Stop Validating Your Business Idea. Start Validating your Valuation

What is Idea Validation?

When consulting with marketing people and growth hackers, they will say that a necessary stage in establishing a new venture - whether it is a startup or another business is the stage of validating the idea or the market.
Idea validation involves collecting proof around ideas via investigation to make quick, informed, de-risked conclusions. It's a strategy that starts from an idea and typically ends with a paying customer. The purpose of idea validation is to expose the concept to the practicality of the wild world before you build and release the final product or offer.
We checked whether it made sense to validate ideas.

The concept of idea verification aims to check whether new ideas are applicable. That is, whether a particular thought is likely to succeed. In principle, this step is necessary for understanding the chances of success of any business.
When they thought of inventing the first car - it was clear that the idea's feasibility and the demand for the product had to be verified, even when we built the first airplane, the first cell phone, the first email software, and even when we built the first landing page software.

But since then, everything has changed. There are dozens of companies that make cars and airplanes, tens if not hundreds of companies that make cell phones, and hundreds if not thousands of companies that have developed or are developing email software and landing pages. Their ideas have long since been validated.

What should you focus on instead?

What is Value Validation?

Over 95% of business ventures adopt another company's successful idea and are merely an attempt to create something similar. For them, there is no point in idea validation.
For them, examining their ability to generate value for the shareholders is necessary. Testing the ability to generate value is performed by answering questions such as:

• What is their ability to market the product?
• How many customers are expected to buy the product?
• What is their profit margin?
• How fast can they grow?
  And many more financial parameters are supposed to understand whether there is economic feasibility for the company.

How to Perform Value Validation?

The process of value validation is not complex nor expensive and does not need to take a lot of time. It also does not require much knowledge of company valuation. But it is an essential factor, one of the most important in deciding whether to establish the company.
There are many technologies, such as the technology developed by Equitest, which make it possible to estimate the value of a company quickly and without prior knowledge. All you have to do is answer a few questions related to the company's founding team and the company, and Equitest's software will allow you to get the company's value.

Conclusion

In conclusion, if you are about to start a company or are in the process of idea validation, give it up and move on to perform a value validation. You can validate it in 30 minutes. Try our intuitive ai based business valuation software or our business valuation calculator, or you can contact us for free advice or schedule a demo.