In 10+ years of working with startups, I’ve seen thousands of concepts. My initial meetings with founders have ranged from scaling businesses with multi-billion dollar valuations to a founder with little more than an idea on a whiteboard and everything in between. Over the years, one of the most common—and costly—mistakes I’ve seen comes down to this: building a product based solely on your idea.
What does this mean? Ideas are great, but they’re just a fraction of what it takes to create a valuable business. What really matters is finding an urgent customer problem so you can define a solution that addresses their needs. This is product-market fit, and it’s the most essential first step in starting your company. If you’re building a product based on your idea—and ignoring customer input—you’re leaving a lot to chance.
One of the most gut-wrenching moments you can have with a founder is being in the room when they realize the product they’ve built—spending hundreds of thousands or even millions of dollars—is worthless in the eyes of their target customer. But, when it’s done right, entrepreneurs can get their business started and even pay for the build of the product with customer revenue from the beginning.
Here are five ways to validate your idea to ensure the journey to building a product has a customer at the other end.
Define the Problem and Solution in Simple Terms
- Problem: What is the assumed market and/or societal need? What is the economic impact of the problem or opportunity?
- Solution: What is your assumed approach to solving the problem?
- Who are your assumed users, buyers, and proposed channels to capture them?
Define the Target Market
- Total Addressable Market (TAM). All potential customers.
- Serviceable Addressable Market (SAM). What are the filters to your TAM to get to your initial target market?
Conduct Primary Market Research
- Conduct qualitative interviews and quantitative surveys to gather primary market insights. This is your own research, not a third-party article or industry report.
- Use techniques that will get you unbiased results. Consult a market research professional if you don’t know what this means. You’re not looking for results that simply reinforce your assumptions. You’re looking for the truth about what your customers actually think.
Analyze Feedback and Repeat
- You won’t get all the answers in this first survey. You’ll get a few insights and gather data, leading to even more questions.
- Refine your interview scripts and surveys, then repeat.
Don’t Build Until You Hear the Market “Pull”
- I’m often asked, “How many interviews or surveys does it take before I know I’m ready to build?” The answer: You will know.
- Your feedback will evolve from negative or even marginally positive responses like “This is cool” or “I can’t wait to try it” to “Oh wow! I need this now” and “When can I have this!” and “This will transform how I run my business!”
In conclusion, don’t just blindly build something that reflects your idea. This is the lazy path; no easy button exists to create a great product and business. Talk to your market. Take the time to do the work and find the truth about what your market needs. Your future customers—and your future self—will thank you for the effort.