Goal of this stageEvidence that a specific group of customers has the problem, cares enough to pay, and that you can win against the alternatives.
First, develop the idea
We all get ideas every day. Almost all of them are forgotten within minutes, overtaken by the next one. A few linger. A rare few keep coming back. When you decide to do something about one, you have arrived at the very first step of building a tech startup.
Before you get carried away, the idea has to be developed before it can be validated. That work is done by you, the originator.
- Keep thinking about it. Give it time. Notice whether it still excites you a month from now.
- Talk about it. Speak to friends, family and colleagues. You are not looking for praise. You are listening for questions you cannot answer yet.
- Write it down. One page: the problem, who has it, how you would solve it and why you. Writing exposes gaps that talking hides.
- Check your own runway. How long can you work on this before you need income? Be honest with yourself and your family.
- Look for co-founders and helpers. Most good companies are built by small teams with complementary skills.
Common mistakes at this point
- Keeping the idea secret. Ideas are rarely stolen. Execution is what matters.
- Quitting your job on day one, before you know whether anyone will pay.
- Starting to build software before you understand the problem.
Then validate it systematically
Once the idea is developed, validate it systematically before putting your heart and soul into it. You cannot design a solution unless you understand the problem.
The four things to validate
- Problem. Identify the problem the idea solves and understand it as deeply as you can. How often does it happen? What does it cost?
- Customer. Which people or organisations have this specific problem? Talk to them. Aim for at least 20 conversations, and ask how they solve it today.
- Competition. Analyse the current solutions and providers, including spreadsheets, agencies and doing nothing. Why would someone switch?
- Opportunity. How many customers, at what price, and how would you reach them? Is the effort worth it?
Signals that it is working
- People describe the problem in their own words before you mention it.
- Prospects ask when they can have it, or agree to pilot, pre-order or pay a deposit.
- You can name your first ten customers.
Common mistakes
- Asking friends whether they like the idea. Ask strangers what they do today instead.
- Counting compliments as validation. Only commitments count: time, data or money.