You probably had an “aha!” moment when coming up with an idea for your marketplace — that moment where everything comes together and you can see clearly where you’re headed with your business. The next step after that is to validate your idea and find out whether it can turn into reality or not.
What is idea validation? To put it simply, it’s the process of testing and experimenting with your idea before you move on to launching and scaling. In other words, think of it like a research process that many big companies use to test their products before introducing them to the public.
Why do you need to validate your idea? Imagine creating a product that costs thousands of dollars but in the end nobody wants or needs. You need to validate your idea to make sure that it actually has potential to be successful! It will save you time and money while generating interest among potential users about your idea. When done progressively, you’ll be able to get a sense whether there will be momentum and growth.
Validation doesn’t have to be complicated and is actually pretty straightforward. However, it does require commitment and effort on your end. Here’s some things that you can do to get started:
Step #1: Identify your assumptions
This is the first step that you need to take after you’ve developed a strong idea for a marketplace. Since a marketplace needs merchants and customers to function, it’s important to make assumptions from two perspectives. Let’s come up with a scenario where you’re trying to connect fishermen with buyers through your marketplace idea. Imagine yourself being a fisherman:
The middleman will buy freshly caught fish from fishermen at a low price, and since the market is competitive, many fishermen have no choice but to accept the offer from the middleman.
Fishermen do not have any way or tools to connect with more customers besides selling in the local market.
The availability of cheap smartphones and internet data makes it easier for fishermen to connect with people online.
Now let’s create some assumptions for buyers:
Customers buy fish at a higher price from the seller/distributor.
By the time the fish reaches them, it’s much less fresh and lower in quality.
Smartphones and cheap internet data make it easier for buyers to connect with fishermen.
Assumptions help you in strengthening your marketplace solution. If you genuinely can’t come up with any assumptions, maybe it’s wise to pause at this stage and check or re-invent your marketplace idea.
Step #2: Seek advice from people
Present your idea to people and see what they think about it. Your friends and family will most likely say that your idea is amazing, but you should ask those who will be willing to pinpoint the flaws in your idea. If you can gather opinions that include challenges and solutions to solve them, you’re on target.
It’s also beneficial to attend networking events or workshops where there will be other entrepreneurs and industry experts that can help you navigate your marketplace idea. If you’re looking for more feedback, create a survey about your marketplace idea and share it to all your social media channels or email contacts. Not only will it help you in gaining feedback from others, but it will also act as a tool to generate interest and identify people’s needs.
Step #3: Create a landing page
A landing page is a web page where a visitor can arrive at and has been designed for a specific purpose. An excellent landing page will target a specific audience and have a clear call to action. Creating a landing page in validating your idea is important because they can help you to generate leads. It will also help you to collect demographic information about your prospects and measure the level of interest for your marketplace idea.
You don’t need to spend a lot of money hiring a designer to design your landing page. Simply choose a great looking template, include eye-catching visuals and engaging headlines. Create an ad campaign or social media postings. Don’t forget to analyse your results and measure your conversion rate (the percentage of users who take a desired action, for example, signing up for the newsletter on your landing page).
Step #4: Test launch
This can be the game changer as you validate your idea. Introduce your concept to the market as soon as possible and come up with a prototype. You don’t need to have a finalised product, just a functional version that people can use.
The people that signed up on your landing page are your earliest clients — they’re valuable. Present your product to your first clients and learn from them. If after conducting the test launch, you feel that there’s positive feedback and enough interest for the full version, congratulations! Your idea for a marketplace is validated.