How to Validate a Startup Idea

how to validate a startup idea and do idea validation

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In this post, we show you how you can validate your startup idea.  Hopefully, it’s a really awesome idea! Since 42% of startups fail from building products or services with no market need, you’re going to want to validate your idea first so you can prevent that from happening. That’s why you’re here, right?!

That’s because you don’t want to waste your time building a product or service that people don’t want. Correct? And I bet you don’t want to waste your hard-earned money and precious time on an idea that won’t make money, either.

We all have bad or even okay ideas from time to time, so don’t worry if it doesn’t work out.

With this guide, you’ll be equipped with tactics to help you validate or invalidate your idea or product and either prove or disprove its worthiness in the market. And while doing so, you’ll begin to create the building blocks of a startup, so if it’s a good idea, then you’re already making great progress!

Therefore, I suggest reading through this article once over so you learn the process. Then come back to it as you’re working on your idea validation in real-time.

Then, once you’ve found a good startup idea, I recommend following the steps in our post How to Start a Startup, which has 30 steps for you to follow as you build your startup.

However, this guide can only take you so far, as it’s simplifed from our in-depth process from our Incubator Program.

If you want to employ the absolute best validation process ever, you should check out the 14-day free trial of our Incubator Program and join it! In it, you’ll experience a best-in-class startup idea validation course that will blow this or any other guide out of the water.

What Makes a Good Startup Idea?

Your startup idea needs to fulfill a need in the market and you need to know how to fill it.  Another way of saying it is that a good startup idea solves a problem for a specific audience of people and you can do it.  An idea worth pursuing needs to be cost-effective to make so the startup can grow without too many constraints.

Startups, and especially tech startups, should be able to become profitable and scalable without too much overhead. That’s why scalable solutions are so desired by the tech industry.

You’re also going to want your startup idea to have product-market fit. It’s in the same line of filling that market need for your audience. However, there’s more to it than that and there’s a process that you’ll need to take to help you get there. Therefore, I suggest reading this guide on product-market fit with everything you need to know.

It’s usually only when someone is an expert in a niche, should they be able to identify the gaps in that market which allow for the vision of a worthy startup idea to develop.

However, if you don’t know how to fix the problem you want to solve, then you’ll have a lot of trouble successfully building your startup.

In addition, our parents, other family members, and friends should not be the people to determine if an idea is good or not. That’s right – your mom is not a good test market nor a gauge of how good your idea is.

You’ll have to put some real work and research into invalidating or validating your startup idea. But, it’s a lot less work than building an entire startup based on an unsubstantiated idea.

In this quote below, Paul Graham shares what he believes makes the best startup ideas.  He’s a co-founder of the first and arguably most successful physical startup accelerator, Y-Combinator.

the very best startup ideas - paul grahahm

Microsoft, Apple, Google, and Facebook disrupted the status quo and created something beyond what was available at the time.

Except for Google — their differentiator was speed, initially.  They made something that was unique.  And, they knew how to build their products themselves.

As you know, these companies continued to innovate so they could stay ahead of the curve and compete with new and rising competitors, but their core offerings have generally stayed the same.

Knowing how your idea will solve a problem in people’s lives will help you validate it when you do market research, competitive analysis, and personal outreach.

In addition, your startup idea should be comprised of hypotheses of your value proposition and unique selling proposition. They’re both similar but have slight differences.

A unique selling proposition shows how you’re different from the competition and shows what makes you stand out. A value proposition shows people what problem you’re solving for them and how they’ll benefit. We’re not talking about benefits like what features they’ll get.

We’re talking about real benefits and outcomes that they’ll experience functionally, emotionally, and even socially which will help solve their problems. Software, hardware, and entrepreneurial businesses are all about solving problems for their markets.

What factors do you need to consider when validating an idea?

  • Your experience level and that of your co-founders, if any
  • Skills fits, experience fits, skill overlaps, and personality fits of co-founders
  • Your ability to problem solve, learn, and grow
  • Your geographic location
  • How much money you have to seed your venture
  • The amount of time you have to devote to building & growing it
  • Why you are really trying to build this solution and your motivations behind it
  • What the cost of building your solution will be
  • What the customer acquisition cost will be
  • How quickly you can bring the solution to the market
  • The level of competition you have and what their market share is
  • How well you know the market
  • How large the market is
  • What the market wants, how needed your solution is, and how much they’ll pay for it
  • How accessible the market is to you
  • What your unique advantage is
  • How many paid users you need to be financially stable and profitable while paying yourself, co-founders, and other teammates
  • The timing of the venture within the market
  • Your ability to effectively position and market your product or service
  • The impact of your time commitment on your significant other or family members, if any
  • The impact of not being able to bring in reliable income for an extended period of time
  • How big your network is and how relevant what you’re planning on doing is to them
  • How you approach idea validation and invalidation objectively, not subjectively

Next, we’ll show you four steps you can take to help you validate your startup idea.

4 Steps to Validate a Startup Idea

Use these four steps so you can implement a process for your idea validation. Process beats no process 100% of the time.

4 steps for startup idea validation: 1) define goals; 2) develop a hypothesis; 3) experiment; 4) validate

Four Ways You Can Test and Validate or Invalidate Your Startup Idea

1) Validating Your Startup Idea with Target Customers

If you want to validate your startup idea, then you’re going to need to know who your customers are. Not necessarily as individuals, but as users because these are the people that will use your product or service.

Your startup idea should be coming from a need that people experience, or from a gap in the market that’s not being fulfilled, yet a solution is desired.

People actually using your product or service are the ultimate gauge of idea validation. It would be in your best interest to contact the types of individuals that would be using your solution, learning about what their pain points are, and asking them if they’d use your product if it alleviates those pain points for them.

But before you get users, you need to know a bit about what types of people they are. These are called customer personas, or buyer personas, that will match who your target audience is.

A customer persona is a fictional representation of who you believe is your ideal customer. And by locating these types of people, and striking up conversations with them, you’ll be able to test your idea before you even put a product or service on the market.

See the image below from HubSpot, sharing what a buyer persona is.

how to build customer profiles and buyer personas. A buyer persona is a semi-fictional representation of your ideal customer based on real data and some select educated speculation about customer demographics, behaviors, motivations, and goals.

Photo Credit: HubSpot

The customer personas you develop will be really useful when it’s time for you to do your market research and when you do outreach to validate your startup idea.

Moreover, the outreach you do to discuss if your startup idea is something they’d be into using will be your next best friend when trying to validate your startup idea.

However, before we get ahead of ourselves, we recommend you read the guide, How to Build Customer Profiles and Buyer Personas and develop your customer profiles/personas.

Once you do that, then it’s time to come back here and move on to doing market research and competitive analysis.


2) Market Research and Competitive Analysis

Market research and competitive analysis are vital pieces of the puzzle when you’re trying to validate or invalidate your startup idea.  It’s important because you need to know if your startup idea has been implemented already. And you want to know how the market is doing with regard to it.

In today’s technologically advanced world, so many startup ideas have already been done by someone else already.

And you may not even know it!

Part of having a successful startup is finding a gap in the market and being able to exploit it and fill that gap.  In today’s world, if you want to thrive in a big market, then it helps to stand out, be unique, and provide solutions which are cost-effective.

People shouldn’t just start a startup with an idea that’s not unique and offers no difference to consumers. A difference in price isn’t a differentiation with your product versus theirs unless you’re doing something groundbreaking and cheaper.

Too many people make that mistake.

One can have competitors and still have a unique idea. It’s all about your approach, the value you add to your audience, and the problem(s) you solve for them. But you have to add a serious amount of value that is above and beyond that of what the existing competitors out there provide.

In addition, you must know your competitors and what they’re doing to be successful.

Ask yourself: How are you going to successfully build a multi-million or billion dollar company if you don’t know this information?

That’s another reason why you need to have an extensive analysis of your competition and the market.  Below, you’ll find out how to do just that.


Steps to Perform Market Research and Competitive Analysis

Step 1) Research

Start off by researching on the web to see whether your product or service has been implemented by someone else already. This is one of the basic preliminary actions to perform before you build a startup. You can go about this by researching keywords and phrases on Google that describe your idea. Try every variation!


Step 2) Record the Research

Keep a record of every website you visit that is similar or equal to your idea via Google sheets and the search terms you used to find them. If you’ve signed up for our Startup Incubator Kit, then use the market research and competitive analysis template made available to you.


Step 3) Analyze Findings

Analyze the offerings and differences between them and your idea from within your spreadsheet.


Step 4) Scout Competitors Automatically

Set up Google news alerts to notify you when your competitors are mentioned in the press so you can keep an eye on them.


Step 5) Keeping Track of Competitors

If your idea turns out to be good, then you’ll want to check out your competitors monthly and keep track of any changes you see occur.

This will be regardless of whether or not you see a Google news alert.

Set up a monthly repeating calendar notification to help you stay on top of this task.


Step 6) Market Research

Look up market statistics for your target market.  Find as much data as you can on:

  • The size of your target market (worldwide and in other countries/continents)
  • Information about your target customers such as demographics, interests, behaviors, and devices used.


After Market Research

When you’re developing your concept, you have to ask yourself and answer a handful of important questions.

The purpose of these questions is to identify if your hypothesis still has merit based on the market’s saturation or lack thereof. However, there’s still work to be done to validate or invalidate your startup idea.

Answering the following questions will help you solidify your idea and the framework of your startup.


Questions to Ask and Answer:

  • Do I have a business model that will allow my startup to make ample profit?
  • Has your idea been done by anyone else?
  • Can you offer something different that adds value to and solves a problem for your target customers?

If there are too many competitors and no opportunity, then maybe you shouldn’t pursue your idea any further.

However, if your idea is unique, then that’s great, but your idea still isn’t validated yet. You have more work to do. More work — It’s the story of our lives! Haha.

You make sure that you have a business model that will be profitable and attractive to your target customers.

See which of these 10 B2B and B2C startup business models will work for you and for your target customers. It usually has to work for both ends.  There are a few exceptions, but they’re generally outliers to this rule.

The next section outlines the next steps you should take to validate your startup idea via feedback collection.


4) Idea Validation by Feedback Collection

Below are two ways you can collect feedback to help you validate your startup idea.

1) Individually contact target users asking them for feedback on your idea.

You can find and talk to target customers through social media channels, message boards, and forums. Contact up to a couple hundred of the people you describe in your customer personas.

Tell them about what you want to do with your startup idea and ask them the all of the questions except for the first question as described in #2.

2) You can validate your startup idea by collecting user feedback from a survey on a landing page you create with the description of your idea. The survey could look like:

  • Was this product idea what you expected when you visited?
  • Is this something you would buy if it was available?
  • Would you recommend our service/product to a friend if it were available today?
  • If you would buy it, what is the most you would pay for it?
  • At what cost would you consider it to be too cheap?
  • Do you have any suggestions on how to make our product/service better?

You can also have a call to action to get people to sign up to your email list for updates.

If you had an overwhelmingly good response to this from your target market from your marketing efforts (hundreds of subscribers after marketing it for a few weeks), then it’s probable that you’ve found a worthy idea.

However, a landing page is also considered a vanity form of a minimum viable product because it’s not actually a product or service.

Feedback collection through interviews and surveys are the best ways to validate your startup without building a real minimum viable product.

A MVP is the next step once you’ve gotten the green light from doing your outreach.

4) Build a Minimum Viable Product (MVP)

A minimum viable product is basically a barebones version of your startup’s product. An MVP is used so you can test the hypothesis of your startup idea in a real-time environment. Because of this, not much can take place of a minimum viable product.

But it’s also the most expensive and time consuming of the processes. And it’s very hard to let go if the MVP fails to deliver.

In addition, this can drag you into a prolonged startup journey that could be very hard to get out of.

However, an MVP is the “cheapest” workaround for actually building your idea into a product or service without completely building it out.

But it can still cost a lot of money, especially if you don’t already have much money.

If you are a developer, then it is your investment of time that will be your biggest cost.

Minimum Viable Product Pyramid

Even though you can validate your startup idea with a MVP, I’ve found it’s best to test the market first with one of the three former methods we shared when validating your idea.

Then, once it’s validated, you can move on to the MVP and see if that matches the behavior of the three former ways to validate a startup idea.

This way, you save time and money from having to build a MVP.

For a better description of how to build an MVP, we suggest reading How to Build a Minimum Viable Product – StartupDevKit.

In it, I show you seven ways of building an MVP, as well as provide resources for tools and service suggestions.


Next Steps

If your idea holds up after all of the above, then get started on your executive summary and find a co-founder to build an MVP with.  However, many people that want to launch startups can’t code.  If you don’t code, then look for a programmer/developer who might co-found the startup with you.

To find one, check out the article, How to Find a Co-Founder and What to Look For to help you find a developer and other co-founders. Alternatively, you can hire a developer, which is obviously more expensive. In that circumstance, you should check out the post we have regarding where to hire contractors and freelancers or you can go with a development agency.

Whether you can code or not, you’re going to need to write down how your product/service will work and function, called a functional specification.

If you’re having someone else build it for you, then you should be serving the contractor, vendor, or manufacturer a non-disclosure agreement to protect your idea.  You’ll use it to help share your vision with the developer you work with.



The prospect of creating a startup is so exciting, but you should not let it get the best of you.

Before you even start building your product, always make sure you validate your startup idea.

Be smart about your startup idea.  Don’t blindly build a startup without determining if it’s something your target market actually wants and needs. Do a competitive analysis, market research, feedback collection, and executive summary.

Save yourself from the heartache, headache, stress, and empty bank account stemming from a bad idea.

You’re better off spending a month on idea validation than spending a year building a product to find out that too few people want it.

It will save you time, money, stress, and relationships.

However, joining our Incubator Program and taking our idea validation course will help you even more.

Remember, the actions you take to validate your startup idea will be of great benefit to you if your idea holds up.

This is because you’ll need all of the information you compile countless times in the future.

If it’s validated, all of that legwork creates a true a win win scenario for you.

Make a product people will want. Better yet, make a product people need.


What’s your biggest takeaway from this post?



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