10 Ways to Validate & Build Conviction On Your Business Idea

Ideas are a dime a dozen, and if you’re a builder at heart, you’ll naturally come up with several problems you think should be solved. Choosing the idea to work on as a startup is an art and a science, and somehow validating an idea before fully committing to it is crucial for aspiring entrepreneurs.

You’re the first investor in your startup, with your time and the risk you take. As you build conviction by validating your idea, it not only helps in understanding the viability of the idea but also prepares the groundwork for successful execution. There’s always uncertainty - that’s a feature not a bug, but there are ways to mitigate them as much as possible before jumping two feet in.

Here are ten ways to validate your idea and build conviction before making the leap.

1. Signed Paid Customer Pilot Agreement and or Design Partners

Getting a customer to sign up for a paid pilot or join a paid waitlist before you even have a product? That’s gold. It shows they really need what you’re offering and are willing to put money down for it. This kind of early support not only boosts your confidence but gives you real feedback to tweak your product. There might be a painful problem to solve, but it also helps to have early signs that someone would pay to have the problem solved.

2. High Quality Talent Joins Early

When a highly skilled and experienced person who is complementary to your skillset, gets excited about your idea and wants to join your team, you know you’re onto something. Their experience adds credibility and helps you stand out. If they’re ready to go full-time, it’s a huge vote of confidence. Tip: If you’re building a tech company, it helps to have competencies on the team that can build the initial versions of a tech product.

3. Competent Angels Want to Invest

Angel investors with domain expertise in the area you'e building, showing interest in your idea can be a signal. It means they see potential and trust you to make it happen. However, make sure their excitement turns into action. A lot of investors talk the talk but don’t walk the walk. But some do walk the talk.

4. Presence of Early Competition

Seeing other startups tackling a similar problem is a good sign. It means there’s a real need for a solution. Competition confirms market demand and gives you insights into how to refine your approach and stand out.

5. No Real Winner or Dominant Player Yet

If there’s no big player dominating the market yet, it’s a great time to dive in. This suggests the problem is still emerging, and you have the chance to be a leader. Getting in early lets you establish your brand before the market gets crowded. Sometimes, the first mover advantage can be overrated. Conversely, having a dominant player in the market might make it harder, but not impossible especially if you bring a new and hard and defensible approach.

6. Customers Already Spend a Lot Trying to Solve the Problem

If customers are already shelling out big bucks to solve the problem, you’re in luck. It means they recognize the issue and are willing to pay for a solution. Offer a better or cheaper fix, and you’re likely to win them over. Avoid having to educate users on the problem—they should already feel its pain.

7. Market Trends are Going in the Right Direction

Look at market trends. If they suggest the problem will grow, your idea may have legs. Favorable trends mean increasing demand, giving you a better chance for long-term success. Just watch out for short-lived trends to avoid building on a fad.

8. You Have a Clear and Crazy Ambition

Aim high. If your big vision feels too easy, think bigger. Sometimes, having a gut feeling about an emerging trend that others don’t see yet but you can because of deep expertise, can be a good sign. It shows you’re ahead of the curve and onto something unique.

9. Your Background Fits with the Problem You’re Solving

Make sure you have the right skills and experience for the problem you’re tackling. Investors look for founders who are a good fit. If your background aligns with what’s needed, it’s a strong validation. Get feedback from investors to see if they agree.

10. The Upside Is Huge

‍The most ambitious founders are looking for ambitious problems to solve but from an impact and/or economic perspective. When you think about your startup in its ideal state, if the impact and/or economic potential is incredibly massive, that could be a sign that it is big enough to incentivise and challenge you to stick with it for the long term.

In conclusion, these steps could help you evaluate whether or not your idea has enough legs to invest and commit to it, however – you’ll never be 100% certain. The risk at the earliest stages is a feature not a bug and in a sense cannot be completely eliminated.

At OpenseedVC, we invest up to $150k in experienced operators as they start their technology companies. Share your what you’re building with us -> bit.ly/openseedfounder

Until next time. Be the first to hear about the next post? Subscribe HERE