Hi! I'm Amy, the Founder and Chief Marketing Person here at the Launch Box. My mission is to help entrepreneurs and small business owners like you achieve their dreams by learning how to think more like a marketer.
I’m going to get real with you right now and talk about the first mistake I made as an entrepreneur -- I didn’t validate my business idea before I started the Launch Box. (I’ve actually made many mistakes trying to build my business, but it’s ok – it just means I’m trying new things and evolving!) In my defense, I wasn’t thinking about the business as a long term thing -- it was just a way for me to do a little work while I was getting my MBA -- but, get this, I also didn’t take the time to ensure there was a market for my services when I decided to make it my full time gig either. Oops!
What that means in startup terms is that I was figuring out my market fit at the same time as I was trying to build a business, and I lost a lot of time and money chasing the wrong customer and offering the wrong services. And I honestly didn’t find my groove until I started working with founders and witnessed first hand just how tough marketing can be for non-marketers -- which is also when I realized my true calling was to help other entrepreneurs succeed by being the marketing yin to their business yang.
I know, it’s a bit crazy that I’m spending all this time trying to help founders get started when I skipped the step myself, but the not-so-secret secret I want to let you in on is ‘the number 2 reason most startups fail is ‘no market fit’ (CB Insights)’.
I myself spent years working out my core value while barely scraping by, so please trust me when I say that finding market fit should be every founder’s top priority - it can quite literally make or break your business.
With that in mind, I thought it would be fun to validate the whole market fit thing by asking other marketing experts and entrepreneurs to chime in with their tips. From researching the search volume of related terms to speaking with your ideal client, here are 10 answers to the question, “How can a new startup founder quickly validate the market fit of their new business idea?”!
Tips for Validating the Market Fit of a New Business Idea:
Do Your Research On Search Volume of Related Terms
Assess if You Have An Audience
Understand the Competitors
Use Google Ads and a Simple Landing Page
Ask Yourself If It Solves a Problem
Pre-Sell Your Product
Launch An MVP
Conduct Market Research
Ask Your Ideal Client
Get a Head Start with AI
Do Your Research On Search Volume of Related Terms
If you want to do it quickly, checking the market validity of business ideas via a quick bit of research on the search volume of terms related to your business idea is a good way to get a baseline. If customers have a need around your idea, you'll be able to see that there is significant search volume around those terms - or extremely little search if this is a new idea or something that is underserved in the market. There are plenty of tools to measure search volume, but the easiest is using something like Moz, as the free version will still give you everything you need for a quick sense check of your business idea.
Dragos Badea, CEO, Yarooms
Assess if You Have An Audience
Before sinking time and money into unproven ideas, you should research the monthly search volume of terms related to what you're selling. As consumers, when we need a product or service, we'll likely use a search engine to see what's on offer. If there are no searches, demand could be low. A quick and free market demand test is to try listing your product on Gumtree, and see if you get any bites. If you have lots of interest at a price you can turn a profit, you are on your way! But you need to assess market share and scalability.
Once you have identified your target market, you can use survey sites such as Pollfish to conduct customer validation interviews. This will further demonstrate if your product is viable, and what people are prepared to pay. What services do they currently use, and what would it take to make them switch? Understanding pain points - what you would need to do to make your product a point of difference - can give you leverage in the market.
Jake Munday, CEO/Cofounder, Custom Neon
Understand the Competitors
One way a new startup founder can quickly validate their business idea is to understand their competitors.
Researching how existing competitors are addressing the same problem, analyzing their pricing models, and understanding their customer base can help a founder better grasp the market. Additionally, this research can provide insights into potential opportunities to differentiate or improve upon existing solutions. With this knowledge, founders can determine whether there is enough demand for their product or service and if they can make a viable profit.
Finally, understanding the competitive landscape can help founders develop a go-to-market strategy that allows them to stand out in the marketplace better.
Mariusz Michalowski, Community and Career Expert, Spacelift
Use Google Ads and a Simple Landing Page
A landing page with contact information or Calendly integrated, plus Google search ads, is the best way to validate a business idea. With just a few hundred dollars, you can validate whether there is demand for your idea and whether anyone is willing to pay for it.
Katheriin Liibert, Head of Marketing, Woola
Ask Yourself If It Solves a Problem
Any successful business idea must address the needs of a market in order to fulfill a purpose within it. This is why it's so important to ask yourself what your business is looking to do and whether it is viable in the marketplaces you'd like to enter. In other words, your business must solve a problem for your intended customer.
These problems are often referred to as "pain points," and these are the issues your potential audience is struggling to solve themselves. Once you're able to identify these pain points (if you know the market well, this won't be a tough task), you can then start to consider if your business ideas effectively solve these issues.
To do this, you'll want to consider how your idea differs from anything else on the market and figure out how you can offer your prospective customer an advantage if they're to choose your business over any other similar offerings currently available.
Richard LeCount, Managing Director, USB Makers
Pre-Sell Your Product
It takes a lot of effort, commitment, and resources to launch a new business, which is both thrilling and difficult. But one of the biggest problems for new company founders is successfully verifying their business idea. Pre-selling a product prior to creation is one of the best ways to validate a business idea, create income, and attract investors.
Pre-selling is a strategy that involves offering a product or service for sale to potential customers before it is fully developed, and using the funds raised from these pre-sales to develop and manufacture the product. Pre-selling allows the founder to make any necessary changes to the product before investing significant resources in the development process, which can save time and resources in the long run.
Jeremy Reis, Founder, Explore Startups
Launch An MVP
One way a new startup founder can quickly validate their business idea is to create an MVP (Minimum Viable Product). An MVP is a stripped-down version of the final product that allows you to test the concept, gather feedback from potential customers, and make adjustments before investing too much into the development process.
By launching an MVP, founders can quickly learn if their idea has potential and make necessary changes before committing to a full product launch. Additionally, MVPs are often relatively cheap to produce compared to a fully-fledged product and can help founders save time and money in the long run.
Nick Varga, Chief Riding Officer, ERide Journal
Conduct Market Research
Starting a business can be a daunting task, and it's important to validate your ideas before investing in them.
One of the easiest ways to validate your business idea is to conduct market research. You should start by researching your competitors, their offerings, and the customers they are targeting. You should also look at customer reviews, industry trends, and any relevant articles. You can also gain insights from surveys, focus groups, interviews, and vox pops. This will give you an understanding of your audience, their needs, and what solutions they are looking for.
Additionally, you should run an MVP (Minimum Viable Product) test, which involves creating a basic version of your product or service and gauging user reactions. This will help you identify potential areas to improve before launching. With the help of market research, MVP testing, and other validation methods, you will be able to make informed decisions and build a more successful business.
Scott Krager, Founder, Key Fob Replacement
Ask Your Ideal Client
If you have a business idea and you want to validate it, the quickest way to do so is to go straight to the source that matters the most - your potential clients.
Identify your ideal client (who will purchase this product/service from you?) and ask them directly. You can use different survey platforms to reach out to your ideal clients and collect the data, or you can define the digital communication platforms they use and reach out to them directly.
If you've found that your product/service is in demand, your next step should be diving into your costs to ensure that your idea can also be profitable.
Inbar Madar, Founder and Business Consultant, M.I. Business Consulting
Get a Head Start with AI
I love all of the ideas the experts shared on this topic and just want to add that a lot of new AI tools have come on the market this year that can be used to make the idea validation process a lot easier!
To be more specific, you can use a platform like Chat GPT to see if there is any public research or information available about the industry you are interested in, the problem you are solving, the customers you want to target, or the product or service you are thinking about creating in minutes! This is work that used to take hours … or even days or weeks depending on your search queries.
My advice is therefore to use AI to kick start your research journey and see where it takes you!
Amy Zwagerman, Founder and Chief Marketing Officer, the Launch Box
