It’s tough being an entrepreneur. Sometimes we’re struck with brilliant startup and product ideas during romantic dinners and sometimes the brilliant idea we scribbled on our girlfriend’s napkin isn’t so brilliant after all. If you’re an entrepreneur, you probably think of dozens of near-excellent ideas daily – in the shower, in the car, in the office — constantly wondering if someone’s already developed an app for your very unique idea.
If someone didn’t, it’s probably not long before your excitement gets the best of you, and you find yourself already drafting your next startup’s mission statement in your head. But in a few months, you might stop and realize that you rushed into a startup that doesn’t have an explicit market need.
Unfortunately, this happens a bit too often. Or, to be exact, it happens 42 percent of the time. In this post, you’ll learn four ways to test your startup idea before you ask your brother-in-law for that loan.
1. Check out the competition.
Your competitors are a great indication of the direction your startup should go and what aspects are lacking in the industry. First of all, if you have a viable direct competitor with active users, you know there’s a market for your idea. While healthy competition is always good for a given industry, knowing your differentiator is smart, especially if your rival is already very popular.
A good place to start is with features that competitor is lacking. For example, when Uber launched in 2009, there were many other startups eager to get in on the action. Lyft and Gett were some of Uber’s biggest rivals, but with Uber being extremely successful, they needed something to focus on that would tempt people to try its services as opposed to Uber’s.
For the Israeli startup Gett , this was the surge charges. Since Uber charges an extra fee during prime travel times, such as during morning and evening commutes, Gett decided to run a campaign called #surgesucks to differentiate themselves. In looking to improve on Uber’s flaws, Gett was able to establish a successful differentiating factor, helping them break into the business, and gain a significant following.
Leaping over to a different industry, Israeli startup Pepperi says it has identified a market opportunity in the CRM space for consumer packaged goods companies.
“We realized that traditional CRM vendors had neglected this space so we chose to focus on this blue ocean with a vertical-specific platform,” Pepperi CMO Oren Ezra said.
2. Conduct market research.
Now that you know what the competition is up to, it’s time to look into the market with the same level of scrutiny. Looking into the best methods, platforms and ways to gain exposure is the first step to making sure that your startup is on track to get the right exposure.