Startup idea is always entrepreneur’s dilemma and it is extremely difficult for him to make a decision. Entrepreneur should not jump in to venture because it wants to get on the startup band wagon. He should think about doing it because he has a conviction about the idea and he feels that it would serve a purpose. The important part is to find out what shape the startup idea going to take. It is always said that one should think out of box. Any out of box idea is going to be first timer and innovative. However converting the same in to commercial model is most important. Enough research and thought process has to be given to a startup idea to make it success.
Validation matrix for a idea
Any startup idea needs to be validated on multiple aspects from the point of view of commercialization. In order to make it simple to analyse and adapt following are the four segments in which the idea can be classified. These segments are based on the broad classifications.
- Segment I – Idea is addressing the existing pain point of the consumer
- Segment II – Consumer is not aware of the pain point due to habit. Make him aware of the pain point and create a need for your product / service.
- Segment III – Create a simple and alternate way of performing a task and create a need for the same.
- Segment IV – Create a convenient market place and reduce the customer effort to acquire a product or service. Create a easy accessibility / experience of the product.
The idea will certainly fall in to one of these segments. Each of the segment has its own life cycle milestone which will decide the speed of the growth, obstacles and road ahead.
Life cycle milestones under each of the segment for a startup idea.
Segment I – Idea is addressing the existing pain point of the consumer.
- The pain point of the consumer is existing and is already identified. Because of this there is a high possibility of meeting the competition at a very stage. Since the pain point is identified there will be few solutions existing in the market.
- Due to the existing competition your own product has to be a unique and differentiated in comparison with other available products. The product / service should have a USP.
- The consumer should be able to identify himself with the product or solution and should be able to relate as solution to his problem. The message has to be extremely clear.
Segment II – Consumer is not aware of the pain point due to habit. Make him aware of the pain point and create a need for your product / service. This segment is based on the consumer’s ignorance because he does not have a solution.
- A product or service in this segment is really new and out of box. This idea will get the first mover advantage in the market.
- There will not be a parallel product and consumer needs to be educated. This would result in longer sales cycle and it will be come concept sale.
- Adaptability of the product will be slow and there wont be easy early traction.
Segment III – Create a simple and alternate way of performing a task and create a need for the same. The consumer here is not really having a pain point and there is no need to address the same.
- The product and solution here will fall in to new products with first mover advantage. These products or services will belong to innovative products category.
- Because of the innovative nature it takes time to convince the consumer to try alternate product since his conventional product or solution has not failed.
- The product or service should be very easy to understand or use. Complex products will alienate the consumers.
- Because of the uniqueness the product should be easily scalable and should be a mass product.
Segment IV – Create a convenient market place and reduce the customer effort to acquire a product or service. Create a easy accessibility / experience of the product.
- In this segment the product is of service nature and there is no inherent uniqueness.
- The product plays a role of facilitator and service the easy accessibility for the consumer.
- However for a market place to become successful it would take a long time for users to get confidence in the platform.
- Marketing becomes hard ball since you need to have equal growth on demand and supply side.
It is important for him to understand which of the segment he falls in to and what would be milestones in front of him. Based on the milestones he can do market analysis and market research for viability and sustainability of his startup idea.