Startup Idea validation: How many people; how long before your idea’s worth pursuing?

Lets say I have an idea. Actually 3 different ideas I want to pursue. My next step is to get validation of that idea. The top 5 questions that I am looking to answer are (not necessarily in order):

1. Is this a real problem? (Pain point validation)

2. Is what I am trying to do solving the problem? (Product – market fit validation)

3. How much of a problem is this for the person who I am providing this solution for? (Customer validation)

4. Will people pay to have this problem solved? If so how much? (Pricing validation)

5. Is the problem big enough that I can make a large company out of solving this problem? (Market size validation)?

So the question is how much do you have to get validation for these questions until you decide to pursue it?

One approach is to actually develop, have customers pay and let the market validate your idea.Which is what was suggested by a user at HN.

The approach I am going to suggest is more measured and less expensive than actually developing the solution before you figure out if that’s the right idea for you to pursue. It involves talking to customers / prospects or even putting together a simple SEM campaign to test the idea out. I think many might say that’s not a new idea, but I dont see over 80% of startups doing this.

That’s way cheaper than time or resources to build your idea to a real product. At some time you have to build a real product and there no denying that.

First I would make a target list of 20 people – 10 who are potential customers who have the same title of the person you believe has the problem you are trying to validate. If you are a consumer startup, that might be the target audience of users who might want the product / service you are building. If you are an B2B company, look for the right title of buyer.

The list should include 5 potential industry experts, who might understand the nuts and bolts better and 5 “laymen”,  or those that have not much of an idea about the intricacies.

Is the number 20 enough? Maybe, not, but its a start.

Then prepare a one paragraph elevator pitch explaining what the problem is, and how you are going to solve it. Email it to your list and track their feedback.

Then try and get prospect validation. This is because people who know you might either a) not want to discourage you, and so give invalid answers, or b) might not understand the solution well enough to provide valid feedback.

I would setup Google adwords campaign for the keywords you think people will most likely click on. If you buy a domain and hosting from Godaddy or some other providers you even get $100 adwords credit, so there’s no excuse.

Create 3 different pages with your multiple campaigns and call to actions, and have a signup sheet (this is your call to action) for each. Track and categorize results. In each of these pages, provide a screenshot of your product / service you are trying to develop.

Wait, you think, wont this give my idea away and attract more competition. Sure, I think it might, but more likely, there’s competition already and you are just not aware of it yet is my answer. Or if there’s no competition, is that not a signal anyway?

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11 thoughts on “Startup Idea validation: How many people; how long before your idea’s worth pursuing?”

  1. Most of the top products that we use today were never conceived using any of the measured validation processes.

    If Zuck was thinking all this doing FB, he would have left the job to MySpace and Google.

    If Steve Jobs was doing such validation designing iPhone or even the first Mac, there would be no Apple as we know it today.

    If Edison had done this inventing the light bulb when there was no transmission & distribution of Electricity or even electricity companies, we would still be in the dark ages.

    All such advise is good on paper. Real life is chaotic, markets ignorant of their needs and ideators main job is to ideate and build. Some will succeed and many will fail. If you look at the ones that succeeded there will be no clear one reason why they did. So the best ideators are those who have developed a 6th sense to percieve what better the market wants and then iterate it to make it best.

    1. Very good point Aravind. I personally think Jobs, Zuck, Edison are exceptions not the rule though. In fact lets also throw in successful companies like Dropbox, AirBnB, Code Academy and the top 200 startups from the Valley into this mix. For every 1 FB, Apple there are 156,930 startups that were founded which did not the level of success these top 500 have. This post is for them.

      1. I definitely agree customers need to be in the loop for a product you build. My point simply is that the joy of entrepreneurship is creating a product that you think customers want, which they don’t know themselves will add value to their life, and take the risk launching it the way you think will work best for them…

        If we follow too many processes like you outlined, we are sucked into creating a business first hand and not a start-up with the idea that will do something cool and create a new market. Start-ups are meant to fail, so for every FB there will be 1000 others that tried something you wanted but you really did not want it and they fail.

  2. I am a strong believer in customer development as opposed to focusing only on product. I agree that talking to customers even before you start can be a fantastic way to build what your market wants, and often times, this may result in you ending up doing something fundamentally different from what you started out with.

    Having said that, I don’t completely agree that having no competition is a signal that the idea may not be worth pursuing since, in most cases, startups are building products that would re-segment an existing market in an innovative way. In such cases, there may be no direct competition. Also, don’t most investors prefer to fund innovative startups that are re-segmenting a niche as opposed to directly competing with an incumbent?

    Thoughts, Mukund?

    1. Vishal
      Let me rephrase, I dont think having no competition is a signal the idea may not be worth pursuing. In my experience its very rare that people have gotten unique ideas (including folks like FB, Google, etc.) I agree with you having no direct competition might be a huge plus, but that’s usually rare is maybe what I was trying to say.

      1. Totally agree.I do think it’s incredibly rare to come up with what they call a ‘ground-breaking’ idea, which is the reason I emphasized on ‘direct’ competition because there is almost always indirect competition or close enough alternatives as you pointed out below.

  3. Also I think there is always competition. It may not be in the anticipated form. Eg Youtube’s competitor was not some other video site, but TV. Hotmail’s was snail mail/fax/telegram.

    1. Yup Sushrut. Some people also call them alternatives not necessarily competition, but your point is well taken and valid.

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