You have had that eureka moment. You think you have an idea that could be a business, but is it really a commercial business or just a lovely idea?
For some new businesses, rushing to develop a product without researching or validating its proof of concept is an extremely expensive exercise.
The following is an introductory guide for technology-based businesses but can be applied to other sectors.
It should go without saying, 10 minutes on Google is not research. Terminology and language could mean you have an idea, but miss that it has already been developed in China, India, Mexico or/and Slovakia, for example. To assume that out of 7 billion people on the planet, that an idea is that unique, is naïve.
Remember for a lot of start-ups, they don’t have huge marketing budgets to shout about their product. So just because you haven’t seen the advert on TV, doesn’t mean it’s not happening.
So how to research effectively?
- Know your customer – So you think you have a solution for a problem, great. But how big a problem is it? Is it worth paying for? Why not create an online survey and speak to consumers. Start to understand your potential customers (this relates to point 8).
- Review the technology landscape – There has been a history of apps and websites that have launched too soon. Or invested in technology that requires so much space on phones, ate battery time or took too long to load on a screen that consumers switched off. Can the available technology deliver what you want to achieve? Does your customer have access to this technology or infrastructure, e.g. high powered broadband, live in an area with phone coverage etc?
- Review incubators programmes – look at the type of companies around the world, anyone else looking at the same problem as you?
- Check IP and trademark databases. You don’t want to be accused of stealing!
- Read technology and business publications. Get a feel for the industry as a whole, read business cases, what are start-ups doing that is right and what is wrong in your chosen sector. Anyone working on a similar solution but from a different angle?
- Follow relevant bloggers in the space and again get a feel for what is going on in the sector.
- Check the regulatory environment. The blockchain is a prime example, many governments, regulators etc have an issue with this technology.
- Get an idea of the size of the industry – There are plenty of research bodies, such as Mintel, Forrester's, Euromonitor etc. Even your government statistic’s office will have useful data.
While some are expensive, many organisations publish free shorter versions of reports online.
TOP TIP : Your local libraries will have access to these databases for free.
Based on who you think your customer is - quantify:
- The age range of the group
- Size of this group
- Buying habits of the group
- The purchasing power of the group(s)
- Finally, with this research work, have you found a market you never thought of or another application which is more suitable? Now is the stage to pivot before you invest too much.
It is important not to panic about the perfection of a minimum viable product. The purpose of an MVP is to help conceptualise an idea. It can take the shape of a mock-up App with a series of static screens that demo functionality.
If you want to create an online video platform, create a show-reel of content which can be placed on Vimeo, for example. You don’t need to spend a fortune on hours of content, a few minutes should be enough to demonstrate your tone and style.
If there is a physical element to your idea, 3-D printing has made it more accessible to get quick physical prototypes without expensive tooling costs.
Finally a flow chart of functionality will also help to explain how the solution works. Reading pages of descriptive text is off-putting for investors, bank’s etc. Keep it simple.
So it does depend on your life and situation, you may not be able to spend 10 hours a day on research. So as a rule of thumb, give yourself a month at least to understand your customer, market and tech, especially if you are not a programmer.
It is more expensive when a CTO is not in place from the start, but do educate yourself with the basics:
- What are the coding languages – Java, C++, HTML, etc
- What are the costs to build a basic app, can you utilise Ruby on rails for example.
- Did you know you can outsource build to teams offshore which can be more cost-effective?
- Do you know what UX means?
- What is a solutions architect?
- What is a technical spec covers?
- Understand terms like bandwidth, cloud etc.
- Do you know what skills you need at various stages of your growth?
- Find out about the tax break for R&D?
Learn to protect yourself from inflated tech build costs. You can’t possibly know everything, but understand the basics to help explain what you need from techies. Do not be afraid to push back.
And finally on timing
You may have to consider waiting until the infrastructure and technology is available for your customers before giving up your day job. However, do not procrastinate if the market is ready.
As there is a high chance you are not the only one working on your solution if your MVP has interest from customers and investment, aim to launch a decent version 1. Do not focus on perfection or trying to squeeze in all your functionality in one version, you just might burn up all your investment money. You need to generate revenue.
Instead consider launching a beta version to get feedback, build traction and generate some income.
That way your 2nd release will be better without missing first mover advantage.