This is the second article from the series of articles about Shopify Compass, about the new merchant educational platform. Previous one was connected to the product ideas, niches, trends. With the help of this one we will filter our ideas with business validation procedures.
It is important to start with something, but you should to be focused as well. That’s why we need to have an MVP, a minimum viable product. It will allow you to spend less money and time, to test your idea, rather than performing a full product launch.
Let’s start with a point that you should have a deadline for your MVP. Remember that your MVC should not be ideal, it can be raw. It is ok.
But MVP should be based on the analysis data not to waste time chasing indistinct requirements.
Evaluating your business idea
First step on the way to MVC is to check viability of your ideas. It is better to spend a week on research, than to spend money on idea, not knowing that it was a failure just from the start.
Measure market demand of your product
On this stage it is important to check market and your product fitment. Are there any potential buyers? What is the average delivery time on the market? What is the average price?
Measure competition in your niche
You should create a document, and fill it with the list of competitors who you should know by now. Simply google them.
By the way, don’t be afraid of competitors.
If there is a competition, than this market is making money.
Validate your product according to the market
Answer a simple question “Is there any real demand of your product or service in the market?”.
- Only real sales within your market can be a valid metric.
- It should be a real market demand, not a few people who can be interested in your product.
- Competition is good, absence of competition can be a marker of a potentially bad case.
“One of the ways to proof your niche is to start a crowdfunding campaign”, suggests Simi Kular from https://www.jaswantskitchen.com/. By this action you can check if there is any audience under your idea or not. To my mind it’s more connected to self-made products, than other product models. If it fits your case, then go to https://www.indiegogo.com/ and https://www.kickstarter.com/ to create crowdfunding campaign.
Proper competitive analysis
You should have a document for that.
Take 7-10 competitors you should have by now. They should be from your niche, and they should have high sales, demand as well as popularity.
Rank them by the options:
- Price range
- Product/services offerings
- Social media engagement
- Content strategy they use
Distinguish 3 your primary competitors.
Pass all of them trough services:
- Facebook Audience Insights: https://www.facebook.com/ads/audience-insights
- Similarweb: https://www.similarweb.com/
- Buzzsumo: https://buzzsumo.com/
Form a table with data that you collected. Here you can find a template from Shopify that you can use.
Compare them to your own data.
By the end you should have an answer to the question “Is my business idea viable?”.