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ITERAQ

01 · Validate your business idea · ITERAQ

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01 · Validate your business idea

Decide on a customer group, a measurable problem, and a low-cost first trial.

A good idea becomes a business opportunity not because it excites the owner, but because it can solve an important problem for a specific person. “We help everyone” is too broad for the first sale. Write down who does what work, how often, and for what budget. Also consider the solution the customer is currently using as a competitor: Excel, own effort, an employee, or doing nothing.

In the first stage, the aim is not to capture one percent of the large market. It is to investigate the existence of a paid need in the small group you can reach. Likes and positive answers in surveys are not considered proof of payment. The time spent on testing, the cost of the current solution, the request for an appointment or a paid pilot with clear terms are stronger signals.

Keep a record of assumptions. For every claim, note the evidence, date and what you will do if it proves wrong. Changing your idea after research is not failure: it means learning before committing to a large expense.

Practical steps

  • Make a sentence: "[Customer] is experiencing [problem] in [situation], using [alternative] today."
  • Talk to five suitable people. Ask them about their last concrete event, not what they will do in the future.
  • Design a small solution that you can deliver by hand in a week. Write clearly the delivery scope and fee.
  • Determine the trial budget, end date, and attendance criteria in advance. If you receive payment in advance, keep the delivery and return terms clear.

Design a small experiment to test the claim

Separate the customer interview from the sales presentation. First understand the most recent problem, its outcome and the current solution. Ask “What did you do the last time this happened, and how much time did you spend?” instead of “Would you buy this?”. Record whether each answer is an observation or an interpretation. Obtain permission for the interview and do not collect unnecessary personal information.

The experiment should test only one main uncertainty. Developing an application when demand is uncertain means predicting both the product and the customer at the same time. First, establish a narrow service that can be delivered manually: one customer type, one problem, one delivery. Writing the outcome measure before the experiment prevents you from interpreting a poor result as a success later.

One pilot's measure of success is not the rule for the entire industry. The following thresholds were chosen for learning purposes. Two paid trials are not evidence of a large market; It is an initial sign that can be repeated in a second group. Collection, delivery cost and the customer's reason for continuing should be examined together.

assumption experiment Preselected decision criteria
Appointment loss is a major problem Past incident interviews with 10 businesses At least 4 concrete events
There is budget for small solution 5 pilot proposals with written scope At least 2 paid pilots
Service is sustainable One week of manual service delivery Less than 3 hours of work per client

Try it yourself

6 problems were explained in 10 meetings. Two of five offers were accepted for £90. The two pilots took a total of 8 hours; direct expense £40. What is the economic outcome of the pilot if you spend £20 per hour on your own labour?

Step by step solution

Income 2 × £90 = £180. £140 remains after direct expenses. Since the cost of your own labour is 8 × £20 = £160, the pilot has a deficit of £20. Willingness to pay has been seen; but the delivery model is not yet sustainable with this assumption. The next experiment should test price or delivery time. Increasing the number of interviews alone will not solve this gap.

The work you will complete

One-page experiment record: customer group, assumption, quote, budget, end date, actual result, and go/change/stop decision.

Second example: fictional scenario

Example: Appointment reminder service for small repair businesses. Three out of five interviews describe missed appointments in the last month. Two businesses agree to a one-week trial; Only one wants to continue as a paying customer. This result does not mean "there is definitely a market". First, examine why the payer is different; There is not yet enough evidence to advertise throughout the city.

Your worksheet

  • Customer group / meeting date / last problem
  • Current solution / monthly cost / decision maker
  • Pilot coverage / price / duration / stop on failure criteria

Check your work

  • Are the intention to pay and the actual payment separate?
  • Have you written down the cost of your own working time?
  • Is it clear at what outcome you will stop the experiment?

Common mistakes

  • Considering the kindness of friends as a customer request.
  • Spending heavily on logo, office and stock without verifying demand.
  • Leaving it unclear what will be delivered before receiving payment.

Decision question

Can a stranger understand the benefit you offer in one sentence? Would a second customer pay for the same reason?

Further reading

SBA · Business planning and market research

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