I’m very interested in how startups validate their ideas. I’ve mentored nearly 100 startups in one-to-one sessions in the last six months. But I’m finding that actually a huge amount of them barely validate their ideas at all. Or just do it very badly.
So, how should a startup validate whether there is a market need for what they’re creating?
There’s no one right way to answer the question – how do I validate my startup idea? And, even if there was perfectly, it wouldn’t guarantee success. There are too many other variables – the economy, your own health, access to finance, governments, global pandemics, and sheer luck.
But going through a thorough validation process does hugely reduce the risk of failure.
What I outline below is the method I’ve been using for a while. It’s not comprehensive, and each of the steps can be done in a much more detailed way. But it’s quick, captures good data, and gives you a very strong footing to start your journey.
- Define your customer – 1 hour
- Read a book – 3 hours
- Write your hypothesis – 1 hour
- Create and distribute a survey – 4 hours
- Speak to people (properly!) – 10+ hours
Here’s a quick breakdown of each one of these.
1 – Define your potential market, and your potential customer. You may already have a typical customer in mind, but try to drill down into something specific. It’s not enough to just say “This is for entrepreneurs”. Or “It’s for single mums”. You need to define them more clearly by their behaviours, as well as their primary characteristics. Try something like “Time-rich, cash-poor, freelancers who need extra sources of income”. Or “High net worth individuals who take more than ten flights for business a year”.
2 (Optional, but VERY strongly recommended) – Read The Mom Test. I think it’s the most important business book I’ve ever read (I’m not getting paid to say that, I just genuinely believe it!), and it fundamentally changed how I talk to (potential) customers. It stopped me being obsessed with my product, and fall in love with the problem. I should get commission for how often I recommend it! If you have already read it, and are confident that you don’t need to refresh your memory, then move on to stage 3.
The Mom Test is a book that helps you speak to your customers in a way in which they can’t lie to you, subconsciously or otherwise. By talking about their life, and the problems they face around your area of interest, INSTEAD of your solution, you get an unfiltered, unbiased set of feedback about what they REALLY want to have solved. And not just feedback to the idea you have presented to them, which is probably a very different thing. This is a VERY important thing to understand, especially as “no market need” is the most often cited reason for startups failing.
Don’t let your ego get in the way of having a successful business. Your solution isn’t more important than their problem.
“Your solution isn’t more important than their problem”Tweet
If you don’t want to spend 3 hours reading the book, spend an hour watching the author talk about it. If you don’t want to spend an hour watching that, spend three minutes watching this video, or reading this blogpost. Ideally you’ll do all of the above, just so you fully embrace the idea.
3 – Write your hypothesis. I won’t write too much here, as there are lots of great blogposts out there that do a great job of explaining good ways of nailing this. In short, you’re looking to find a hypothesis that you can test with your customer conversations. There are several different templates for this, but this is a simple one to start with.
I believe [target market] will [engage in this behaviour / use this solution] for [this reason].
You can refine this as you go along, and as you speak to customers. After all, there’s a very good chance that your research will show you that your hypothesis is wrong – and therefore you’ve just saved yourself thousands of Pounds, Dollars, or Euros, and 2 years of your life. Yay!
If your hypothesis is proven wrong, you can come up with a new one, and start again.
4 – Design a survey that is easy to distribute, and easy to fill in (multiple choice here). The idea is to capture some rough data that will give you some basic insights (if you’ve written some good questions). But this data alone will not give you anywhere near the insight you need. Its main function is to be the top of a funnel for getting people on the phone to do the real interviews.
Here’s an example of a real, live survey that I’m currently using to capture data from potential customers. Feel free to steal the format, and also please fill it in if you’re an early stage founder, too.
I’ve used Google Forms in this example, but I also heartily recommend the services of Doopoll.
Make it mainly multi-choice, to make it a low barrier to people filling t in, but if you feel like you want to devote one question to free-entry, then go ahead. It can sometimes be a simple “Is there anything else you would like to tell us?” thing at the end.
Distribute via the usual channels, and call in favours from people who can help you reach your target market.
Hint – Twitter is a search engine for human beings and their intentions. Want to find people interested in, for example, medtech? There’s a ton of hashtags these people will use, and that info may also be in their bio. Looking for people who are struggling to hire developers RIGHT NOW? They’ll be asking questions on Twitter (and other social media) with keywords that make them findable. It wouldn’t take too long to tweet fifty of them with a polite message, asking them to give you 2 mins of their time to fill in the survey, as they’re interested in your area of research.
Bonus – it’s also an email list for you to approach to be your beta users once you have an MVP up and running. But, be respectful. These people gave you their time for free, so don’t just add them to a never-ending drip campaign.
5 – Speak to the ones you have chosen. Read The Mom Test *before* you speak to them. It’ll allow you to ask questions that get to the root of the real problems they face in this area, and not just answer questions that are limited to the scope of your proposed product. In an ideal world, they’ll end the session not having a clue what your product is. It’s all about them, NOT your product.
I’d strongly recommend speaking to at least 25 people. Preferably more like 50. If you have chosen a well-enough defined target (and not just something vague like “car owners” or “entrepreneurs”), and you listen carefully, clear trends will start to emerge. And these may well be problems that you can solve!
Hint – I strongly recommend Calendly (or similar) to provide a 15 or 20-min link to your interviewees, allowing them to book the relevant slot in your calendar. This will give them confidence that you intend to honour your 15 min promise. It also keeps you concise in your questioning, and get to the point. If they’re happy to keep talking, that’s great. But don’t abuse their goodwill.
Finally – Fall in love with the problem, not your product. The market, in a true economic sense, doesn’t care about your product. It only cares about you being able to solve a problem. Don’t succumb to Ugly Baby Syndrome, where you have come up with an idea that you LOVE, and you’re deaf to any market signals that tell you that it’s no good.
I know that I’ve made this mistake in the past. To be enthusiastic, and in love with your idea is a very normal thing. And it’s particularly typical of entrepreneurs, as we’re all out trying to change the world. But we’ve been mis-sold the concept that the moment of genius, and the idea itself, is sacrosanct. But successful entrepreneurship is about a disciplined process. And validation is an absolutely vital part of it.
I once had the “product-first instead of problem-first” way of doing things described to me as “designing a key (product) and running around trying to find a lock (problem) that it will open“. Surely it’s much better to find a lock, study it, understand it, then design a key to perfectly open it.
“Stop designing a key (product) then running around trying to find a lock (problem) that it will open. It’s much better to find a lock, study it, understand it, then design a key to perfectly open it”.Tweet
If you’ve done all the steps above, you now understand the lock MUCH better. Go make a key to open it.
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If you’re a startup investor or programme manager, and interested in this as a fun, interactive, and challenging workshop for your founders, drop me a line.
Update – I’ve had a few people ask for my input on their ideas. If you’d like a free mentoring session, you can book in here. No strings. I just love helping early stage startup founders.