How to identify if your business idea is worth it (with the latest tools)

Guest Author: Danish Ahmed, co-founder of startuptools.ai

So, you’ve got a business idea but are unsure how to determine whether it is worth pursuing. Or maybe you’ve already been through the mill and spent a year building a product no one wanted. For either of these scenarios, you are not alone. 

The issue is many startup leaders don’t find the right problem to solve; they fall in love with one idea and try to force fit, ignoring any feedback they receive. That’s why, currently 9 out of 10 startups fail. 

As a seasoned entrepreneur and Product Management professional leading product development in AdTech, I have learned the value of finding that problem-solution fit first. But I also realized there needs to be more user-friendly business planning tools to give founders a helping hand. 

Startup leaders often leverage innovative tools like LivePlan and Biz Plan to get the answers to ‘What MVP will work?’ or ’Does this solution address the issue I aimed to resolve?’ These are excellent tools for entrepreneurs to put business ideas into pre-made structured frameworks, helping them figure out their target audience, customer demands, and industry landscape.

However, on occasion, filling out these templates with built-out ideas can be overwhelming. Here are four more tips to help verify if you have a viable business idea. 

1. Explore ChatGPT Prompts 

With all the current rage, ChatGPT is the first obvious tool to use — and I have witnessed the true magic of AI when harnessed to empower entrepreneurs. ChatGPT can quickly help deliver your validation plan, using prompts to determine market-solution, customer, and product-founder fit. 

For example, let’s take this first pain point: Entrepreneurs often miss out on defining their unique advantage when starting a business. The ‘why me?’ part. That’s why taking a moment to analyze your education, experience, background, and network through ChatGPT is worthwhile: Do you have access to a specific customer set or expertise in a niche area? 

For example, suppose you want to launch a new healthy snack brand and start this food company in the US. You realize you have a close friend who owns America’s top food distribution company and could have distribution lined up.

To more thoroughly explain your unique advantage, though, you can simply ask ChatGPT the obvious: “I’m thinking of starting a business that [does XYZ], and I want to understand my unique strengths in making it a success. I have experience in [XX] and access to people who [XX]. I want you to ask me questions to help me think through what unique advantages or risk I may have.”

Don’t be surprised to see a reasonably adequate action plan listing what skills you can maximize and other activities you need to complete to get your business off the ground. 

Next up, it is worth asking ChatGPT who the ideal customer would be for your business. 

These kinds of prompts can do the trick: “Can you describe my potential customer base’s demographics and explain their problems? What products or services are they using now to tackle these issues? How could my business add more value?”

And finally, founders must always ensure enough customer demand to buy their product or service. In other words, is the problem you are addressing big enough? To find out, ask ChatGPT something like: “Can you give me five reasons someone would want to buy my product?”

2. Conduct Customer Interviews

Once you’ve collated the input and feedback about your business idea from generative AI, you can put it into practice with customer discovery. A round of interviews with prospective customers means you can understand your user base’s problems, empowering you to provide a more effective and valuable solution. Those startups who have failed may find they skipped this stage. 

Another pitfall is asking friends and family for advice or feedback. They’ll be overly generous, which can be misleading. Instead, get speaking to real prospective users because an idea is just an idea unless you have a paying customer.

For early-stage startups, using tools such as Google Forms or Survey Monkey for user testing can get the job done. But for more established companies with larger budgets, there are tools like CustomerGauge.

Also, remember that ChatGPT can come in handy here for generating questions. You just need to describe your business and potential customer base for the LLM to create three compelling value propositions that address how your company solves a problem. When it comes to the customer interviews, you can ask which of the three value propositions resonates most.

If you feel particularly adventurous, you could build a prototype of your digital product or put wireframes together with a design tool like Figma Plus before getting in front of customers. Users could interact with the prototype directly and provide insights about usability via comment mode. And Figma’s screen recording software can capture customer interviews. 

Customer interviews are invaluable if you want to know if people would pay for your service or product — and how much. They can also be an opportunity to gather feedback or ask what essential features you need to include to win business. 

3. Leverage Landing Page Apps 

Landing pages are like interactive online business flyers and are a great way to target different customer segments with tailored information. It’s also a low-cost, efficient, data-driven approach to test market potential. Why do you think even established companies use landing pages to launch new products, letting customers preorder or sign up for a waitlist? 

By tracking metrics like page visits, click-through rates, and conversion rates, you can determine if there’s genuine interest in your idea. 

The company Carrd helps entrepreneurs make free landing pages, while ConvertKit can drive email newsletter signups with its built-in email marketing tool. But many other apps are available, too, enabling entrepreneurs to build one-page websites that are easy to tweak and customize without any serious coding. These apps also often facilitate A/B testing and the experimentation of different headlines, images, or CTAs to optimize conversion rates.

Lastly, to convert prospects, there needs to be an action for them to take, like signing up for a newsletter, filling out a form, contacting you, or purchasing an e-book. 

Overall, a landing page is a safer bet than building a full product or service: If the business idea doesn’t resonate with an audience, you have yet to invest heavily.

4. Examine Intelligent AI Assistance for Business Planning

Finally, even though today’s business planning software platforms have good intentions, sometimes they hinder entrepreneurs’ ability to ideate, design, and launch successful businesses. That’s because current platforms are missing a learning component to assist entrepreneurs in articulating their intentions and minimizing project timelines.

This is where an AI-powered co-pilot comes in to make business planning more accessible and democratize AI for all. Newer AI-driven platforms and apps are now available that use Open AI’s APIs, for example, alongside fine-tuning models, to produce idea evaluators that inform an entrepreneur if their idea is worth pursuing or not. The platforms can assess the uniqueness of the solution and business model, giving entrepreneurs a score and offering suggestions for improvements in key areas. 

The feedback mechanism and personalized assessment of an idea, target market, or problem statement can help entrepreneurs iterate quickly and develop business plans. 

But remember, receiving a high score on these AI-powered platforms doesn’t necessarily mean you’ll be successful — it is just a barometer. However, the valuable insights and recommendations provided could optimize data-driven decision-making and enhance the success rate of new ventures.

Today, startups are up against many factors: talent shortages, funding obstacles, fierce competition, and an economic downturn. However, these emerging companies are essential for the global economy’s resilience to encourage innovation, job creation, and technological development — but only when a startup effectively addresses a pressing issue and can sustain operations.

That’s why leveraging different technologies for better business planning is vital, providing a more favorable environment for startups to thrive and meaning we are all better off.

Disclosure: This article mentions a client of an Espacio portfolio company.