Startups can be financially and personally rewarding. They are also a lot of work and may not pay off in the end. Most entrepreneurs, get so many good ideas regularly. So how do you know if a startup idea is worth pursuing?
Here we will give a sort of checklist that you can run through. If your idea checks out in these areas, it might well be worth the work to pursue. If it doesn’t check out, it may just need some tweaking, or it may not be worth the effort.
Your Startup Should Address A Pain Point
Your startup idea should address a pain point. That is to say; it should help people to do something that people want to do. You heard this before – you want to build a startup selling painkiller, not the vitamin. Most people like the idea of vitamins, but there is no urgency.
Many people think that this means that their startup needs to solve a problem that no one else has solved before. This isn’t necessarily the case. Sometimes there are already solutions to a problem, but those solutions have their drawbacks. These drawbacks can be the pain points that your idea addresses.
Your Startup Should Have A Specific Audience
Your startup idea should also have a fairly specific audience in mind.
Naturally, this audience will be people dealing with the pain point that your idea addresses. The pain point that your idea addresses and the audience may be closely linked.
Perhaps your audience is a subset of the audience of another tool or industry that has a unique problem that existing solutions don’t consider. Maybe there’s a way to solve the problem that your idea solves, but your idea does something better or includes more people. Your idea would approach things in another way, or offer different affordances.
Your idea helps to solve a problem that people experience with the current solution because they are disabled, or from a specific background or ethnic group, &c. Identifying this group can help you define your audience for research and marketing purposes. It can also help to keep this group in mind as you set up your company and design your product or services. We’ll talk more about the importance of this group again later.
Your startup idea may have a larger audience as well. Whatever the size of the audience, it should be a specific group of people. It may seem like if your startup has a vague audience, the audience will be larger. This may be the case.
However, it is easier to tailor your startup’s services or products to meet your audience’s needs if you have a very specific audience. Marketing is also much more effective when you are helping a specific group of people to solve a specific problem or address a specific pain point.
This doesn’t mean that you need to stay with only this audience forever. Just as your startup might address a pain point in a specific area, you may discover further pain points in the future. Every pain point holds the possibility of a new startup idea and a new audience.
It is best to start out small, however. Once your startup has more recognition and more funds you can consider expanding your audience or targeting new ones.
Your Target Audience Needs To Be A Big Enough Market
That having been said, your audience needs to be large enough to support your startup. If your audience is too small, the market may not be large enough to support your startup.
Depending on the service or product that your startup would provide, your audience can be thinly spread. This is true if you can use the internet to sell and move your product or provide your service remotely. In many cases, these solutions will come with their own challenges that will be unique to your situation.
It can be tempting to increase your market size by making your audience less specific. While this can increase your market size, it can also make it more difficult to provide quality goods and services and to market your solution effectively.
Can You Identify And Reach Out To Potential Audiences?
One of the final stages in determining if your startup idea is worthwhile is interacting with some of the target audience. This is best done by combining some of the ideas that we’ve talked about already. The most important thing is to have a specific audience in mind.
If your idea solves a pain point that exists as a result of people being in or from a certain situation, it should be easy to find and reach out to potential users or customers. For example, if your idea is meant to help a group, like veterans, or students, there are often communities that you can find online or in your area where you can reach out to those people.
Reaching out to members of your potential audience is important for many reasons. First, it helps you to gauge how well your idea might be perceived were it to reach the market. If the people that you reach out to seem excited, you may have something.
On the other hand, it may be that you perceive a pain point where most people don’t or you perceive it to be bigger than it is. If this is the case, it doesn’t mean that your idea is bad, it just means that you might have trouble finding a large enough audience to support your startup.
Another reason that reaching out to your potential audience is important is that they can help to guide or inspire you. If you perceived a pain point and members of your potential audience noticed it too, they may be able to help you to craft a usable solution. They may also be able to tell you about other problems that they are having that can help you to perfect the product or service that your startup would provide.
A final reason that it is important to reach out to members of your potential audience is that they are the people most likely to be excited about your product. Your potential audience is the people who will most want your startup to succeed. They may be interested in investing their time, experience or funds, or may direct you to further groups or resources. Usually, it is harder to get a 0.1% market share of a huge market than to get 10-20% of a smaller, defined market.
Your Potential Sales Process
In many cases, a product or service might all the criteria above. But it might be harder to sell due to the long and expensive sales process. Many of the enterprise software solutions fall into this trap. Your new product might be better than everything on the market now. But if the sales cycle takes 12 months to finish, it is going to be very hard to get any traction without spending a serious budget on the sales force.
An easy way to figure out if this is the case, identify how many people need to approve or agree to the solution that can be purchased and utilized. The higher the touchpoints to close a sale, long and expensive the sales process would be.
Remember, thoroughly evaluating your startup idea using this startup guide can provide valuable insights into its viability. It’s crucial to invest time and energy in understanding the market, addressing pain points, identifying a specific audience, and engaging with potential users. By carefully considering these factors, you can make an informed decision about pursuing your startup idea and increase your chances of success while minimizing the risk of startup failure.
Hopefully, this article has given you a lot to think about as you consider pursuing your startup. It’s a lot to think about, but it is best to think about these things before you start to invest real time and energy into your startup. If you are looking for help with developing your startup idea web and mobile development team at Armia Systems, can help.