Last Updated on July 17, 2022 by Dave Schoenbeck
Over the years, as I’ve coached talented business leaders, I have heard thousands of passionate proposals about the next best idea, concept, product, or service from my clients. I love their creativity, energy, and boundless confidence, but part of running a business is learning to validate a business idea, not just think up the next big thing.
While I don’t want to play the part of “downer Dave,” my obligation to my clients is to help them evaluate business ideas and see ideas clearly and objectively. One of the best ways to add rigor to a fair evaluation is to challenge them to prepare a pitch deck explaining the concept and present it to me as if I was a fictional outside investor or their imaginary board of directors.
Creating a Pitch Deck
A pitch deck can be a godsend if you need help learning how to validate a business idea. The systematic ritual of the pitch deck provides fantastic clarity for the business leader regarding their new ideas. The process will help them decide if the idea will hold up to scrutiny or apparent flaws.
For those new to a pitch deck’s idea, Guy Kawasaki outlines a great 10-slide process in his book, The Art of the Start. He claims that the 10 slides you need in your pitch are as follows:
- Title: This is self-explanatory. Give your idea a snappy title.
- Problem or Opportunity: Explain the gap in the marketplace that your idea will fill. Is there a need for your product or service? What problem does your idea solve?
- Value Proposition: Explain the value of your solution to the customer and market.
- Underlying Magic: Why will you be the one to pull this off? Describe why your solution is the right one.
- Business Model: Talk about how you’ll generate sales and profits.
- Go-To-Market Plan: How is your idea going to reach your target audience?
- Competitive Analysis: What are your competitors offering, and how will you beat or avoid them?
- Management Team: Who are the key players that will bring your vision to life?
- Financial Projections and Key Metrics: Provide a three- to five-year forecast, including all-important metrics.
- Current Status, Accomplishments to Date, Timeline, and Future Funds: Where are you right now, and how will you get where you’re going? How long will it take to get you there, and how will you pay for it?
In terms of how to validate a business idea, skip slides 8 and 10. You will see your idea differently when you answer these questions as though preparing to make a presentation to an unconvinced audience.
The pitch deck is a great tool to take you through the critical thinking process. If you keep these things in mind, you’ll be well on your way to learning how to validate a business idea.
Developing a business pitch can help you see your ideas. An outside perspective is helpful, too. Fill out my contact form for a complimentary coaching session, and I can teach you how to validate a business idea.
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