A startup begins with an idea for a product or service but this is really only the first step when you're getting started. While you may think your idea is revolutionary, will others? If you want to make a business out of it, you need to make sure there is a market for your product or service. Put another way, will people buy your idea and if so will they buy it instead of other similar ideas?
Before you invest too much time and money in your idea, you'll want to research the market to ensure there is a need for your idea and that you can make money off of it. You will also want to evaluate the competition so you know that you can differentiate your product or service from them.
While some dismiss market research because people don't always know what they want, it's important to talk to some prospective customers to get their insights into what they need to make their life or jobs easier or more efficient. Even if you don't size the market (although you will need to do this if you want to raise outside money) or test the concept with focus groups, these discussions will provide valuable insights that give you a better understanding of your audience which is absolutely critical.
They may not understand your idea in its early stages but listening to your customers-to-be could give you additional thoughts for improvements or refinements that could make the difference between success and failure. Instead of presenting your concept and getting input, have a coversation to see how your prospects solve that problem today.
It's rare that your concept won't have indirect competitors even if you don't see any direct ones at this early stage. If there really is no competition, then it could very well mean you have no market too. That's why these discussions and informal research are absolutely critical. You want to make sure there is a market before you invest substantial amounts of time and money.
But don't take this competitive research too far as you need to forge your own path and make your product or service significantly different that their product. If you follow the competition then you will surely fail. Very few people are going to switch to your solution if you are only 2x better. In many cases, they may not even switch if you're 10x better.
Once you take this valuable input from prospective customers into account and define a product or service that has a clear market and is more compelling than the competition, then you'll need to make sure the messages that you deliver communicate not only the value but how you are different.
We'll talk a lot more about messaging in this startup stage (you can read some previous posts on this topic) but the next post in this series will be some thoughts on selecting a name so stay tuned. In the meantime, if you there are any problems or issues you face getting started, leave them in the comments and I'll try to address them.