Business Idea Validation: Still Popular For a Reason or Simply Overrated?

“Money talks, bullshit walks”

– Stephen King

The (Classic) Fear

If I were to ask you, “What’s the number one fear of new entrepreneurs right before the launch” what would you say?

Ok, I am not a mind reader but if I had to guess, I’d probably think you will go with the classic:

Putting something out there that nobody wants!

But you know what; in case that you missed it, 21st-century entrepreneurs seem to have figured this out…

Whaaaat?

3 words: Business. Idea. Validation.

Yep, just do a simple Google search for: ‘How to test demand before building a product’ and you’ll come across 1000s of articles, books, podcasts preaching the importance of battle-testing your idea before jumping in.

And if you’re someone like me your first reaction, chances are, would be to say: that’s a good thing.

Why?

It prevents you spending a ton of time (and money) on the wrong ideas

– It forces you to make your target customers part of the product creation process

It gives you a chance to collect feedback early on before to start getting emotionally attached to “your baby”

– It enables you to have a MUCH smoother course correction should you find that you’re heading in the wrong direction

But if it’s such a good idea why to waste our time debating this concept in the first place?

Simple. Because is not as straightforward as it sounds!

Let’s get straight in…

Testing Demand Before You Get Started

But before jumping on the other camp, I think it worth opening a parenthesis and exploring how today’s entrepreneur (try to) test the market’s water before diving in.

So, what’s the answer?

Here you go…

Method #1: Targeted Surveys

You know the drill…

Go and find your people, either online or offline, present the business proposition (what the problem is & how you intend to solve it), ask a bunch of “relevant questions” and close with the BIG question: if this product was available would you buy it?

Method #2: Do the ‘landing page thing’

The story usually goes like this:

– Set up a landing page

– Include a short snippet (or even a video) about the future product

– Say is coming soon

– And… ask the visitors to leave their email if they want to be notified when is live

Just like Dropbox, someone may add!

Method #3: Perform a smoke test

What’s that I hear you ask?

Well, simply put, is the idea of testing the appetite for a product by creating a site, pretending that a product exists, driving targeted traffic and if someone expresses an interest say something along the lines of “sorry, we run out of stock”.

Method #4: Pretotype it (aka Wizard of Oz MVP)

Pretotype?

Yes, you did read that correctly!

Without getting overly technical, this concept is basically ‘a smoke test mini-me’ with the only difference that when somebody says: “I want that thing”, rather than coming up with a lame excuse why you can’t deliver it you actually make things happen.

How?

By delivering the product manually behind the scenes.

Take Nick Swinmurn, Zappos Founder for example.

When he came up with the idea of having an online shoe shop for testing things out (before creating anything) he did this:

He began by asking local shoe stores if he could take pictures of their inventory. In exchange for permission to take the pictures, he would post the pictures online and come back to buy the shoes at full price if a customer bought them online.”      

 – The Lean Startup

And when someone ordered a pair of shoes from his online site he would then go and handle everything (payments, shipping, returns, etc.) manually without the customers having the slight idea that was the case.

Method #5: Put together a (real) MVP

No need to say more, right?

Anyhow, just for consistency, here is a formal definition by Eric Ries:

“The minimum viable product or MVP is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

 Yep, that involves actually developing something, but for most “experts” it still counts as a legit pre-build validation technique.

But with all that said it’s time to see what the others have to say…

Business Idea Validation is BS: Here you why!

Quite a strong thing to say you might note.

And what’s the reasoning behind it?

According to the advocates of this school of thought, in short, it’s because of this simple reason:

Hitting product/market fit takes time and iterating a non-existent product doesn’t work in the real world…

Just in case I lost you lets me break this down for you…

– Hitting product/market fit takes time

For most startupers, that’s almost a no-brainer.

As Ash Maurya eloquently put it in his classic book, Running Lean, “what separates successful startups from unsuccessful ones is not necessarily the fact that successful startups began with a better initial plan (or Plan A), but rather that they find a plan that works before running out of resources.”

Yep, they managed to iterate from a plan A to a plan that works.

The moral of the story?

No guesses here – expecting to hit a product/market fit from the get-go is more like a dream than reality so act accordingly…

However, where things get a bit more complicated is the second bit of the above reasoning.

– Iterating a non-existent product doesn’t work in the real world

Why is that?

Well, in the opinion of many, even if the claim that business idea validation, done right, allows you to almost predict whether a new product would be successful or not (by testing demand before building anything) is valid there are 2 BIG problems:

– On the one hand, it kills ideas that may at that time to be flawed but with some iterations could be turned into viable propositions

– And on the other hand, it keeps you spinning your wheels but getting nowhere

And the logic behind that second point is that unless you launch something out there (yep in the real world) you do NOT really learn because:

a) You’re stuck in your little bubble (or at best in a controlled environment) that acts as a reality distortion enabler

b) The feedback you receive from non-customers (which is practically what you’ll get unless you go through the MVP root) rarely cuts the mustard.

***

My take on this?

Even though I have to admit for many years I was a strong advocate of doing the “validation thing” (I even devoted a chapter about this in my book) I am now of the belief…

…that an entrepreneur’s job before diving in not necessarily to try verify that his/her ‘solution’ would be accepted in its current form but instead to ensure that the market exists (by doing some basic market research) and the pain-point s/he tries to tackle is not only REAL but is also PRESSING.

After doing that, I have no reservations to say that at least from my own experience shooting for a single feature MVP is the way to move forward!

But to answer today’s question, yes business idea validation is popular for a reason but I do agree that iterating from a plan A to a plan that works can NOT happen unless you launch something concrete out there…

Today’s Key Takeaways

– Hitting product/market fit takes time

– Iterating a non-existent product doesn’t work in the real world

– The feedback you get from non-customers rarely cuts the mustard

Ok guys, that’s all from me for today.

If you enjoyed today’s post, check out my kindle book, The Aspiring Entrepreneur Entry Strategy: A practical step-by-step guide for finding a validated, winning business idea that stays true to who you are, that is currently available at Amazon.

I hope to see you soon.

Best,

Andreas

“Startups take off because the founders make them take off. There may be a handful that just grew by themselves, but usually it takes some sort of push to get them going.”

– Paul Graham

Categories: Uncategorized

Download our free foundation guides

Comments are closed.

error: