How to Evaluate Your Technology Startup Idea
The overall success of a startup highly depends on the quality of the evaluated idea. So, how to evaluate technology startup ideas efficiently in short terms? Based on our experience with startups from different countries from all over the world we defined the key steps for a tech startup idea evaluation process.
Needless to say that every startup entrepreneur wants to release a demanded product to the market and the best way to achieving this goal is to evaluate the best idea for it. As a company with more than 10 years of IT services providence we have successfully served lots of companies from all over the world. Thus we have enough expertise in IT consulting for business entrepreneurs and startups.
Becoming a unicorn is commonly the most obvious goal for most startups. Yet statistically two-thirds of technology startups fail within 1,5 years of their existence. The most common reason for failure is the low value of the product and uncompetitiveness. To put it simply, after the launch of the product or service, there is simply no need for it.
Steps to evaluating your startup idea
Quality of the evaluated technology startup idea not only affects the business side of your project but also a vector of the development process. As an experienced IT services provider, we do often help our clients with the evaluation of the idea from our side to help them to get a clear understanding of how their product or service could work and grow. Now, let’s take a look at the key steps for technology startup idea evaluation.
Step 1. Define the problem
Any business idea for a technology startup starts with a problem which can be solved by web or software solution. At this step, you should define a problem and then determine a solution for it. Moreover, you should take a look at how is this problem being solved today. If there are already some decent product or services which help customers with a defined problem, you should carefully analyze them and determine their current disadvantages. This takes you further to the next question of what features will let your specific solution standout on the market.
Step 2. Determine your targeted audience
The next step is to segment your potential customers. Before starting the development process, you must know perfectly well who the final customer of your product is. This step will help you in getting an understanding of how exactly your customers would like to use your potential product. For getting a qualified startup idea you need to carefully identify your customers with as many details as possible instead of giving just a general description.
Step 3. Analyze your competitors
As we previously mentioned, unless your idea is fully unique and there is definitely nothing similar on the market, you must analyze the advantages and disadvantages of your main competitors. Skipping this step may lead to one of the biggest problems – no need for your product.
Step 4. Describe your solution
After the market analysis, it comes to the most important building block of your technology startup idea. Based on the previously evaluated problem and analyzed competitors you need to define your personal perfect and competitive solution.
Step 5. Evaluate your unique proposition
When you finally described the solution you need to evaluate the uniqueness of it. This will let you not only understand the value that will allow you to stand out on the market but also will help your product’s developers to have a clear view of what must be delivered as a result of the web or software development process.
Step 6. Find your distribution channels
Marketing is an important part of product development as well as development. If your developed software will not be advertised properly, there is a huge risk of your startup failing. To avoid that, you need to define how your product will reach your potential customers. In other words, you need to develop a marketing strategy to assure the success of your product or service distribution. Moreover, the channels of distribution may help you to evaluate the MVP for your technology startup development.
Step 7. Plan your revenue and cost strategy
Unless you are planning to release a free open-source product, you need to carefully analyze and define how your product will be monetized and what budget will it require to be successful. An unoptimized budget is an enormous risk of startup failure, so it is a must to take out this step with as much care as possible.
Step 8. Specify your metrics
After passing all of the previous steps, you need to specify the metrics for your startup success measurement. In other words, you need to know what data to collect to analyze the general success of your web or software solution.
Evaluating your startup idea is a starting point for every technology startup as it helps to make sure that you will avoid the risk of failure. By following these steps you will be able not only to define a vector of strategy for your product or service but also a list of technical requirements that you will require to be developed by your software development team.
If you have a great startup idea – contact us and our experienced specialists will help you to evaluate the project.
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