How did you go with mind mapping and customer validation? How many people agreed to pay for your idea/product/service? How many of them were a convincing yes? How many of them were halfhearted yes?
Was it difficult? Was it fun? Are you still keen to keep doing this in the long term? Remember that glory does not come easy and Rome was not built in a day. If you cannot see yourself doing this for the next 3-5 years, it’s better to call it quits now. You have not wasted any money yet but once you decide to go ahead from this step, quitting would not come cheap. We suggest you open your mind map and write down the feedback you received from the potential customers and make changes as required. Keep track of the changes as that will give you a great insight in the future.
Feedback loop and improvisation:
Remember the closed loop feedback? These are your early adopters who trust you and your idea. Work with them to keep taking continuous feedback on new features and planned upgrades. To be successful, listen to your customers. Give them what they want and they will continue to invest in you.
Now it is time for you to start doing your market research. Put concrete effort and search everywhere you can. Also make comments on what stands out in each of the platform. We have attached a market research worksheet for your help.
There are a few things you want to research into:
The total market size for your product/service. If a product/service like yours does not exist, then look for the market size of the closest traditional industry. For example, when Uber came out there was no other company providing that service which means it was impossible to determine the market size. They were creating a new service altogether, but they did a market survey of the total size of taxi bookings worldwide.
Find your top 10 competitors worldwide
Revenue models of all the top competitors
Market share of all the top competitors (if available)
Who are your direct competitors in the area you will service? How long have they been established for? What are their strengths and weaknesses?
There are some awesome tools that can help with market research:
Google Keyword Tool
Social Mention (www.socialmention.com)
Google App Store
Apple iTunes Store
Government industry reports
IBIS World Reports (Paid)
Once you have done the market research, you should be ready to work on your revenue model. Please note that this is not going to be final but at least you are weighing the pros and cons of the different models. Most investors hate to see businesses without any revenue models figured out.
You should have one main source of revenue at least – something that people would not hesitate to pay you for. You can also have other sources of revenue. AirBNB generates the bulk of its revenue from room bookings but they also generate revenue from selling experiences.
Some of the popular revenue models are:
Rental or Leasing Model
Third party advertising
Sponsored ranking model
Now, it’s time to invest in your business plan. Yes, it is very boring and time consuming, but it is well worth your time if you are serious about this. As part of your package, we have attached a template which will help you put it together. Be as thorough as possible and remember that it will, and it should change with time. As you progress through your business journey, your business plan will progress with it. By keeping track of all the changes, you will get much more valuable insight than any other consultant ever will.
Here is your free business plan template courtesy of Government of Western Australia.