How much money would you need to prove the concept for your next product? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
The most important thing you have to invest in building your own idea is your time. Time is your most valuable resource and is often the biggest constraint to building a product. Invest the time to researching your idea, understanding the market, and figuring out the pieces you need to pull together in order to execute.
The amount of money you need to prove the concept depends on the product or business. To generalize, some businesses are fairly easy to start (i.e. a Chrome extension that can be built with a basic knowledge of coding) while others require upfront investment (i.e. you are selling physical goods). Software or web-based businesses require less upfront investment because they are digital-first solutions. Businesses that sell physical goods will require an upfront investment to procure or manufacture inventory to sell.
One way to prove out a concept is to build an MVP (minimum viable product) of your product. An MVP is typically a bare-boned version of your product that is used to test whether the market and customers are even interested in the idea. MVPs typically focus around a core, basic functionality that can show the products potential. Building an MVP allows you to test the product before investing more capital and time into developing it. For mobile apps, software, or websites it's fairly capital efficient to build an MVP as long as you have time and the technical expertise. It's tough to build MVPs for physical goods, but one way to test market demand is to use paid acquisition to acquire customers even before you have a product. For example, you can drive customers to a landing page where they can sign up for a waitlist to buy your product. This lets you test customer acquisition, customer demand, and gives you a better understanding of your target audience. Building an MVP proves there is market demand for your product and can be done in a capital efficient way.
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