So you have a million dollar idea? We believe you!
But is that enough? How would your idea survive the market? Does your idea have the power to be a billion dollar business or it’s just one more idea in the bunch of ideas creating no wonders?
Let’s look at some eye-opening facts about tech-startups as reported by The Tech Nation.
There are about 47,000 digital startups in the UK alone. How many out of them do you think really succeed? Not even 50%, yes you read it right…NOT EVEN 50%! And possibly less than 10% will survive beyond the fifth year and achieve the exponential growth that everyone dreams of.
Having an idea is not enough and before you begin your startup journey, you need to have answers for some of the most fundamental questions about your idea, such as:
- Who is the user?
- What are the user problems and needs?
- What is the scale of these problems?
- How do you solve these problems?
- What value will be created after solving these problems?
- How do you monetise this value?
- Would the user pay for this solution? If not, who else would pay for it? Who is the customer
If you can answer these questions, great! Don’t waste time reading further… but if not, then, my friend, your eyes are scanning the right words.
We at Innovify, a tech-startup incubator, are passionate about nurturing tech-startups and walk with a clear vision to empower brilliant ideas & convert them into successful businesses. We understand what startups need and we approach their ideas with the 5 things quintessential for any startup to make its million dollar idea a billion dollar business; idea validation, mentoring to receive appropriate guidance throughout the product life cycle, apt product management & development,legal protection & legal establishment and seed funds to sail through the valley of death.
5 things quintessential for any startup are idea validation, mentoring, apt product management & development, legal protection and seed funds
We have worked with a number of startups in wide variety of domains ranging from Fintech to Social Media. Innovify follows Lean startup principles religiously with Agile methodologies like Scrum, Kanban, XP, TDD, BDD, CI, CD, etc to enable startups as risk tolerant as possible. Based on our experience with all the wide range of startups, we think that each startup should go through these three phases of growth: Ideate | Incubate | Accelerate to achieve the success and be sustainable.To put it simply, these are the three phases that Innovify takes your million dollar idea through to turn it into a flourishing billion dollar business-Ideate: Putting life into your idea, Incubate: Plunging into the market, Accelerate: Soaring to the highest peak of success.
But for this post, let’s not bombard you with information and concentrate on how we validate all the startup ideas. Having a million dollar idea brings you just to the beginning of the ’ideate’ phase. Innovify takes you on a journey with your own idea through structured brainstorming that bridges the gap between your product concept and consumer needs. Let’s suppose you are the owner of this million dollar idea, these are the questions we press you to ask yourself and we ensure you have the answers!
1. Who is your target user?
Your startup needs to identify all the different kinds of users to prioritise them. The most important user and his requirements will always take priority over other users. So, always initiate by identifying these users’ needs and problems. Identify how all these users are interconnected; what are they consuming/producing (value) and how is that flowing between them, supporting tools, processes, infrastructure, etc help enable this flow.
2. Where do your users stand in the value flow?
Here are two ways to map this value flow. First as a value chain, which is a simple tool to demonstrate a linear flow of value, more suitable for traditional industries; and second as a value network, as modern industries have a complex network of interconnected entities creating and consuming values.
The value chain analysis is important for startups as it enable them to visualise the overall production process in a very simplified manner. This would enable the startup to establish where it is best positioned to create and capture the most user value and identify both the upstream and downstream dependencies of the production process and route to the market. Innovify typically provides startups with best possible upstream elements of the product development process so that they are more focused towards their users and markets.
Value network analysis is more complex but it enables the startup to identify all the important entities and actors; analyse their inter-dependencies; and the flow of information and value between them. Drawing a value network would enable the startup to see the bigger picture and identify the best possible position in the network, secure key relationships, reduce risks, tweak the business model to create and capture the most value.
You would be surprised that after analyzing your startup value network, you may want to change the business model focusing on your user and customers in a completely different way than the way you envisaged earlier. Possibly the million dollar idea is just about to become a billion dollar idea!
Drawing a value network enables startups to identify the best possible position in the network, secure key relationships, reduce risks, tweak the business model to create and capture the most value.
#TIP: Value network analysis potentially enables startups to discover hidden values and better business models, giving them a competitive edge.
But as a startup, you need to know the difference between a prototype and an MVP (Minimum Viable Product). Prototype is usually created to visualise the solution for the early users and collect their valuable feedback that can be further developed as MVP. A prototype is merely a working model to demonstrate the user problem and the solution to it. Sometimes, the prototypes are further developed as high fidelity prototype to represent the most likely incarnation of the product; however it is still not a functional product.
The most important element of the billion dollar idea is a scalable and sustainable business model. By doing such value based analysis along with complementary primary and secondary market research your startup can continuously refine and tweak the business model and establish the best competitive positioning and route to market.
Having identified the users, their problems, the value creation, the network and the positioning, time comes to visualize business intelligence solutions and create a product prototype for launch.
3. How would you validate your product prototype?
Before jumping to launch a full-fledged product, you still need to validate your assumptions and your business model. Innovify typically works with startups to create a low-fidelity prototype of your tech-product, which is usually then developed further as a high-fidelity prototype for early user testing.
It’s Important to know the difference between a prototype and an MVP
4. What if you are targeting the wrong market?
An important factor that leads your startup to hard hitting failure is poorly planned product launch in a non-forgiving market. To safeguard your business from such failures, Innovify, through iterative research and validation, identifies the right target market for your product launch to generate the best consumer interests and collects feedback for further process and product improvements.
To do so, you need to launch not a full-fledged product with superfluous functionalities but an MVP that is functional enough for the users to realise its value. Typically the MVP will focus on the key use cases for the product and implement them in the best possible manner enabling users to start realising the value of the solution offered. At the same time, you need to launch this product to the right user segment or else you risk alienating the market and head towards failure.
Launch the product in the right user segment or risk alienating the market and head towards failure
Image Source: https://www.pinterest.com/pin/168744317263014917/
These are just some of the activities that you would need to do before assessing your idea as a billion dollar idea. Also note that these activities are not done in isolation but are done in parallel iteratively throughout the startup journey because the industry, the users, the competitors, etc are moving faster than you think. Your best possible business model today may not be viable in six months time. Hence, you need to continuously be at the top of your game.
Business activities carried out in isolation often have the disadvantage of not being exposed to a multi-dimensional approach and fail!
Innovify, with its multi-industry experiences with startups & entrepreneurs, guides and mentors them to ideate using a systematic approach. Today, Landbay, AtMayfair, Kwanji, Unzipped, Flatchecker and many other startups are driving on the highway to success with Innovify as their product management partner/co-founder.
#Tip for Entrepreneurs: Never start with good, especially when you have the best option available to start with.
Stay hooked for more insights on startups, product management and a lot more…Cheers!