Whether you are new to startups or a startup veteran, you will face the fear of building something that nobody cares about. Startup founders (myself included) build before validating ideas. This guide is not intended to replace the fantastic work of Steve Blank, Marty Cagan, or Eric Reiss. They have all spent many years doing research and failing to bring us these concepts. If you are a startup founder and haven’t read their books, you need to.
So you have an idea that you want to develop. You’re excited and you want to just start building. If you are anything like me, you love to get to the building. You want to get your hands dirty in Sketch, spin up your Heroku dynos, and in ten minutes you write your first line of code.
Slow down turbo.
How do you know if your idea is worth building? How do you know if a market exists? You don’t need an MBA for this, I promise. Take a pause and follow these few steps to eliminate the risk from your idea.
- If you’re looking to raise VC to fund your startup, this process will show potential investors that you know what you’re talking about. VC pitches are full of market stats, industry trends, and sales pitches about the next great idea. Imagine if you showed up and pitched a VC saying.
“I’m building [your idea], I have iterated the idea 10 times while talking with 10 target customers and all 15 customers are begging me to build this product. Oh, and here’s some market stats and trends.”
- If you are self-funding your startup, this process will help to eliminate the risk of wasting money.
- If your goal is residual personal income, this process will give you a jump start on finding your first customers.
The process for eliminating startup risk is a pretty simple concept. The hard part is suspending your biases listening.
1. Identify the target customer.
You’ll need to take your idea and figure out who will use it. This isn’t just an exercise to write down a user persona. This is an exercise in understanding people.
Who, in your network, would you identify as the first customer of your product? Go talk to them.
Ask questions and listen. Try to understand them. Understand their daily work, their environment, and their life.
If it doesn’t come up in natural conversation, ask about the problem your idea is trying to solve. For example, if you are building the Uber for car washing you might ask questions like:
- How often do you wash your car?
- Do you use car washes?
- What is the best car wash experience you’ve had?
- Do you have a go-to car wash?
Listen to their answers. Suspend your own personal understanding of the problem. It is easy to hear what you want to hear to validate your own understanding. Listen with intention for things you don’t already know or haven’t thought of.
Do this same process 10 times with people in your network and you’ll form a strong understanding of your customer.
2. Iterate your idea.
Your original idea most likely was wrong, so you’ll want to iterate the idea. The key in this step is to iterate your idea, not the exact solution. You are trying to learn and craft your value proposition in this step.
From those 10 conversations you had with potential customers, you’ll likely have picked up on patterns. Adjust your idea to fit the new knowledge about your target customer.
Go back to those 10 people with an offering and see how they respond. Present them with a primary value proposition. For example…
“What if you had an app to order up a carwash while you work?”
Sit in the silence as you let them respond. You’ll be able to gauge their excitement by body language and initial response. You’re looking for enthusiasm and excitement. The best scenario is that you don’t get enthusiasm on the first attempt because this allows you to ask questions and refine the idea.
If you do this step well, you’ll end up with 10 potential customers that are ready and waiting for your product to come to life. In the most ideal scenario, these 10 customers will be your first evangelists to help you kickstart your marketing efforts.
3. Iterate your prototype.
Now that you’ve got an idea that’s worth solving, now you get to start building something. Eliminating risk is all about validating your assumptions as early as possible. You’ve eliminated the risk that customers don’t exist, you’ve eliminated the risk that customers don’t care, now we’ve got to eliminate the risk that the problem can’t be solved.
Start to build some prototypes of your idea. Start with rough sketches and outlines and talk to your customers. See if the concept makes sense.
Once you’ve got a concept that seems to work, start increasing the fidelity of your prototype. Start doing usability tests and make sure your solution meets the users’ expectations.
The Lean Startup Machine has created an awesome framework for this process. It’s called the Validation Board and it organizes your validation into steps and iterations.
If you do this 3 step process, you’ll cut as much risk as possible to ensure your startups success. If you take one thing away from this article, It’s that you need to talk to real customers early and often. So many startups fail because they assume that they are the experts.
Now go talk to some customers and iterate.