customers, raising money for growth and hiring staff.If the signs are positive, you should now follow up with a second round of interviews with your focus group(s). Your objective is to pinpoint the pain in the existing solutions to the problem. Find out what the target market dislikes about present solutions. Identify the missing link that your idea can offer to better address their pain.

With your new findings, you are assured of a market for your product or service. More important, because you do not wish to launch just another ‘me-too’ product or service, you now have a guide to help you deliver a different and distinctively better product or service.

How Do I Reach The Right Customers?

Question: How Do I Reach The Right Customers?

Obajimi Adeyemi, Ibadan

Answer: The first step in reaching your customers is to know who and where they are.

Who are your customers? Simply defined, your customer is any person who can benefit from the use of your product or service. Your challenge, as the provider of a product or service, is to identify such person(s), by geographic location, demographic description, psychological inclination or any such characteristics that separate them from the general population.

It is after you understand who your customers are and why they are likely to buy your product or service that you begin to find channels to get your product or service before them.

In doing this, you must remember that different groups of people may want different things. Let’s say you are running a book store. Some of your customers may be interested in business books, some in religious books, others in novels, and so on. By categorising your customers according to their reading interests, you know that each group will want different kinds of books. This segmentation will influence how your business will communicate with each interest group.

In targeting your right customer, you must think about your product or service, and the type of customer who is likely to buy it. You must determine whether your product or service will appeal to a specific age group or gender; whether your customers are house holders or business customers; whether income is important in their decision to buy.

You can also segment your customers according to their social class, lifestyle, personality, interests, etc. At this stage, having broken your market into segments, you will decide where to concentrate your marketing efforts and resources.

You will need to decide whether to focus on one specific segment or more than one. You will balance the viability of targeting several segments of the market (which requires more time and higher cost) and targeting one segment (which may not deliver enough customers to make the business viable).

Now that you have defined your target customers, you should profile and categorise them according to what they need and want from your business. If your target customers are individuals, you will gather information
about their age, gender, income, location and buying habits. If they are businesses, you should know their size, the products or services they buy, their budget cycle and their suppliers.

The resulting information will become your database of identified customers. With this database, you will be able to concentrate on the best methods to communicate with them. For example, if your findings indicate that the best way to reach your identified target customers is through social media channels, you will then direct your communications towards those particular customers.

This act of identifying your customer base and pinpointing the best ways to reach them will greatly improve the efficiency and effectiveness of your marketing and sales initiatives.