How to Validate Your Startup Idea: Practical Steps for Early-Stage Entrepreneurs
✍️ Opinions
This article has been contributed by Aneesh Khanna, Early-Stage Entrepreneurship Consultant & Coach.
- In 2010 – It was DIFFICULT to STARTUP
- In 2024 – It is DIFFICULT to ‘NOT STARTUP’
This makes it even more important to be able to ‘Validate your Idea’ before you kickstart your journey. Idea Validation is both an INTERNAL and EXTERNAL journey.
I have an 8-step framework which I use for ‘Idea Validation’ with aspiring Entrepreneurs, but let’s take an example and make this learning more fun. Recently, I conducted a bootcamp on Entrepreneurship for children in their 10 th Grade at a Business School in Bandra Kurla Complex. At the end of the very enjoyable session, a 15-year-old, gentle, bespectacled girl came up to me with her IDEA. She said softly but very clearly “Sir, My father is a football coach, and I want to do something in the area of football coaching for girls. But I want this to make money and for it to be a career”. Unfortunately, the kids were ushered to the bus and our conversation was cut short. I have often thought of her and her IDEA over the last couple of weeks. So, I thought let’s use this opportunity and think about the 8 Step process for ‘Football Coaching for Girls’ as an Idea to Validate.
The Problem
Are you a Painkiller?
TAM
Competition Analysis
Clarity on the Solution
Product Channel Fit
Unit Economics
Frugal Bootstrapping
The Problem
This is a critical step, since we can get lost into the solution. Take a step back and articulate the problem in one sentence. So, for our idea, let me define the problem statement, “Increasingly children are getting addicted to devices and have lost the ability to engage in outdoor sports, which are critical for child development, confidence building, team work and physical health. Coaching, training and play facilities are skewed towards coaching more boys than girls, particularly for physical sports like football, cricket, athletics, hockey etc”.
Are you a Painkiller?
Speak to at least 25-30 people who have this specific pain on account of this problem. You want to be a Painkiller and not a Vitamin C tablet. 15-year-olds are very smart, they can create a simple questionnaire in Microsoft word and get 30 copies printed.
They can go along with their parents to the mall, the beach, a playground, or a walking stretch, where there are parents in the age range of 32-50 years and request them to fill this questionnaire. A google form also works ��. Some question examples:
- For how many hours in a week, do your children play in the outdoors?
- Do you believe that the lack of outdoor activity hampers their overall growth?
- Would you encourage your girl child to spend time out of her other activities, specifically for sports coaching?
- How much would you be willing to pay for 1 hour of football coaching time?
TAM
The Total Addressable Market - How big is the market. How to calculate the TAM? So there are 2 ways to calculate the TAM or the overall size of the market:
- Top Down Approach – We start with some available secondary data on the Industry and then filter it down to arrive at the appropriate market size.
- Bottom up Approach – Number of potential girls who are in the age group of 6-20 years multiplied with the price of the coaching for a year. Sometimes, even if the TAM is small, don’t worry about it, build such a wonderful Coaching experience (online and offline), that it creates tremendous ‘Customer Love’. This Customer Love will replicate over time and increase the TAM. Tomorrow we could look at hockey, cricket, track and field. Move out of just pre-teens and teens and look at early office goers in 21-28 years age bracket, who have no time to play at all.
Competition Analysis
A 2X2 competition matrix is a reflection of the Industry, in which you want to build your Idea. It literally shows you the white spaces where no brand is present. The choice of the x and y axis variables are very critical, because they showcase the different types of companies in the industry. For the sake of our Idea, I chose the x axis to understand if the coaching is focussed on girls or Unisex(polite way of saying more boys). On the y axis I chose Apps/Academies Versus stand along coaches who list themselves on Just Dial.
Clarity on the Solution
Focus on only those features that solve a problem. Great products are built after many layers of iterations, based on customer feedback. Think about, if you should focus on individual coaching? Is this going to be a more Summer focussed or weekend activity? How to combine offline coaching, with online or community experience? Can we think of existing models like ‘Sisters in Sweat’ and learn from them.
Can we screen the English Premier League for our users?
Product Channel Fit
Is as important as Product Market Fit.
- B2B – Should we look at tying up with schools which have a playground and allocate a full-time football coach.
- D2C – Build beautiful content on Instagram & facebook and create a frictionless landing page, to get people to sign up for existing groups, which meet on weekends
Parnas Ghosh
Unit Economics
In the day and age that we are today, understanding your Unit Economics and Unit Level profitability is paramount.
- Price – What will be the willingness to pay for 3 hours of coaching a week? For the summer program? For women in 21-28 years? Look at your questionnaire for some answers. Also look at the existing pricing as an indication
- Fixed Costs – Looks like the cost of the Coach is going to be a larger cost centre. How can there be a continuous availability of this talent
- Variable Costs – Cost of football gear
Frugal Bootstrapping
There is a lot of merit hustling in the early days of bootstrapping.
- Grants – If you are a young woman entrepreneur, there are grants available to help you get off the ground. Look up the state chapters under Startup India portal, E.g Women Entrepreneur focussed incubator WISE by SNDT Women’s University.
- Customer Money – Start small, chase small wins, get one school to back you up, get some customer money, show some Product Market Fit, and then you can get external money to scale your business.
When you go through these steps, you will find answers, which in turn will create an internal and external Idea Validation.
Michelle D’souza
