How do you validate a new business idea?

There is only one way to validate a concept. Talk to potential users and customers (customers could be different than users). Speak to as many as you can. Ask them if they find the value proposition meaningful. But first define your value proposition well and articulate it in a nice, crisp sentence.

If the intended users like the concept, do some research to see if there are enough number of such users/buyers for you to make this venture commercially viable. (In all concepts, users need not be the ones who pay. E.g. ad supported models… but in those make sure you speak to someone from the media buying industry to assess what the revenue potential could be).

In your pitch deck do you talk about future markets that can be addressed by the product?

Yes. Your business case is based on what the potential for your concept/product/core competencies are for the future. You may have a focus on a particular segment/geography/opportunity/problem at the beginning of your journey, however, the if the possibilities of multiple revenue streams and adjacent or parallel opportunities exist, that should be included in the pitch deck.

This can be added in the slide about ‘size of the opportunity’, where you can given an overview of what possible opportunities, including new markets and new customer segments, exist for the concept you are currently proposing.

Remember, the market opportunity is different from your plan for your venture. Think of it this way… if you were working in Accenture or Mckinsey and were to present a report on the size of the opportunity to a large multi national company, what would you say? The opportunity is open to all… the MNC may have a better chance of addressing that opportunity, and your plans may be different. But the opportunity is the same, whether you address it or not.

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