Evaluating Business Ideas
The Best Customer Research Methods
Written by James Garvin for Gaebler Ventures
You can Google and Google and Google trying to find information to validate your business idea, but the most effective means for validating a business idea is speaking directly to the customers.
Customer interaction to validate a business idea or to search for a business idea is the most direct and effective means to validate ideas or find new ones.
Every customer has a problem that needs solving, yet many will not readily admit or even know that a problem exists. This is where, as an entrepreneur, you come in to find the problem and propose a solution that fixes it in a means that will be used by your target customer.
There is a reason why many entrepreneurs start businesses within the industry that they previously worked. They often see a problem first hand while working within the industry and that's when the little light bulb goes off with an idea to solve it. Because of their direct interaction with customers that have the problem they are looking to solve, they are easily able to validate their ideas by speaking directly with those potential customers to validate the assumptions behind their solution.
A methodical approach to validating a problem and testing a solution is to walk step by step through how your customers currently approach the problem. Understand in depth why they are doing it this way (is it cheaper, easier, or simply this is how it has been done for 10 years) and who else is involved in the process. If possible, physically observe your customers in action while doing the very task or problem that you are looking to solve or ask them to walk you through the process verbally.
The most challenging business solution to give to any customer is a solution in which they either do not have a problem for or in which it is not a task that they currently do or want to do. Trying to change customer behavior with your solution has an extremely high hurdle rate when getting customers to adopt something new. A lower hurdle rate exists when you find a job or task currently being done by a target customer and you find a way to do that job in a cheaper, faster, or better way.
When you first meet with potential customers to validate an idea, resist the temptation to pitch them your proposed solution. Rather, spend your time deeply understanding the issue you are trying to solve, ask lots of questions, and if possible, watch them go through the steps (or have them show you) they take to complete their task. After you have seen and fully understand what the customer is trying to achieve and how they are going about it today, ask simple questions such as, "What if you did it this way or Have you ever tried to do this?" With out being to direct with your business pitch, listen to how the customer responds to your initial proposal to change the way they are currently completing their tasks.
Your business ultimately ends by selling a solution to your customer and therefore should start with the customer to understand the problem and validate a solution. There are many steps to take from initial business idea to getting customers to buy your proposed solution, but unless you've walked in the shoes of your target customer to fully understand the problem behind your solution, you may find it difficult to get customers to initially adopt and purchase your product.
James Garvin began his education studying biotechnology. In recent years he has turned his interest in technology to helping two internet startup companies. The first business was an online personal financial network and the second was an e-marketing platform created to help entrepreneurs demo their web sites. Currently a student at University of California Davis, James is spending his summer incubating two new online businesses and writing about his entrepreneur experiences.
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