Is your idea worth your time? Doing research could help you validate your idea
Founding member of burglar security company specialized in perimeter security, CCTV, access control and home automation. Founder of technology startup, developing a new way to engage with kids in physical activities and education by using Microsoft Kinect motion sensor.
Pavel told us the story of when he decided not to pursue an idea (sunglasses that stick to your shirt via magnet ) because it wasn’t worth his time. He conducted research on the types of sunglasses, cost of parts and even looked into patents but the time, effort and cost, regardless of how simple the idea was, was not worth the revenues it would generate.
Identify your pie. Niche target for a piece of your pie is good
Here are some tips he recommended on identifying your pie (market).
- Research could be a daunting task, outsource it – Elance or upwork
- Google Alert is your best friend – You can get news into your inbox on just about anything. Also, just google it
- Patents (Google Patents) – It is free and more user friendly that the database on USPTO website. Use it!
- Identify your competitors – Find out what they are doing wrong and convert undecided customers
- Make an emotional customer connection – Ex. Uber doesn’t take long routes to your house
- Identify your customers by asking the right questions
Matt is the founder and CEO of Fund That Flip. Matt graduated from the NYC Winter 2013 FI Class. Since graduation, Matt and FTF have gone through NYC top-accelerator program ERA, developed full-stack tech, are generating revenue and have raised $2M+ in venture capital.
Matt walked us through the common mindset all entrepreneurs should have when: (1) forming an idea and (2) getting customers. He also shared some great quotes and resources for us to read.
Forming an idea
There is no such thing as a new idea. There is a high chance that someone had thought of your idea or has implemented it differently, etc.
Competition validates your idea
- Competition can be your friend. You don’t want to be the only guy in one space. Studying your competition is the fastest way to develop your idea into a real business.
- Look harder, especially at adjacent competition as well direct competition.
- Look at the startup graveyard. For example, the TechCrunch Startup Deadpool (Deadpool, so relevant). Reach out to the founders of the failed startups and interview them. I feel like we don’t do enough of this.
- Are you solving a big enough problem for enough people?
What does every business need? Customers!
- They help you stay laser focused
- They inform competitive positioning
- They help you refine your market size
A market with a lot of potential pulls the product out of the startup
Matt talks about two ways to size the market
- Top Down – Example: 1 trillion houses are sold. 5% of these are flipped ($50B)
- Bottom up (preferred by investors) – Average price of a house is $150,000. 500,000 homes are flipped each year ($75B)
When a great team meets a great market- something special happens
Finally, Matt left us some resources:
- Lean Startup (book)
- Start with Why – Simon Sinek (Ted Talk)
- TechCrunch Deadpool – Failed Startups
Trained in ethnography, engineering, and core business disciplines, Boris is a strategy consultant who helps companies adopt a customer-centric, discovery-driven approach to growth in addition to working with major brands in the U.S., Canada, and the U.K.
Boris gave us a quick deep dive and a look at some of the important nuances to think about when doing customer research.
Fail fast, fail cheap
The goal here is not to fail, obviously, but to help you validate your idea quickly and cost-effectively. This means:
- Get out of the building – talk to your customers
- Align, learn and decide – write down your ideas and circulate them with your team
In a saturated market, you are not looking at it as a problem solution model but more of a switch
This goes back to Pavel’s statement – think about your competitors and what they are doing wrong then convert the undecided. Capitalize on their weaknesses, yes!
Identify your Personas based on:
Problem vs Solution
Don’t think about getting millions of customers now. Think about serving 1-10 now. Also when conducting interviews, LISTEN, DON’T TALK.
Boris also recommended the following books:
- Entrepreneur’s guide to customer development
- Talking to humans
Time to fire up Kindle and Audible!