Author: Tim Lampe || Source: StartupValleyNews Magazine || April 2nd, 2021
Great business idea – and now? Now it’s time to validate, i.e. to test your product in reality as early as possible. Validation is the basic prerequisite for your success. In this way, you collect reliable data with which you can sharpen your business model, reduce the risk of failure and take off your own blinders – in other words, look clearly at your vision. You can get real validation only from the market. And don’t forget, when you present your idea or product to them, it’s about collecting real data points, not nice compliments.
But how do you get the data and answers you really need? Honestly, you won’t get them for free. But there are some tips that can help you:
Validation tip 1: Interviews
Talk to as many – preferably unbiased – people as possible. Ask open questions, because they give you good insights into the needs and consumption habits of potential customers. I know that people are often reluctant to “just ask”. After all, most of the people you contact won’t be particularly interested in you (at first). But that’s part of the game – there have only been a few truly lucky people who have wowed everyone from minute one. If one in ten people are excited about you, you’re already really good!
Validation tip 2: Social media & platforms
Use social media for your cause. Social media surveys, for example, are a pragmatic solution. They are quick and easy to conduct and provide relatively reliable initial data from real people. The important thing here is that you must be absolutely sure beforehand that you are asking the right questions to the right people in the right way. So if you’re developing a product for moms-to-be under 30, “mommy gyroscope” and Instagram are better platforms than LinkedIn or “oldschool” Facebook.
Validation tip 3: Skin in the game.
Even a “yes” answer to the question, would you buy my product at price X, is nothing but lip service in the end. Only when your potential customers or partners actually commit to something that “costs them something”, you have achieved true validation. In the Bay Area, this is called “skin in the game.” You can start with this in small increments at the beginning. There are many other ways to get a commitment from your clients besides money. For example, if you can’t or won’t accept money yet, ask if they would share your product on their social media channels. You will quickly see if someone is willing to put their credibility on the line for you. Your logic should always be “we’ll build it if you buy it,” and not “would you buy it if we built it?”
Validation tip 4: Use “lean” methods
In the beginning, try to approach the topic as “lean” as possible and reduce your risk before investing large amounts of time and money. You can already collect the primary data and “skin in the game” without money and in only a few hours. And you can do it before you spend thousands of dollars on apps, prototypes, or websites. Tried-and-tested approaches such as Lean Startup and the Minimum Viable Product are ideally suited for this.
Sticking with it is important!
Even with successful startups, it often takes a few months or even one to two years for complex models to be successfully validated. Even if these always seem so fast and straightforward in retrospect. If you take a closer look, this is actually never the case. The big companies in particular, which are often quoted and hyped today, regularly made failed attempts on the way to validation and still do today – that’s part of the game. Check out the Microsoft Morgue or the Google Graveyard.
By all means, don’t be discouraged even if you don’t achieve validation on your first attempt. It doesn’t automatically mean that your idea is worthless. But you should critically question whether it is due to the lack of validation or errors in validation. Perhaps you have only reached too few people or exactly the wrong ones on your chosen channel.On the other hand, the first one or two customers do not automatically mean validation of a scalable business model.
I know from experience that there are many stumbling blocks on the way to validation and not every path is right for everyone. But no matter how you approach the topic, the important thing is to think beforehand about what outcomes will help you make the decisions at hand. NEVER try to “bend” the results, you will only harm yourself. Before you have turned “we believe” into “we know”, you should always invest in validation and not in the finished product or “bureaucracy”.
Conclusion: Your own Data is what counts in the end!
A well thought-out and consistently pursued validation will bring you forward. Step by step you collect your individual data. With this data, your business plan will almost write itself. And even your pitch deck is no longer a problem, because you can prove from your own experience who your target group is, how many customers you were able to acquire, how time-consuming it was, which channels worked, and so on. You see: YODA is what counts in the end – Your own Data.
Author: Tim Lampe
Tim Lampe is Head of Operations at Campus Founders and, together with his team, develops the offerings and teaching formats that holistically accompany startup teams on their entrepreneurial journey. Prior to Campus Founders, he was involved in several startups in consulting, SaaS, education and co-living and also spent a year in Silicon Valley.