Google, Amazon, Apple…every epic business started with one idea. How do you know if your idea for a business or product is the next Google or if it’s predestined to be a flop?
It doesn’t come down to luck and guesswork. There’s a way to test out your idea before you invest in making it happen. We’ll take you through the basics of idea evaluation, a strategy for how to evaluate a startup idea or product idea, and ways to make each step of your idea evaluation more productive.
What Is Idea Evaluation?
In businesses of any size, idea evaluation is the process of testing a possible idea for a product or service to determine if that idea has the potential to be profitable. It’s typically the step after you brainstorm, decide on a direction for your idea, and put together the details for your concept.
Idea evaluation is a crucial step in the startup development or product development process. The goal is to make sure you don’t waste resources creating and launching a business or product that won’t bring in profits. You can also use your evaluation results to adjust your idea in a way that will make it profitable.
A Basic Idea Evaluation Process
Once you have an idea you’d like to try out, you might be wondering how to evaluate brainstorming ideas in a way that gives you accurate, usable data. Follow this multi-step idea evaluation process to get the answers you need.
1. Flesh It Out
Before you jump into evaluating your idea, you need to make sure your idea is well-thought-out and detailed. The more specific your idea is, the more details you can research and ask about in your idea evaluation, making that process more productive. Have a clear understanding of how your idea would work, what it would entail, how much you would expect it to cost, and more.
2. Research the Market Demand
Now that you have a well-planned and detailed idea, you need to assess the market for it. What is the issue you’re trying to fix or the need you’re trying to fill, and how much of a problem is it? What types of people are in a circumstance to be able to use your product or service, and how many people fall into those groups?
For example, perhaps your business idea is a concierge hairstyling service that goes to your clients’ homes. You’d want to find out how many people in your service area use a hairstylist’s services, how far they travel to their hairstylist, how many of them would prefer an in-home service, and so on. You may find some of this information through reviewing existing data online, but a survey in your service area can fill in the gaps.
3. Conduct Competitor Research
Once you’ve found out if there’s a market for your idea, you need to learn who else is competing in that market. How many competitors are offering a similar product or service? How satisfied are consumers with your competitors or how willing are they to leave a competitor for a better option? What gaps in the market are your competitors leaving unfilled? What can you do to beat your competitors?
As with market research, some of your competitor research can be found through existing industry data online. But to find out what consumers really think of your competitors and where your competitors are falling short, a consumer survey using a platform like GroupSolver may be the only way to get accurate answers.
4. Get Direct Feedback
This is the most instrumental step in evaluating your business idea: going straight to your consumers and getting their opinions. The first three steps allowed you to assess whether there was an opportunity for your idea to be part of the market, but the only way to find out if consumers are truly interested in your idea is to ask them.
The best way to do this is with an AI-driven survey. This type of survey lets you ask in-depth questions and get genuine, complete answers from your respondents instead of limiting them to multiple choice questions. For example, GroupSolver’s AI survey tool asks respondents to weigh in on other respondents’ answers and whether they agree or disagree. Behind the scenes, GroupSolver uses all this information to draw clear, practical conclusions that your business can act on.
5. Run a Financial Analysis
Finally, after you’ve assessed the market, the competition, and consumers’ feedback about your idea, you need to dig into the financials. Based on your consumer surveys, how much would customers be willing to pay for your product or service? How much money will it cost to get the idea off the ground and start making money? How much profit could your price point bring in?
That financial analysis tells you whether you can launch your business or product at a reasonable cost and when it might become profitable. Along with telling you whether your idea is financially viable, this analysis will help give you details you’ll need when you’re raising money through lending, venture capital, or other means.
Related: How to Conduct a Pricing Survey
Getting More from Your Idea Evaluation Process
Like many aspects of business, when it comes to evaluating an idea, you’ll get out of it what you put into it. Using smart strategies like the idea evaluation process above helps you give your business the highest chance for success from the start. So much hinges on your consumer feedback survey, though, so a high-quality AI survey tool is a crucial investment. Schedule a GroupSolver survey demo today to find out how this tool can make your idea evaluation more profitable.