Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.
4 min. read
Updated January 5, 2024
You have an idea. You’re excited by its potential and eager to make it a business.
But don’t pour your money into it just yet.
You must answer this crucial question—will people buy your product/service?
Not sure? Then you need to validate if there’s a market for your idea.
Idea validation is testing the need for your product/service in the market.
It should tell you if people are likely to purchase and if your idea can be profitable.
Validating your idea mitigates early risks. You gain insights into potential challenges and market receptivity before investing significant time or resources. You’ll avoid making a product that lacks market fit.
And if there is a fit—use the process to refine your idea to better meet customer needs.
Determine if your startup idea works by following these simple steps.
You need to formalize your idea. Take it from a passing thought or scribbles on a napkin to an outline of how it works as a business. And all you need is a one-page plan to do it.
Dig Deeper: How to go beyond the napkin
Not every business idea is a winner. It may look good on paper but lacks qualities that allow your new business to grow. Learn how to identify those traits and determine if your idea is actually good.
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You can’t just assume that people will like your idea. Sure, you should have data to support that theory. To be certain, you need to get out and talk to people. Here are six ways to do that.
Dig Deeper: 6 idea validation tactics worth trying
Conversations with your target audience should do two things—verify your idea works and provide valuable feedback on the product or service. Now, you just need to test it with actual users.
Dig Deeper: How to find beta testers
It’s not enough to collect feedback, you need to use it. While we can’t tell you exactly how, try following a framework of categorizing the feedback, sharing it with your team, and requesting a follow-up.
Dig Deeper: How to make the most of customer feedback
Following the above process will help you validate an eCommerce product or service. But there are more specific steps you can take to fully vet your idea online.
Dig Deeper: How to validate your eCommerce product idea
What does it take to test a product or service idea with paying customers? Let’s introduce you to the concept of minimum viable product (MVP) and how to build products for testing.
The MVP is your bare-bones attempt to turn an idea into a business. But you can’t stop there. You need to go further and turn it into something your customers love.
Your idea solves a real-world problem, works as a business, and interests potential customers. You appear to have market validation—so what now?
You don’t own your idea. So, how do you keep it safe? Learn what legal protections are available and how to start discussing your idea without giving it away.
You need capital to turn your idea into a business. While there are other necessary steps in the startup process, these four will fast-track you to pursue funding.
Validating your business idea will set you up for success or help you avoid something destined for failure.
By the end, you will know far more about your business, the market you’re entering, and, most importantly—your customers.
But your research shouldn’t stop at validation. You need to dig deeper and fully define who your customers are, what they want, how they work, and your relationship with them.
Click here for the next step in your startup journey—conducting market research.
Simplify the idea validation process with these templates and tools.
Business idea validation checklist
Want to find out if your business idea is a winner? Work through this checklist to test it.
One-page business plan template
Document your research, explore the specifics of your idea, and outline how it could work as a business.