{"id":296,"date":"2018-06-18T19:01:22","date_gmt":"2018-06-18T19:01:22","guid":{"rendered":"https:\/\/logotypemaker.com\/blog\/?p=296"},"modified":"2018-06-28T14:51:46","modified_gmt":"2018-06-28T14:51:46","slug":"hit-or-miss-5-ways-to-evaluate-your-startup-idea","status":"publish","type":"post","link":"https:\/\/logotypemaker.com\/blog\/hit-or-miss-5-ways-to-evaluate-your-startup-idea\/","title":{"rendered":"Hit or Miss? 5 ways to evaluate your startup idea"},"content":{"rendered":"

If you\u2019re reading this, then chances are one day you woke up with an idea that seems like your golden ticket, like a million dollar check, or to be precise like an opportunity to make a ridiculous amount of money. If that’s the case, well\u2026 congratulations! You\u2019ve made the most important step for every entrepreneur! <\/span><\/p>\n

But before you start playing an all-or-nothing game, before you quit your 9 to 5 job, before you spend all the money from your savings account on building a prototype of whatever you\u2019re planning to sell, take a few minutes to read this short post. LogotypeMaker has gathered 5 most efficient ways to evaluate a startup idea. Try all of them and make sure your idea is really worth your time and effort.\u00a0\u00a0<\/span><\/p>\n

If it\u2019s simple, then it\u2019s good<\/b><\/p>\n

The first and probably the most important test is the \u201csimplicity check\u201d. No doubt you understand all the twists and turns of your concept but will it be clear enough for the investors and the potential customers? <\/span><\/p>\n

They say, if you can\u2019t fit your idea into 10 words, it\u2019s not good enough. Well, 10 words may be an exaggeration but 20-25 words will be exactly enough. Can you explain your idea to a total stranger using just 25 words? Did (s)he get it? Was your explanation clear enough? \u00a0<\/span><\/p>\n

Try and explain your plan to a child. If a child has no problem understanding it then you\u2019ve completed the \u201csimplicity check\u201d successfully. But if people react to your explanations like <\/span><\/p>\n

 <\/p>\n

\"\"<\/p>\n

\u2026.then you either need to work on your concept a bit more or switch to another idea. \u00a0<\/span><\/p>\n

Some may think: \u201cWhat\u2019s the point in all those explanation limits? Who cares if I describe my concept in 50 words, not 25? I\u2019m fine as long as people understand me\u201d. Unfortunately, that\u2019s not how business works. You\u2019ll need to meet numerous investors, you\u2019ll need to convince the customers they need to buy your product or service. No one has time to listen to your lengthy commentaries. You have one minute, one shot to get all of them interested. Keep it short and clean. \u00a0<\/span><\/p>\n

Be a problem solver<\/b><\/p>\n

So, you\u2019ve survived the first challenge. You\u2019ve already made sure your idea is simple and clear enough. That\u2019s great! But do you know what customer\u2019s problem your business is going to solve? <\/span><\/p>\n

The best (and the most profitable) business ideas work out because they make people\u2019s life easier, they solve a problem. So asking for the audience\u2019s opinion seems like the right thing. But the trick is the customers usually have zillions of voiceless wishes and cries for help they\u2019re unable to express. <\/span><\/p>\n

\"\"<\/p>\n

As an entrepreneur, you have to \u201chit all the right spots\u201d fulfilling the audiences wishes and unobvious needs. Do you already know what kind of problem your idea will solve? Make sure you have an answer as all of the investors you\u2019ll about to meet will ask you about it. <\/span><\/p>\n

If your future startup doesn\u2019t have any problem-solving background, keep brainstorming as this particular idea won\u2019t bring you money. \u00a0<\/span><\/p>\n

Make it fit your personality<\/b><\/p>\n

We bet you can recall a dozen inspirational quotes a la \u201c<\/span>Do what you love, and you\u2019ll never work another day in your life<\/span><\/i>\u201d. For the most part, those sentiments have nothing to do with real life. But when it comes to the business idea that may become a lifetime career or at least a long-term commitment, it\u2019s vital to make it fit your personality! <\/span><\/p>\n

Are you proficient (or at least have minimum experience) in the business area you\u2019re planning to launch a startup? Do you have the contacts needed to build an experienced team? Can you learn and master the skills needed? \u00a0If the answer is negative, the idea is not that promising as it seems and you\u2019ll have hard times putting it into practice. <\/span><\/p>\n

Before proceeding to the next step imagine your startup is successfully launched. Write down all the tasks you\u2019ll be responsible for. Are you comfortable with all of them? Are you ok with the new working pattern? Does your new role require a lot of communication? Will you be able to manage it? <\/span><\/p>\n

\"\"<\/p>\n

Answer honestly. Continue pursuing the idea only if it doesn\u2019t force you changing who you are. Even the most commercially successful idea doesn\u2019t cost your mental health. \u00a0\u00a0<\/span><\/p>\n

Think of the revenues<\/b><\/p>\n

This method is probably the most important and the most complicated. If you\u2019re a virgin entrepreneur with no business skills whatsoever you may need some time to get through it. But it\u2019s all worth it, we promise! \u00a0<\/span><\/p>\n

You need to come up with a revenue model to evaluate a startup idea. In the simplest terms, you need to understand how your potential business will earn you money.<\/span><\/p>\n

\"\"<\/p>\n

Will you sell some kind of product using the markup revenue model, grow the profits using the paid subscription or maybe launch a freemium service? Give it a good deal of thought. Any tiny little detail may crash your future success. <\/span><\/p>\n

Don\u2019t forget about such aspects that may affect your business plan like returns, seasonality, equipment leasing etc. How quick will the investment return? Does the income amount still look alluring after all the expenditures and taxes? \u00a0<\/span><\/p>\n

Spend some time and create a realistic business plan. Ask for professional help if you need it. A strong revenue model is a must. If you can\u2019t create one, the idea will never pay off. <\/span><\/p>\n

Ask for a feedback<\/b><\/p>\n

If you\u2019ve tried all of the four methods listed above and your idea still remains pretty attractive, you have one last thing to do \u2014 test the possible market response. Basically, that\u2019s how you\u2019ll understand if the customers want what you\u2019re selling. <\/span><\/p>\n

Of course, you may interview friends and colleagues of yours (and that\u2019s a great idea) but such an approach won\u2019t be able to replace a real customer\u2019s feedback. <\/span><\/p>\n

There are several ways to get an accurate market response. First of all, you may <\/span>create a landing page<\/span><\/a> with a clear call to action. If you plan to create some kind of software, it might be a good idea to build a prototype and give the target audience an opportunity to interact with it. Don\u2019t hesitate to use the popular crowdfunding platforms like Kickstarter or GoFundMe. That\u2019s the perfect way to find out whether your sales pitch is convincing and interesting enough.<\/span><\/p>\n

\"\"<\/p>\n

If people will interact with the landing page or a prototype you\u2019ve created, if they will donate to make your project happen, that means your idea is brilliant and is definitely worth trying. Don\u2019t blow such a chance away! <\/span><\/p>\n

One last important note!<\/i><\/b><\/p>\n

Every idea you come up with will eventually grow on you. The more time you spend working out the kinks the more biased you become. So don\u2019t be afraid to ask for a third-party opinion. It can be anyone whose opinion is important for you or (if you\u2019re not scared of the harsh reactions) even a poll created online. <\/span><\/p>\n

If the first business concept you\u2019ve created didn\u2019t really work out, keep your head up! Use the experience you\u2019ve gained to take another shot! Sooner or later you\u2019ll get there! And that\u2019s for sure!<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

If you\u2019re reading this, then chances are one day you woke up with an idea that seems like your golden ticket, like a million dollar check, or to be precise like an opportunity to make a ridiculous amount of money. If that’s the case, well\u2026 congratulations! You\u2019ve made the most important step for every entrepreneur! […]<\/p>\n","protected":false},"author":1,"featured_media":334,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/logotypemaker.com\/blog\/wp-json\/wp\/v2\/posts\/296"}],"collection":[{"href":"https:\/\/logotypemaker.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/logotypemaker.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/logotypemaker.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/logotypemaker.com\/blog\/wp-json\/wp\/v2\/comments?post=296"}],"version-history":[{"count":11,"href":"https:\/\/logotypemaker.com\/blog\/wp-json\/wp\/v2\/posts\/296\/revisions"}],"predecessor-version":[{"id":361,"href":"https:\/\/logotypemaker.com\/blog\/wp-json\/wp\/v2\/posts\/296\/revisions\/361"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/logotypemaker.com\/blog\/wp-json\/wp\/v2\/media\/334"}],"wp:attachment":[{"href":"https:\/\/logotypemaker.com\/blog\/wp-json\/wp\/v2\/media?parent=296"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/logotypemaker.com\/blog\/wp-json\/wp\/v2\/categories?post=296"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/logotypemaker.com\/blog\/wp-json\/wp\/v2\/tags?post=296"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}