How to test a new digital health startup idea on a limited budget?

Are you a startup founder with an innovative digital health-focused idea but not sure how to test it on a limited budget? You’ve come to the right place. In this blog post, we’ll explore some practical steps on how to test a startup idea and validate assumptions without breaking the bank. 

We’ll also provide tips for identifying and reaching customers, assessing risks and finding value propositions, with special attention to digital health startups. So if you’re ready to take your digital health or sports startup concept from dream to reality, let’s get started!

Write down your startup concept focusing on the problem

Writing down your startup idea is an important first step towards testing it on a limited budget. Your startup’s success can depend on the clarity of your idea and the detail you include in its description.

Firstly, before thinking of market validation, you must focus on the problem your startup aims to solve, rather than the solution itself (which is tempting!). We see it quite frequently esp. for engineer founders to start with a (technical) solution rather than a problem because they love building things. This unfortunately often drastically limits their ability to empathize with and understand their customers’ needs well and create digital health solutions that people actually need and want to use. Most startups fail for this reason – no market need for the solution created.

The problem you have identified in your concept is the first part of your startup hypothesis. It’s best to treat it as that because, even though you might already have some first-hand experience with the problem, you’re still assuming heaps – how many other people have that problem, how they deal with it now, if they really need a solution now, and many, many others. We’ll work with those critical assumptions after looking at your target audiences first.

Identify your potential customers

The next step is to identify your target customers: who has the problem you are addressing and where can you find them? Can specific needs and characteristics group them? Often when thinking of your target market, it helps to characterize your potential customers through the lens of needs and tasks in a specific context (so-called ‘Jobs To Be Done’), rather than just demographics or sociographic characteristics (age, education, ethnicity, and family status).

Once we have answered these questions, it’s time to dig a little deeper.

  • What specific problems are you helping them solve, what are their goals?
  • Do they have any existing solutions to those problems, and how does your idea compare?
  • What circumstances and situations trigger their search for solutions? How frequent and intensive is that need?
  • What value proposition does your digital startup idea bring to this customer segment?
  • List at least 10 actual examples (LinkedIn profiles?) of the ideal people that fit the bill.

Proto-Personas are a useful tool for recording your knowledge of your customer segments in one place. At this stage, it’s better to avoid spending a lot of time inventing and describing full Personas’ details until we have evidence from interviews and research. A Proto-Persona is thus just a scaffolding for the final fully-fledged version. It has limited information, and big parts of it are assumptions, but that’s OK – you create it to give direction to your customer research, not for product design.

List explicitly and rank all the assumptions you’re making

No startup concept is without risk. Chances are, the majority of what you have written down so far are assumptions that need to be tested. At this stage, we typically perform a risk assessment – how much and how solid evidence we have for each one, and how risky it is for our venture. Rank which of your assumptions come with the highest risk for your product idea, and for which you have the least supporting evidence. Focus there!

When testing your startup idea on a budget, it is important to start with high-risk and low-evidence assumptions and eliminate uncertainty by finding strong evidence for validating the riskiest assumptions using customer research and interviews, as well as analytical data and desk research. We really want to quickly eliminate the assumptions with the highest potential of killing your startup idea first!

Your value proposition is also one of the assumptions

Your idea of a solution for the problem you described, i.e. the value proposition you’re offering to the customers, completes your initial hypothesis, along with all the assumptions that must be true for it to work for them. The next step is to start testing all those assumptions with potential customers.

Now that you have identified your target market and developed a proto-persona, it’s time to dig deeper. In the next part of this blog post, we’ll explore how to validate your riskiest assumptions by testing them with potential customers and finding the right value proposition for your startup ideas. Learn how to eliminate uncertainty and create a successful digital health startup on a limited budget! Read on next week to discover more…

Learn more about our digital health solution ideation and design

  • Discovery, Customer Research, and Product Strategy
  • User Experience and Product Design
  • Requirements and Solution Delivery Roadmap