How to Test Your Business Idea? – A Detailed 10-Step Approach

A detailed approach to test your business idea


A Powerful Method to Test & Validate your Business Idea

Once you set out on a journey of entrepreneurship, it becomes extremely important for you to arrive at an idea that you can take forward as a business with fairly good confidence. Also, this needs to be done in a set time frame as time is one of the most crucial resources for an entrepreneur.

But such a business idea can become a far-fetched dream if you do not have a structured way to test it. Hence you need a testing methodology that is logical and also backed with data to see if your idea is worth taking forward.

In our article on 3 steps before MVP, we have discussed why problem identification is important before you do anything else. But the problems (of customers) that you begin with are still assumptions that you need to validate.  The journey from writing your assumptions to arriving at validation is what this article is all about and discusses in detail the approach to achieve the same.

When you first start with your business idea, all the assumptions that you initially make; related to your customer’s problems, your solution, etc. can be divided into 4 categories:

  1.  Desirability assumptions – These assumptions are related to your customer’s needs, your value proposition, channels to reach your customer segment, and relationships to retain them. Your assumptions that your customers need what you are offering to them or their problem is solved with your offered solution, there is a sizeable market to capture, you are using the right channels to reach your customers and you have developed the right relationships to reach them are all desirability assumptions.
  2. Feasibility assumptions –These assumptions are related to your ability to build the solution.  Assumptions that you have the resources to build your value proposition, you have the right capabilities to manage your key activities, and have the right partners to help build your value proposition come under this category.
  3. Viability assumptions – The assumptions that your customers are willing to pay you for your offered solution and that your revenue is more than your expenses fall under this category.
  4. Adaptability assumptions – The assumptions that your idea is correctly positioned to succeed against incumbents and new players and that your idea has taken into account market changes and trends fall under this category.  In short, you assume that it’s the right time for your business idea to work.

To avoid this article become overwhelming for you, we are presenting the following step-by-step procedure to help you test and validate your business idea in a more systematic way.


As a first step, sketch several variants of your business idea on Lean Canvas. Using this, you arrive at multiple customer-problem-solution possibilities. Customer-problem-solution possibilities mean that you identify the problems of your potential customers and ideate solution to solve those problems. Apart from customers and problems, you also put the costs that you incur to acquire those customers and the revenue streams to generate cash.


In the second step, you choose the top three problems being faced by your customers.


In this step, you sketch a value proposition canvas.

Describe the jobs that your customers are trying to get done. Jobs can be functional, social, or emotional.

Functional jobs are the tasks they are trying to do in their work or to solve functional problems.
Social jobs include their expectations and activities to gain a particular social status or be perceived by others in a particular way.
Emotional Jobs include the things they do to satisfy their emotional needs. For example, doing things that give them a sense of self-satisfaction, make them feel safe, or motivated, etc.

Describe the customers’ pains and gains.  Pains are obstacles or risks in your customer’s jobs. Gains are the benefits they seek or expect.

Describe the features in your solution that can relieve those pains and create benefits (gains) for your customers.

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Again note that all the things (problems, customers’ needs, pains, gains, the solution, and its features) identified in step I to III above are still assumptions.  These assumptions are desirability and viability assumptions that we will take up first.

Alexander Osterwalder of Strategyzer has given an effective and scientific way to map these assumptions, and test & validate your business ideas. We have slightly modified this method to make it more relevant for startups. Following are the next steps that you can follow in mapping your assumptions:


After you have sketched your value proposition canvas, all the desirability and viability assumptions from step I to III should be noted down.

For example, your assumptions from step I to III can be as follows:

a) Related to Lean Canvas:

  • Related to Problem Section:  “we are solving those problems that our customers are desperate to get rid of.” (A Desirability Assumption)
  • Related to Customer Segment Section:  “we are targeting the right customer segment.” (A Desirability Assumption)
  • Related to Solution Section: “our solution solves the problems the way our customers expect.” (A Desirability Assumption)
  • Related to Channels Section: “we are using the right channels to reach and acquire customers.” (A Desirability Assumption)
  • Related to Revenue Stream Section: “we can get customers to pay us for our offered solution”. (A Viability Assumption)
  • Related to Cost Structure Section: “we can keep all our expenses under control and less than revenues to generate profit”. (A Viability Assumption)
  • Related to Unfair Advantage Section: “we can create an unfair advantage which is difficult to be copied by competitors”. (A feasibility & Adaptability Assumption). You can use it later while you test the feasibility assumptions.

b) Related to your Value Proposition Canvas:

  • “Our offered products/services solve for customer jobs i.e. satisfies their functional, social and emotional needs” (A Desirability assumption)
  • “Our products and services relieve their major pains (A Desirability assumption)
  • Our products & services provide significant benefits or gains” (A Desirability assumption)

You may use different ways to differentiate between desirability, viability and feasibility assumptions like different colored sticky notes.

Thus, from step I to IV, you have identified all your assumptions related to your business idea. In the next steps (to be presented in part 2 of this article), we will present a method to prioritize them and successfully validate them. CLICK HERE FOR PART 2 OF THIS ARTICLE

Do you feel there is something more to be included? Kindly write to us. We will be more than happy to consider your valuable suggestions.