How to validate business idea

Before launching new business every entrepreneur wants to be sure it takes off or at least minimise the risks. Starting with idea validation can help to figure out the business viability and make necessary adjustments to its business model (pivot), if needed.

So below I want to walk you through some practical options (mainly fitting online businesses tho)

Shaping the idea

Product formula:

audience (target market) + channels + value proposition = product

Validation requires showing an idea to potential customers (audience) using various channels and packing this product idea into a form of different offers (design various value propositions).

So a good marketing strategy will be based on following:

  1. Competitors research. Direct/indirect. How is your product different? Compile a roadmap and define what your Minimum Viable Product (MVP) would be like.
  2. Define your target audiences (duh). Note, in nutshell you need few segments to test
  3. Design a customer acquisition plan.
  4. Define you key value proposition

Try to stay lean and not overthink it – its too early for business plan as such. Couple of days should be enough. Keep it simple until next level is reached.

Validation options

Note, that options below are different in terms of how much time and budget they require but a final choice must be done based on your idea – e.g. b2b products is easier to verify via LinkedIn direct messages rather than talking to real people on the street. In a similar manner if you have an established business and some neat retargeting lists Facebook Ads and Google Display Network probably would yield a better conversion rate.


Kickstarter crowdfunding campaign is a popular way to test your idea nowadays. You will be able to validate your product and also, on top of that, collect funds for its further development and promotion in advance. However, keep in mind that crowdfunding is designed to fund primarily new or innovative offers. Thus, willing to implement any business idea already available probably won’t get you far.

I want to specifically note, that a Kickstarter campaign is a great pitch for investors, because a successful Kickstarter campaign clearly indicates that:

  1. People are willing to pay you money
  2. You and your team are able execute marketing campaign

There are tons of “how to make it on Kickstarter” guides. Here is a link to Tim Ferriss’s case study to get you started.

Offline (that’s right)

For certain services you can save a lot of time by offering whatever you have on your mind directly, to people on the streets.

Couldn’t find a link to the story but one of the food on demand startup’s founder started off by going to a supermarket nearby and approaching shoppers with questions like “if I had a services to deliver your groceries, would you pay for it?” Moreover, he made first sales straightaway (before writing a single line of code and no dime spent on ads).

Essentially, the digital world is about scaling and not the product itself.

Utilise your weak ties

First thing other guides will tell you – talk to your friends. Chances are your friends are not your target audience, but they might hook you up with right people and opportunities.

Use all your connections and social resources available to provide better leverage for your business public profile and profitable opportunities: from friends and blogger pals to platform owners or any other connections you might have. It is going to provide a significant boost at the start.

Talk to your friends, fellow aspiring entrepreneurs, talk to people and online communities. Do not hesitate to use the power of social media.

TIP: Reading “Never Eat Alone” by Keith Ferrazzi might be of great help for you. Here’s a brief review of the book.

Online communties

Social media is the cheapest and also a pretty responsive way to go (not scalable though). No initial investment needed and negative feedback is the only risk (or rather downside) you may face, but it will only indicate the weak spots to work on next time. Well, unless all the feedback is negative, because in that case you will have to completely reassess your idea. It’s a really good way to make a first step and find out if your idea is worth it.

My go to choice is Reddit, because range of subreddits (smaller forums) is endless.

Second obvious option is Facebook groups and use the power of the social network to get exposure and receive huge number of useful comments, to analyse the initial public reaction. Do they fancy having a product you plan to offer? Running a poll on Twitter can be good too, provided you have a relatively big audience to reach.

Social media run will look like this:

  1. Find the platform with your target audience. Reddit, Quora, Facebook, Twitter, Instagram or a combination of those.
  2. Showcase the concept (from idea description to sketches, etc).
  3. Receive & analyse feedback
  4. Follow up every user who liked the idea (provided you didn’t have all negative feedback).
  5. Find those who are particularly interested in your product and pitch them a sign-up/pre-order page, promising early access to your product once it launches.
  6. Conversion: you take pre-orders and watch your revenue.

Hosted forms

Who said a landing page must be your own? Google forms are free. Typeform is fancier, but requires a credit card to unleash its true potential (has a free trial tho)

GRIN tech’s favourite: landing page

Over the years at GRIN tech we also found a sweet solution for an idea validation on a tight budget: a client builds the page outline and does the copywriting. So we only work on DESIGN & MARKETING (i.e. management expenses are minimal) and provide a general consultancy on some common pitfalls.

How much does it cost to validate an idea via landing page

Kickstarter model is a cool way to validate the effectiveness of your business idea: sell first, release later. You should stay consistent and eliminate risks one by one.

The first and the largest layer of risks is demand (value proposition validation): if nobody needs your product, it’s just a waste of time and money.

In order to test the demand you are going to need a landing page and an advertising campaign.

Landing page costs

People who visit online stores only see photos, product details and reviews. They don’t know for sure, whether you actually have the product. All you need is a landing page: a few hand picked images, a detailed description and maybe a video showcase. There are several ways to do this:

  • $600-1500: use services of web agency/studio. It is overly expensive for a testing stage and if the page is not going to have any unique interactive elements, it won’t be any different from Tilda templates. By the way, at GRIN tech we recently build a side project focusing on website costs estimations across design, coding and marketing. Here is a direct link to landing page calculator.
  • $200-400: pay freelancers to modify a template from stock (like Envato Market) according to your desires, fill it up with text and some images.

It is totally acceptable if you need only a single page, but if you think of five — the price goes too high. On top of that: CMS or no CMS, you’re going to contact a contractor anytime you need to change anything — from headings to images.

  • $50: do it yourself on some website builder (GRIN tech’s favourite is Tilda). May sound complicated first, but at the end of the day it’s you who knows the product better than anyone with all its advantages and selling points. Just use a premade template and fill it up with information on your product. You don’t need any coding, or design skill to do this.

TIP: Use existing design samples to build the first version of your page. Here is a tiny post on how to use Dribbble for some shortcuts.

Technically speaking, building a landing page today is easier than ever. You just use one of many website construction services like,,

Here are some links for your inspiration:

Apart from design, there are several key things you need to know. Here’s a list of landing page essentials:

  1. Unique Selling Proposition (USP): what separates your product from others and makes it stand out.
  2. A hero shot — a photo or video showcasing a product/serviсe
  3. List of benefits of your offer: a summarized list and a detailed descriptions of each one.
  4. Benefit proof (in case you have MVP, that’s been tested by a selected audience): customer testimonials, reviews, comments, etc.
  5. Call-To-Action (CTA): “buy a demo version”, “pre-order”, “fund a project”, etc.

Customer acquisition costs

After you created a rad landing page next step is to expose it to potential customers.

I’d say $500 bucks per channel would be enough for validation test (but it heavily depends on your industry and location).

Finding and choosing an appropriate advertising platform and then launching an ad campaign by yourself is pretty hardcore. As a rule of thumb I use Google Adwords to sell products with formed demand. Reddit Ads targeted at specific communities work good for completely new ventures.

You better start with relatively small budget (keeping in mind statistical significance though) and only increase investments as you figure out unit economy and get more familiar and confident with the whole thing.

If you have no significant experience or any desire to setup an ad campaign, give the job to professionals (like a GRIN tech, duh).

Things to keep in mind

Coordinated decision-making is a major slowdown

Peter is deep into design and nitpicks on the quality and arrangement of pictures on the page. Leah is an expert at writing and she won’t release the text until she’s 100% sure that it incorporates all the principles of writing she stands for. Alex, the CEO, always worries about “what our partners are going to think about it”. As a result he changes opinions multiple times through a day and rejects one suggestion in a team after another. Partner William hesitates to provide the information on his side, thus we can’t start compiling a detailed offer on our side.

Everyone is just trying so hard and is so scared to make a mistake, to sink in estimation of people who, in reality, don’t care about them at all. That is why the work is throttling so much.

Here’s a couple of possible solutions:

  1. Do it yourself

Peter and Leah are pros when it come to shaping a text. They can build a beautiful and interesting landing page just in one week using a website building service like Tilda. I’m going to be free of it and after a week I’ll make leads flowing in like crazy, getting those first orders and all will be fine.

But I’ll lose 7 days of time. And I can have orders today, right now.

Real life example: Yandex.Direct and a subscription form on Typeform can be enough to check the idea. You won’t even need a landing page.

Peter and Leah are professionals, but I didn’t need any professionals to validate my idea. Sometimes a  moderately acceptable DIY solution is much better and much more effective than a top quality result delivered by professionals.

  1. Dial down the creativeness

“Oh, let’s shoot a video, attach it to our newsletter and upload it YouTube and, and design a cool header for our YouTube channel — it’s very important on YouTube. And think of hashtags, we must nail it right to get more traffic, and…”

There definitely is a temptation to unleash creativity to hit one more channel for idea validation. It should give you more feedback, increase your chances for blah, blah, blah…

In reality, it is nothing but chasing two rabbits at the same time:

  • Step 1: you need to make a newsletter, but you had an idea to shoot a video
  • Step 2: now you’ve delayed the newsletter to shoot the video
  • Step 3: you shot the video and it turned out to be garbage: everyone has yellow faces due to bad lighting setup, your background is of unacceptably poor quality, the video looks too shaky, because you were shooting hand-held. It needs to be reworked. Everything. But — oops! — it’s late at night already, so let’s leave it for tomorrow.
  • Step 4: the next day you and your team all try to figure out video production. Progress: 0%.
  • Step 5: it’s three days later, everyone is freaking out and a decision is finally made to release the newsletter without a video. You now have 36 to 72 hours of wasted time in total, no video and still no results.

One of the reasons such things happen is that shooting videos, playing with colors in Photoshop, searching for that perfect gif-animation and many other thing is fun!

On the other hand, validating a hypothesis, which is likely to fail with a 99% probability is not fun. Making something quickly is a qualitative indicator: there was nothing and now there is something, it exists. Making something “cool” is a quantitative indicator.

Conclusion: before making something “cool” — just make it.

A warning on metrics

If you end up doing it all by yourself it is inevitable that you’re going to have to deal with metrics — track them and analyse. It is very important that you pay attention to metrics that really matter. If you have a preorder available (regardless of whether you have MVP or not), your focus is conversions (number of pre-orders) and Cost Per Click (if you actively engaged in paid ad campaigns). And don’t be fooled by big traffic numbers. David Zheng of has a good explanation on why traffic doesn’t equal conversions.

If your landing page is purely a concept showcase, you need to track the public response to your idea. It will mostly revolve around social media and online publications: retweets, mentions, hashtags, etc. It’s quite tricky since you may have a lot of mentions on the net, tons of articles dedicated to your concept, but they all can turn out to be negative reviews. So, regardless of what you do, if you have no response or bad response, you should wrap it up. It’s time to reassess your idea.

Pitfalls of A\B testing & empirical research

be sure to understand pitfalls of early A/B testing and my personal favourite –  visitor recording and session replay options (it is awesome way to develop hypothesis to test via empirical research)

To sum it up on idea validation

To understand what type of businesses can benefit from landing pages you need to understand the difference between the business and the idea. If you want to start a PR agency a landing page won’t help you — there’s no disruptive idea in this. But if you want to test a new product line for your existing business or launch something completely new, a landing page can help you understand the initial reaction of an audience to it.

Crowdfunding revolution in the game development industry is probably the best example. Independent small development teams are able to start crowdfunding campaign, put out their concept online on a simple landing page, promote it and test the initial reaction to the concept, while collecting funds to do get the job done. And some relatively big companies like Obsidian Entertainment, previously heavily dependant on publishers, managed to attract record breaking funds to pursue their line in the business and prove that their products are profitable and have a demand on the market, regardless of what major publishers think.

However, it is worth noting once again that a scale of your company doesn’t really matter. What matters most is a clear vision of your product and structure work. The only difference between small businesses and huge companies here would be the fact that the latter are likely to have no real reason to worry about the budget.

Whether you are a serial entrepreneur or just about to quite a full-time job idea validation stage matters the same.

Don’t hesitate to get in touch if you need help with any part of it.

Stay tuned

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