Startup Idea Validation Is A Numbers Game

We’ve spent the last couple of sessions at Startups Live talking about idea validation: how do you know if an idea you have is an actual viable business in the first place? How do you go about learning about your idea from the people whose opinions matter most – customers?

For this session, we’re staying on the idea validation theme, but we’re taking it a bit more tactical, focusing on actual, concrete methods you can use to validate your ideas. Joining us for this conversation is Stuart Brent, founder of userinput.io, a service that provides on-demand feedback for websites and business ideas. Stuart has shared his favorite startup idea validation techniques with us in the past, and he added his insights to this conversation as well.

The main takeaway? Idea validation doesn’t have to be high-concept.

As Startups.co Founder Wil Schroter puts it, it’s not a Dark Art. A lot of the time, it really is just as simple as asking questions – and listening to the answers.

The most important thing, though, is that it should never end with questions and answers. Every idea validation project you undertake should be done with a singular goal in mind: acting on that feedback, and using those answers to build a better, smarter, stronger product.

SEARCH ENGINE = IDEA VALIDATION ENGINE

One surprisingly simple idea validation technique you can do early on: Google it.

“Search volume for your solution can be good evidence that people know they have the problem,” points out Stuart Brent. If people are Googling “How do I improve X?” or “What’s an easier way to do Y?” – that’s a pretty solid sign that there’s some appetite for what you’re planning to offer.

An added benefit of the Google search approach: it has the weight of numbers behind it. Search engines are inherently built around numbers – they’re built to show you the answers that they think will be most relevant to you. The higher terms related to your problem and solution rank, the more confident you can be that people out there are asking the Google Gods about your problem – and, without even knowing it, asking for you.

ASK THE AUDIENCE

We spent a lot of time during last week’s session about the value of just talking to potential customers as you’re validating your idea. But that sparked another question: where do you go to find people you can ask about your product?

To a large degree, this depends on who your target audience is. If you’re building a product for senior citizens, it doesn’t make a whole lot of sense to hang out on college campuses asking for feedback. So think about who your target customer is, and where they’re likely to hang out (this is a useful exercise in and of itself, as it gets you thinking about your audience and their behavior) – and then just go there, and start talking to people.

Again, this doesn’t have to be some ultra high-tech ordeal. As Stuart Brent pointed out, “Startup Weekend-ers go to the mall and cold call contacts for pitching and feedback.” Startups Live regular Kevin Ball says he once spent an afternoon chasing people down at Whole Foods to get feedback on his product.

Don’t underestimate the value of online communities for gathering feedback, either. Last session, we spent some time talking about the importance of “living where your customers live” online as you’re trying to learn about your audience and what they want. The subject of finding customer’s digital watering holes came up again this session, as founders talked about the value of online communities in asking for concrete feedback.

A few platforms in particular got love from the Startups Live crew: Reddit and Facebook groups. “Facebook groups are a collection of people interested in the same topic,” points out Kori Ashton. “They’re a hot pot of input, feedback, and ideas they can also very quickly source competition that you didn’t know existed.” The same goes for Reddit, with an added benefit: as Stuart Brent observes, you can count on Reddit users not to pull their punches. “They’ll definitely critique your idea (or shred it).”

Again, it is crucial that you think critically about who your customers are and where they are likely to be. So, for example, Product Hunt is a great stop on the validation train – if your target audience is the kind of person who is likely to hang out on Product Hunt (so developers, designers, tech enthusiasts – in other words, most likely, people like you). But if your target audience is, say, moms with children under five, or septuagenarian gardening enthusiasts, or whatever else the case may be – chances are there are other venues, physical and digital, that will yield more relevant feedback.

IT’S ABOUT THE NUMBERS

Another question that came up as we discussed customer validation: how many people should you aim to talk to?

One Startups Live participant says he aims for at least two interviews for every “customer profile” he develops, but at Startups we recommend aiming a bit higher than a handful of responses. Last session, Ritika Puri talked to us about conducting phone interviews with more than 100 potential customers for her business, Storyhackers. At that volume, Ritika was able to identify patterns in participants’ responses that yielded real, actionable recommendations about the direction they should take their product.

Long story short: idea validation is a numbers game.  The more people you ask, the more confident you can be that the answers you’re getting are representative of your market, and that there are no confounding variables lurking in the background and skewing your results.

That being said, be careful about getting too bogged down in your feedback loops. The goal with customer validation is to gather answers quickly and then take those answers back into developing your product, not to ask every conceivable question from every conceivable customer you could ever come across.

Be thorough, but know when you’ve got answers you can work with, and you’re ready to move on. Don’t forget – validation is an iterative process. You can always come back for more later.

GET COMPETITIVE

While you’re doing your due diligence with background research and customer surveys, don’t forget to spend some time asking your would-be customers about their current solutions to the problem.

Yes, we’re talking about a little early competitor research.

If there’s not competition, you better be darn sure you’re not on crack.

Too many first-time founders suffer from “first and only”-itis. They’re convinced that if they’re not the first person to ever think about a problem in the history of the world, then it’s not worth moving forward. But far from scaring you away from your idea, a few competitors should clue you in that you’re onto something. The existence of competition is a form of validation in and of itself. It’s proof positive that the problem you’ve honed on is, in fact, a problem – and that people are actively looking for ways to solve it.

In fact, as Art Trevethan points out, “If there’s not competition, you better be darn sure you are not on crack.” The chances that you are a visionary genius – the only person in the world to identify your problem and propose a solution? Let’s just say those chances are slim to none. The chances that you’ve landed a problem that others have tried to solve before, but perhaps have not solved as creatively or efficiently as it could be solved? Those chances are significantly better. And the sooner you are able to hone in on who your competitors are, the sooner you can get a clear picture of what you need to do to stand apart – and eventually stand alone.

PUT YOUR MESSAGE OUT THERE

So far we’ve talked a lot about surveys and interviews and search queries, and don’t get us wrong – all of that is great, and hugely important to the validation process. But as long as you’re just talking to customers, it’s all purely theoretical. Sooner or later, you have to flip the switch into production mode. Sooner or later, you have to put something concrete out in the world, and see how the world (and would-be users) respond to it.

We’re not necessarily talking about a full-blown version of your product, either. Just throwing together a simple landing page and giving people an opportunity to sign up to learn more can go a long way in helping you to gauge how effectively you’ve identified your problem and your audience – and how well your proposed solution resonates.

An added benefit of using a landing page as a customer validation tool: it comes with concrete metrics attached. Page visits, sign-ups – these are signs that become a valuable portrait of how people are interacting with your brand and your message. A landing page is also an opportunity to do some early A-B testing, experimenting with different headline and body copy and different CTAs to see what connects.

Launchrock was purpose-built for fast, easy idea validation. You can put together a polished, responsive landing page in a matter of minutes – and it comes equipped with analytics on the back end to show you how your page is performing.

It feels like a big step, putting your idea out there. But it’s steps like these that move you beyond the hypothetical and toward building an actual company.

TAKE IT FOR A TEST DRIVE

Another validation tactic we like that moves the process beyond “ask and answer” to more concrete, market-like conditions: running a pilot version of your service. Again, this isn’t necessarily the same as having a full-blown product ready to go. It’s about taking the minimum-est minimum viable version of your product, and seeing how it flies under actual market conditions.

One of our favorite stories about this kind of validation comes courtesy of the eCommerce shoe company Zappos.

eCommerce may be old hat now, but at the time Zappos was getting off the ground, there was no guarantee that people would pay for shoes online, without being able to try them on first.

So, the Zappos team came up with a simple but ingenious way to test the waters: they posted photos of shoes from local shoe stores on a website. When a customer ordered the shoe online, someone from Zappos  would literally have to go to the store and buy it.

The approach was scrappy, all but held together with staples and duct tape. (Over at Startup Grind, they call this approach a Wizard of Oz MVP). But it got the job done. It gave the Zappos team a chance to confirm that, yes, customers would pay for shoes online – before they invested valuable time, energy, and resources into building infrastructure and inventory.

SALES…RIGHT?

As Startups.co Founder Wil Schroter likes to say, paying customers are the only experts when it comes to idea validation. So if paying customers are the ultimate idea validators, it stands to reason that sales are the ultimate form of validation, right?

Well, yes and no.

“Some sales” is so dangerous because it’s validation that your idea can make some money, but it’s not validation that your idea can scale, or even really work out.

As Ryan Rutan points out, you need to be wary of putting too much stock in a few closed sales. “‘Some sales’ is so dangerous because it’s validation that your idea can make some money,” says Ryan. “But it’s not validation that your idea can scale, or even really work out.”

Don’t forget that validation is a numbers game. A few data points – even when that data is compelling as people literally giving you money for your product – doesn’t complete the picture of what the process will look like at scale. Keep gathering data, keep filling in the picture – and don’t be too surprised when the result looks different than those first couple of data points suggested.

IDEATE. ITERATE. VALIDATE. REPEAT.

There you have it: the Startups Live crew’s ideas on techniques for getting your ideas validated. From user interviews and surveys to test sites and pilots, idea validation is about getting as much information about your idea and your product as you can – and then taking all of the insights you unearth and putting them right back into your product. It’s the essence of design thinking, and it’s how the products we all use and interact with every day got where they are today: ideate, iterate, validate, repeat.

Happy validating.

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Got It. What’s Next?

Ready to build a test site and start validating your idea with actual users?
Head over to Launchrock to start building your page.

Want to boost your idea validation with more concrete metrics?
Learn about Data-Driven Decisions from data scientist extraordinaire Mike Greenfield

Need help thinking about who your target customers are?
Let Julie Hamwood take you through the process of Creating Customer Personae.