“How do I validate my startup idea?” Here’s how:
I’m in the middle of validating possible business models for Whiteboard (it’s going great: every idea I have has been shot down in flames by people in the industry I tried selling it to. The good thing being that I hadn’t built a single feature yet.)
Anyway, I’ve just finished reading a few books on the subject of business models, among which Eric Ries ‘Lean Startup’ and Ash Maurya’s ‘Running Lean’. They both stress the importance of validation, and many startup founders voice the same sentiment. As Alex Barrera said: your mama is not your market. A lot of startups just don’t validate their ideas enough, leading to failure and frustration.
Ries and Maurya both stress that you should validate the riskiest part of your business model first. Usually the riskiest assumptions are about which customers you will be selling your product to, and the question: do these customers actually need your product? ‘Running Lean’ features a great quote from Marc Andreessen about traction, who says:
“In a great market, a market with lots of real potential customers, the market pulls the product out of the startup.”
Unfortunately, it’s rare to have people send you checks asking to build a product, and your first ideas will probably not be all that great. But how do you know whether your idea is promising, or so so, or even worse, one of those ideas that will only result in frustratingly slow traction? A blog post by Justin Jackson explains how you should try to validate your idea.
Importantly, he says, there’s a few ways NOT to validate your ideas:
1. Media exposure: media have their own agenda. They like novelty ideas, or bizarre ideas, or ideas that fit into some kind of zeitgeist (or how they see the zeitgeist). Since the media are probably not your customers, they are not a good yardstick.
2. People saying they like your product. Poison.
3. Traffic to your site. Means nothing, especially if you get featured on some tech blog: the visitors will probably be entrepreneurs who just want to sniff out your product but don’t want to buy.
4. Awards and industry accolades. Worse than poison (I summarize).
Basically: bullshit walks and money talks, says Jackson:
“If you’re creating a startup, where the end goal is to make money, the only real way to validate your idea is if people are willing to pay you for it.” And there’s a really easy way to check whether people want to pay: just e-mail twenty people and ask them to pay for your product:
For his new product, Drip, Rob Walling emailed 17 founders (like Hiten Shah of Kissmetrics). He said very specifically: “I don’t want you to tell me that you think this is an interesting idea; I want to know if you would actually use and pay for it.” Out of the 17 people he asked, he got 11 people that said “yes” (ref: at 7:00 of this podcast).
Jason Cohen, of WP Engine, puts it best: “When ten people say they’ll give you money if you build this thing, that’s the only validation that counts.”
Tell me your stories about validation![tldr, Justin Jackson][photo: Kevin Dooley, Flickr]
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