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Q: When a business owner includes a small team and incredibly little resources, how does he show effective traction? -Parth Mishra
A: To begin with, good to see that you will be thinking such as demonstrating some traction. There is real value in adopting this process vs. simply turning up with a concept (even if it’s well researched) drafted on a paper. Investors value having the ability to see some proof concept and traction before committing funding — even in the first days. They respect founders that are resourceful and able show this with little resources, since it helps demonstrate your scrappiness as a team.
Listed below are 3 ways to validate your business idea using little resources:
Demonstrate your use case with customer research. At Forerunner, we are big believers in prioritizing the finish user and concentrating on the knowledge you are delivering. Detailed consumer research and focus group learnings go quite a distance around. Prototyping your service or product and soliciting feedback on experience, position and price-value perception could be indicative of how your product may be embraced and help validate early product-market fit.
Based on what your company will sell, serve and deliver, it may be feasible to develop some online social presence and begin showing a base of enthusiasm for your offering. This could be done without financial commitment through the use of Twitter, Facebook, Instagram and Vine, among other internet sites. You may even turn to Kickstarter to greatly help determine your core target demographic and garner feedback.
If we’re discussing an enterprise-focused offering, hopefully there is potential to tangibly identify your core audience and acquire direct feedback from a variety of end-user companies that stand to be early beta testers.
Related: Where to find Beta Testers
Having the capacity to interpret comments from customers and incorporate that into your market strategy can be a meaningful way to show internal team traction. It shows a dynamic degree of commitment to feedback and some insight into your teams’ capability to iterate predicated on learnings.
Create a prototype product. Prototyping, generally, is important and doesn’t have to require meaningful resources. Most investors appreciate detailed market analysis and business design consideration with some investors being visual, while some are tactile.
Showing investors what you’ll be selling or offering is a wonderful way to understand when there is upfront agreement on the original direction and product priorities. Without some clear notion of what the product can look like or will be, it’s hard to learn if we are on a single page. If your product is web or app based, you ideally have the very least viable product site up. If not that, at least wire frames and a development plan set up. Having your development and/or supply chain partners identified and vetted may also lend credibility toward your product, plus your development and launch schedule.
Related: 3 Steps to Transform Your Business Idea Right into a Prototype
Identify hiring plan and potential members. When you are not able to make hiring commitments, you might help show market interest by having an array of likely candidates identified which have indicated an even of interest in joining once funding is secured and/or specific milestones are met.
If you ask me the most successful companies have founders that inspire interest both externally, and internally. It’s teams and empowerment of individuals that turn ideas into action. The more confidence which can be built that qualified people would want to participate what you’re building, the more compelling your prospects will be.