How to validate your business idea in 4 steps

If you've got an idea for a business, it's essential to ensure that there's a market for what you're selling before you invest too much time or money into it.

After all, no matter how great your product or service is, if there's no one out there who wants or needs it, your business will ultimately fail.

While the process of validating an idea can seem daunting, it doesn't have to be.

In this article, we'll show you how to validate your business idea in four simple steps to be sure you're on the right track. We'll also explore various tools you can use to help you gather the data you need to make an informed decision, as well as the factors you need to consider when evaluating your idea.

Let's get right into it.

How to validate your business idea

Now that you know what validation is and why it’s important, let’s look at how you can validate your business idea.

Step 1: Define your goal

The first step in validation is to define your goal. What are you trying to achieve? Are you trying to validate the need for your product or service? Are you trying to validate your business model? Are you trying to validate your marketing strategy?

Defining your goal will help you determine which experiments you need to run and what type of data you need to collect.

At every step of your validation, you'll also be able to compare your results against your goal to see if you're on track.

Step 2: Develop a hypothesis

The next step is to develop a hypothesis. A hypothesis is an educated guess about how things work. In the context of validation, your hypothesis is your guess about what will happen when you run your experiment.

Once you have a hypothesis, you can start developing your experiment.

Creating hypotheses can be done in various ways. But at its core, a reasonable hypothesis should be:

  • Testable: You should be able to design an experiment that will allow you to test your hypothesis.
  • Specific: Your hypothesis should be specific enough that you can measure whether or not it’s true.
  • Measurable: You should be able to collect data that will help you determine whether or not your hypothesis is true.
  • Time-bound: Your experiment should have a start and end date to know if your hypothesis is valid within a specific timeframe.

Step 3: Experiment and revise

The next step is to experiment and revise. This is where you put your hypotheses to the test. You’ll need to design an experiment and collect data to do this.

Sometimes, you might have to revise your hypothesis based on the results of your experiment. That’s why it’s important to have a flexible mindset when conducting experiments. The goal is to learn, not to be right.

Step 4: Validate and develop

The final step is to validate and develop. This is where you take what you’ve learned from your experiments and use it to build your business idea further.

This might involve changing your product or service, adjusting your business model, or revising your marketing strategy. Whatever it is, the goal is to use validation to make your business better.

What is idea validation?

The goal of validation is to reduce the risk of building something no one wants. Validating your business idea means you can avoid the costly mistake of making something people don’t want or need.


In addition, validation can help you do the following.

Save time

One of the most time-intensive things you can do is build a product or service, only to find out later that no one wants it. Idea validation can help you avoid this scenario.

Focus on the right things

When starting a business, a million things need to get done. It’s essential to focus on the tasks that will have the most significant impact. Idea validation can help you identify which activities are worth your time and which ones aren’t.

Reduce stress

Starting a business is stressful enough without worrying about whether or not people want what you’re building. Idea validation can give you peace of mind knowing that you’re on the right track.

Build confidence

One of the hardest things about starting a business is having the confidence to move forward. Idea validation can help you build that confidence by providing feedback from potential customers.

Raise money

If you’re planning on raising money from investors, they’ll want to see that you’ve validated your idea. Falling in love with your own idea is one of the deadly fundraising sins you can make when launching a startup, and if you are raising money from other people, you'll want to be able to show that your idea has been validated by someone other than yourself.

Tools for idea collection and validation

When it comes to data collection and validation, the good news is that there are several different tools and techniques you can use to validate your business idea. Here are a few of the most popular ones.

Google Trends

The first tool we'll discuss is Google Trends. Google Trends is a tool that allows you to see how popular a specific keyword or topic is. You can use it to see if there's demand for what you're offering.

Go to the website and enter a keyword or topic to use Google Trends. Google will then show you how popular that keyword or topic is over time.

You can also use Google Trends to compare multiple keywords or topics. This can be helpful if you're trying to decide between two different business ideas. The more specific you can be with your keywords, the better.

A company that provides a 24/7 answering service through its live agents can validate its business model by seeing what trends small businesses are looking into to see if they would be interested in using such a service. The trends might revolve around their current call answering solution, what they like and don't like about it, and how much they would be willing to pay for a live answering service.

Based on these findings, the company could then iterate on its original idea and pricing model and offer a solution that is tailored to the needs of its target market.

Online quizzes

Another tool you can use for validation is online quizzes. Online quizzes are a great way to engage potential customers and get them talking about your product or service.

Plus, they can be a lot of fun.

There are a couple of different ways to use online quizzes for validation. First, you can use them to gauge interest in your product or service. Second, you can use them to get feedback about what people want.

You can then use the quiz results to make decisions about your business.

One example in the healthcare industry could be that of a company that provides hearing aids solutions in Canada. In this case, the company could validate its idea by conducting a quiz targeting people with hearing loss in their country.

The quiz could ask questions about their current experience regarding hearing aids, what they think about the current solutions in the market, and what kind of features they would like to see in a new hearing aid.

Based on the results of the quiz, the company could then validate its business idea and proceed with developing a new solution.

Google Keyword Planner

Another tool you can use is the Google Keyword Planner. The Google Keyword Planner is a tool that allows you to research keywords for your website or blog.

You can use it to see how many people search for a particular keyword. This information can be helpful in a couple of different ways.

First, it can help you gauge interest in your product or service. If people are searching for what you're offering, that's a good sign. Second, it can help you develop ideas for marketing your business.

Seeing what results come up can give you an idea of how people search for your product. It can also give you ideas for how to market your business.

Use Amazon product research and reviews

One way to validate your business idea is to use Amazon product research and reviews. Amazon is a great place to research products because it has a lot of data on what people are searching for and buying.

To do this, go to Amazon and search for products similar to what you're selling. Looking at the products, descriptions, and images can give you an idea of what people are looking for.

Additionally, reading the reviews can give you insights into what people like and don't like about specific products. Reviews can also help you identify people's pain points with the current market.

This information can be helpful in a couple of different ways; first, it can help you refine your product. If you see that people are unhappy with a particular aspect of a product, you can try to address that in your product. Second, it can help you come up with new marketing ideas.

An example in the fitness industry could be a company that is looking to create a new program to help people get in shape. Say this program is an at-home workout program that requires no equipment while also being very affordable for the customer. They could really go through what customers buying similar programs on Amazon are saying, what they like about them and what their main frustrations are.

This could help them create a solution that includes how to stay motivated, healthy recipes that could easily be prepared, and much more. By doing Amazon product research and reviewing the reviews of customers in the industry, companies can create a product that really addresses the missing elements.

Focus groups

Another way to validate your business idea is to run formal focus groups. Focus groups are small groups of people who are brought together to discuss a particular topic.


To do this, find a group of people who would be interested in your product or service and ask them questions about it. This can give you valuable insights into what people think about your product or service.

Create a landing page

A landing page is a website designed to get people to take a specific action. For example, if you're selling a product, you might want people to buy it from your website. Or, if you're offering a service, you might want people to sign up for it.

Creating a landing page is a great way to validate your business idea because it lets you see how many people are interested in what you're offering. Additionally, it can help you with lead generation ideas for your business.

In the case of a company that offers dressers for the bedroom, they could validate their idea by creating a specific landing page for each style of dresser they offer and tailor their marketing message to the target buyer. They could then use analytics tools to see how many people are visiting each landing page and whether or not they are submitting their contact information or taking any other desired actions.

Run a small ad campaign

Running a small ad campaign is another excellent way to validate your business idea. You can test how well your product or service resonates with potential customers with an ad campaign.

Simply create a few ads and run them on platforms like Google Ads or Facebook Ads. Then, track how many people click on your ad and take the desired action. This will give you an idea of whether or not people are interested in what you're selling.

Facebook Ads Library is a valuable tool that allows anyone to view and analyze active and inactive ads that have been run by a Facebook Page or an advertiser on the platform. Facebook Ads Library is an online database that provides transparency into the advertising practices of Facebook Pages and advertisers on the platform. It allows users to view active and inactive ads, including the ad's content, the dates it was active, the target audience, and the amount spent on the ad.

A/B testing

A/B testing is a method of experimentation that compares two versions of something to see which one performs better. For example, if you're selling a product, you might create two different ads and then see which one gets more people to click on it.

Just like you can perform A/B testing on cold emails to see which subject lines get more people to open your email, you can use it to test different aspects of your business idea, allowing you to incrementally adjust parts of such an idea.

Questions to ask that contribute to validation

Here are some questions to consider that will help you validate your business idea:

  1. Does my product or service solve a problem?
  2. Is there a demand for my product or service?
  3. Do I have a competitive advantage?
  4. Can I reach my target market?
  5. Is my pricing strategy feasible?
  6. Do I have the resources to execute my business plan?
  7. What are the risks and potential challenges of my business idea?
  8. What are the chances of success? (realistically)

By answering these questions, you'll get a better sense of whether or not your business idea is worth pursuing. Additionally, it can help you identify any potential problems with your business idea to address them before moving forward.

The bottom line: should you move forward?

Validating your business idea is an essential step in starting a business. By validating your idea, you can ensure a market for what you're selling and that you have a competitive advantage in the journey you’re about to embark on. Additionally, validation can help you identify any potential problems with your business idea and allow you to address them before moving forward.

There are several ways to validate your business idea, including conducting market research, running focus groups, creating a landing page, and running ads.

Ultimately, the best way to validate your business idea is to test it out with potential customers. This will give you the most accurate insights into whether or not people are interested in what you're selling.

About the author: Hanson Cheng is the founder of Freedom to Ascend. He empowers online entrepreneurs and business owners to 10x their business and become financially independent. You can connect with him here.

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