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5 Ways to Validate a Business Idea, Right Now

Don't let your day job or lack of capital stop you from finding and testing a business idea. Here's how.
Last year, I embarked upon a personal challenge to validate a business idea in 30 days. To make it even more difficult, it was a random idea chosen by my readers. They asked me to do it without using my existing website, traffic and business connections and without spending more than 20 hours per week on the project. On top of that, I limited myself to spending no more than $500 validating this idea. The experiment was a success.In just two weeks, I built an email list of 565 subscribers without having an actual website. Then, I reached out to a handful of those subscribers and pre-sold 12 copies of a book that didn't even exist yet, all in less than 30 days. I wrote about the experiment in real-time with in-depth weekly updates, successes, failures and lessons learned along the way, right here in my validation challenge. Today, I want to share with you the five most effect…

Note ban: New-age startups exult, claim jump in digital transactions

The demonitisation may also push more people online, make India "data rich" and facilitate a transparent credit ecosystem, according to experts

India deciding to scrap existing currency notes of Rs 500 and Rs 1,000 is being welcomed by the country’s fledgling fintech and online commerce startups like manna from the heavens.

They’ve rushed to capitalise on the hype around the cash crunch people are facing by promoting their own cashless payments and related services. Many have claimed big jumps in the volume of transactions they now see on their platforms, as India’s smartphone-toting English-educated urban households look at digital payments more seriously.

The other choice is standing in long, serpentine queues at banks to exchange their old notes for the freshly minted versions that the government has released.

“OptaCredit has seen a 300 percent increase in loan applications after the government’s announcement of banning Rs 500 and Rs 1,000 currency notes,” an online lender who loans money to people based on employer data, said in an emailed statement to Forbes India. The startup, founded by a former executive at Royal Bank of Scotland and consultancy EY, S Kumar Srivatsan, is operating with a seed funding of $500,000.

Paytm, India’s largest mobile payments company, took out front-page ads in various national dailies, thanking Prime Minister Narendra Modi for his “bold move”. Rival Freecharge says it saw a “12 times jump overnight in the average wallet balance” among it mobile wallet users.

Modi’s announcement, made on November 8, “is the biggest boost to creating a cashless India”, Freecharge’s CEO Govind Rajan said in a press release. “The 12x surge we have witnessed is unprecedented and clearly driven by this big announcement,” he said.

Freecharge is part of Delhi’s Jasper Infotech, which operates the online commerce site Snapdeal. The company, on Thursday, rolled out a “wallet on delivery” option for customers, doing away the need to pay cash on delivery, it said in a press release. Customers could use their FreeCharge wallet to pay for their orders instead, after delivery. Snapdeal expects to cover all its customers in the country over the next few weeks with this service.

Over the last two years, India has seen a surge in fintech startup investments as more services have become digital payments-friendly than ever before. A smartphone boom in the country, helped by affordable 4G smartphones that aggressive Chinese vendors have flooded the country with, has added impetus, while wireless providers have slowly started expanding their services.

Widespread adoption of digital finance, or smartphone-based payments and financial services, could increase the GDPs of all emerging economies by 6 percent, or a total of $3.7 trillion, by 2025, consultancy McKinsey & Co says in a September report. This is the equivalent of adding to the world an economy the size of Germany, and could create up to 95 million new jobs across all sectors of the economy, McKinsey says. Lower-income India could add as much as 10 percent to 12 percent.

The note ban is already prompting some fintech companies in India to revise their own growth projections. MobiKwik, a mobile wallet provider that competes with Paytm and Freecharge, among others, expects to “easily hit $10 billion in payments volume by 2017”, the company said in a press release. “We were earlier trending to process $1 billion in payments by 2017,” it said.

“Discontinuing the Rs 500 and Rs 1,000 notes, apart from being a welcome attempt to curb black money, is also a great step towards redefining the credit ecosystem in India,” says Abhishek Agarwal, CEO of CreditVidya, a credit-risk assessment services provider.

This step “will push many individuals to transact online,” Agarwal says, due to the relative convenience. And as digital wallets evolve and acceptance of debit/credit cards increases, India will see significant expansion of the cashless economy and deepening of the digital footprint of consumers. This will in turn facilitate more accurate evaluations of creditworthiness of loan applicants, and “enable instant credit decisions by banks and other lenders”.

Agarwal added: “This is a laudable step on the part of the Reserve Bank of India as it will make India 'data rich' and consequently, enable millions more to access transparent and affordable credit.”