A good startup idea is all it takes? False!

As many of you know, 90% of startups die within the first year. The statistics do look scary, but despite these figures, hundreds of startups try to succeed each year. Why? Well, there's another mantra you've learned at school: if you think smarter and work harder, things still can happen. Or can't they?

Hopefully, they can. In fact, such a failure/success ratio is a reminder that for every nine failed startups, there’s one winner. Puzzled, you may ask yourself: “But why on Earth does the article start with such encouraging figures?” 

It’s simple. When an idea hits you, you are too optimistic and already counting profits in your mind. These stats help startup founders choose the reality pill instead of daydreaming, that’s why. 

Ideas

So what's the reason behind failure? The infamous "you build a product no one wants" verdict is the answer. A survey by Fortune magazine reports that 42% of failed startups indicated the lack of a market need for their product as the biggest reason for their collapse. 

Have you seen “Office Space”? A cult classic from Mike Judge (Beavis and Butthead creator), the movie tells the story of Peter Gibbons, a frustrated and unmotivated programmer, and his friends/co-workers, Samir Nagheenanajar and Michael Bolton.

When talking about generating ideas, the guys hear the story of their co-worker Tom: 

Michael Bolton: You think the pet rock was a really great idea?

Tom Smykowski: Sure it was. The guy made a million dollars. You know, I had an idea like that once. A long time ago.

Peter Gibbons: Really, what was it, Tom?

Tom Smykowski: Well, all right. It was a "Jump to Conclusions" mat. You see, it would be this mat that you would put on the floor, and it would have different conclusions written on it that you could jump to.

Michael Bolton: That is the worst idea I've ever heard.

Samir Nagheenanajar: Yes, this is horrible, this idea.

And guess what. Contrary to what the characters said, it turned out that people do need this mat. This mat is far from being the most popular item on the market, but still, someone made a product out of a seemingly bad idea. And that's precisely the point.

There's a difference between an idea and a product itself. A mobile app that sells, say, sneakers is a product, not an idea. Sometimes you think more about the implementation rather than developing (and improving) the initial idea.

What’s more, you may create a bad product for a good idea, and vice versa. In other words, ideas could be implemented in many ways (products), but not each of them will be successful. Tom’s idea wasn’t that bad, but his presentation was. 

Validation

So yes, the truth hurts: many startups fail because the initial idea was doomed right from the start. At the same time, it is not unusual for startup founders to go all in before they've validated their idea. So how do you avoid creating products that nobody wants? 

Fair enough, startups should be focused and committed to their passion. That's the essence of a startup, right? However, because of limited time and resources, startups need to invest their time and money wisely. So it's crucial to test business ideas before taking any further steps. 

What is business idea validation anyway? Business idea validation is testing your concept before launching an actual product in the market. When validating your business idea, everything counts: the current market, the needs of customers, and competition. 

Validation shows whether there is demand for your product through interviews with people in your target audience. Most importantly, idea validation must occur before you have made a large investment of time and money into your product and moved into the active development phase.

Even a great idea isn't enough to start. Do your homework and google your competitors. Secondly, ask your potential target audience for honest feedback. The end goal is to ensure you use your time and resources appropriately. With that knowledge, you can promote your product in the marketplace based on your findings.

Actually, the whole validation strategy can be outlined in the following steps. Answer the following questions when defining business goals. 

• Problem. Is the problem we want to solve real and important?
• Solution. Will our product/offer solve this problem?
• Features. How will the most important features of the product work?
• Business model. Is it viable and scalable?

A lot of startups make a common mistake: they initially think only about their product product-wise. I mean, they dwell on its advantages, new technologies, and all the innovative features it comes with. And then they experience “unexpected” difficulties with business development.

To avoid this, identify the problems that your product solves. If your product does not solve any problem, then the market does not need it. Define the problem and make sure your target audience also sees it as a problem and, most importantly, really thinks it's a problem worth solving.

Focus less on the product’s features and more on explaining its value to customers. The value proposition is the expected benefit that people receive from using your product or service. These value propositions are in close relation to the problems you found earlier. 

Therefore, make sure that you form them and can convey them in a simple way to receive actionable feedback.

Prototyping

Create a presentation. Have you heard about the pen-and-paper method? Quite often, startup founders draw a future project on a sheet of paper. By the way, sketches tend to bring more honest feedback in comparison with polished prototypes. Alternatively, you may record a video presentation explaining in detail every detail and functionality of the future product.

Develop an MVP. A minimum viable product (MVP) includes enough features to attract early-adopter clients, gather feedback, and validate your idea early. In other words, developing an MVP allows spending less time and resources evaluating the viability of an idea. This way, you can adjust your business idea or completely abandon a not-so-interesting project.

I also recommend using low-code platforms. For instance, builders such as Draftbit, AppSheet, or Glide help you easily develop mobile apps using a visual editor. In their turn, platforms like Tilda, AirTable, Integromat, Collabza work well for web applications. 

What’s next?

Let’s sum up the points you should think about.  

• The target audience. Determine as accurately as possible who your potential clients are.

• Problem. Clearly articulate what problem (or "pain point") of the target market your product solves.

• Solution. Determine exactly how your product solves the customer's problem.

• Risks. Try to allocate all the pitfalls. What risks does your idea’s validation contain? For instance, do you have a budget for advertising? What about technical talent to develop an MVP, etc.?.

Startup pack for startup founders

Okay, let’s suppose that you have an awesome startup idea. You’ve clearly been thinking about steps you should take to move forward. You’re energetic and ready to go. Akveo is a former startup, so many of our employees know this feeling. 

In short, this startup guide is a collection of actionable insights and personal stories for early-stage companies’ founders. Download our interactive startup guide and grow your business.

Startup Trends

When coming up with ideas for a startup, analyze all the recent startup trends in the market. Education, supply chain, and climate change: social startups concentrate on solving today's pressing problems. Even though it’s close to impossible to predict things, choose the idea that has more chances to keep its relevance in the long run.

As the one and only Dwight K. Shrute from the Office put it: "Whenever I'm about to do something, I think, 'Would an idiot do that?' And if they would, I would not do that thing."

So I hope that all your ideas will be - ta-dam!

Useful articles we’ve selected for you

Jokes aside, here at Akveo, we write a lot about startups. Here’s the list of articles that solve a specific problem you may face: 

• Startups in 2022: 6 trends to watch this year
• 8 innovative marketing tips for startups: how to develop the right strategy
• 13 best early-stage startup advice to survive during the downturn
• How low-code tools can help startups during the downturn of 2022
• How to find funds for your early-stage startup in 2022

And that’s not all. Subscribe to our blog to get the latest insights right in your inbox.  

Here’s how Akveo can help your startup

Akveo offers custom software development services to startups of any size. As a technological partner you can trust, we will deliver everything from an MVP to a full-fledged software product on time and on budget. 

The global startup scene is vibrant and full of beautiful ideas, and we believe that ideas rule the world. Let’s translate your vision into a scalable and feature-rich solution. Contact us today!