How to validate your startup idea with MVPs?
The goal of every entrepreneur is a self-sustainable business, generating revenue and continuously growing. If the revenues are higher than the costs, you’ve made the first step.
For a viable business, you need customers. For customers, you need to solve a problem. In order to solve a problem, you need to identify it first. The ecosystem of startups has been growing rapidly in the last 10 years. New accelerators appearing all over the place. New lectures about how to become a successful entrepreneur and enough events to be busy every weekend throughout the year. And the ecosystem is still growing and growing, day by day. The events and lectures are well organized, held by successful entrepreneurs of the last generation and still, it seems like there’s no difference between event A and B. Accelerators popping up at all corners of the cities for all kinds of areas. Food, IoT, Healthcare, Edtech, Fintech and and and – you name a field, there will be for sure the right accelerator program for you. Somewhere. If you find it between the vast amounts of flyers and advertisement campaigns at all the events you’re attending since you want to become successful.
The offerings from the accelerators are amazing: Free location and Internet access (yes, that’s a very important thing these days), free coaching sessions and sometimes even free coffee. Moreover, they even offer you money to spend. Money! Not the piece of paper you used to play monopoly with, but real money! It seems like everyone is fighting to get the entrepreneurs into their programs. Even though you don’t have a successful business yet, you’re already like a superstar having people around you which want your signature in order to join their programs.
In those acceleration programs, you will do the usual stuff every young startup has to do.
- Complete your team – find co-founders.
- Build a prototype.
- Get customers.
- Get rich and famous.
Step 1 and 2 are unavoidable except in case you’re one of the superheroes seeking high-risk environments.
Step 3 is necessary to get customers. Or do you think someone would buy something which could hypothetically exist once someone else starts building it by the end of a deadline you will break anyway since you’re a startup? Here we are, probably at the most important milestone in your startup journey. Now you will have to get dirty hands and do something. Don’t think and ask but do! There are many saying in startup slang focusing on exactly this part. Fail fast, fail forward is just one of them. You need to give your customer something in order to get their feedback, in order to validate if your business has a future or not. Please, don’t just make a survey and ask people if they would be willing to pay for something. Are you willing to pay good money for a good car? Yes, why not. But if I want to sell you the car right now, do you take it? No, maybe the time isn’t the right one. Maybe, I don’t even need a car.
Once you have a prototype you can start validating it in step 4 by trying to get first customers. It’s important to note here, that the prototype of your business doesn’t have to be physical. Therefore, often it’s better to just use the term minimum viable product (MVP). It even sounds fancier, right? Think of the MVP as being a tool in order to figure out if your idea could work out or not. Ideally, you start with a hypothesis which you want to validate using the MVP.
We won’t go more into detail about step 5. Just enjoy your Lamborghini and private jet. And please, don’t forget about supporting all the other potential unicorns!
*Disclaimer: Volvo actually has nothing to do the content of this text but we needed a V