So you’ve got a brilliant startup idea that you’re obsessed about. I’m going to show you how you can test it in a weekend without spending any money or finding a technical co-founder. This is going to save you from spending lots of time and money on a problem and solution you haven’t validated. I’ve learned all this by testing my own startup ideas and attending events like Startup Weekend and Lean Startup Machine (LSM).
What’s the problem?
First, you need to understand the problem. What problem are you solving with your startup idea? Write it down. Soon, we will test if people really have this problem. Is it important to them? Does it bother them so much that they’re already trying to solve it themselves?Â
Example problem hypothesis: Sports fans that watch a lot of live sports don’t have a way to be more engaged or share their experience.
What’s your solution?
Write it down. See the pattern here?
Example solution hypothesis: A cross platform app to gamify the experience of watching a live sporting event.
Document your assumptions
Spend some time thinking about the assumptions you’ve made in order for your idea to work. It doesn’t need to be an exhaustive list because you just need to focus on the riskiest one.
Example assumptions:
- All sports fans want to be more engaged *RISKIEST
- People want to interact with random people during sports events
- People are going to use a mobile app during a sports event
- People are interested in obtaining additional information during a sports event
Talk to people
Now that you’ve got your problem, solution, and assumptions written down, it’s time to go out there and talk to people. Simply talking to people is the easiest way to validate your problem and solution, which Ash Maurya calls problem/solution fit. Pick up the phone and call people in your network that are part of your target market. If you don’t have target customers in your immediate network, then you have to get creative to find these people. Ask for connections or hit the streets and go to where your customer hangs out. At LSM, we called our friends who liked sports and we went to sports bars to talk to people.
When you get these people on the phone or in person, just have a casual conversation about the problem domain. Make sure you come up with a short list of questions to get the conversation started and then it will just take its natural path. It’s not an interview, it’s a conversation, so you’ll just improvise along the way. Your customer will give you a golden nugget and you can just keep going deeper and deeper.
Be careful not to sound selling or convincing. The goal here is to get customer feedback to pivot to a problem/solution that customers actually care about. Keep talking to people until you’re not learning anything new. Once you’re done, come back to the office and revise your problem and solution hypothesis based on what you learned. Take a look at your assumptions and mark them as valid or invalid. Keep repeating this process until customers are strongly identifying with the problem/solution and they’re ready to pay you. We’ll cover that shortly.
This process of talking to customers and changing your hypotheses is known as a pivot in the startup community. In his Lean Startup book, Eric Ries defines a pivot as a change in strategy without a change in vision. At LSM, after our first round of talking to customers, the result was a zoom-in pivot (see the list of pivot types). We learned that people who liked hockey and basketball weren’t interested in our app because they just wanted to pay attention to the game. However, the football fans we talked to said there’s a lot of downtime in a football game, and they’d like to fill that downtime using our app. So instead of targeting all sports, we zoomed in to just NFL fans. Great, we’re learning and making progress without spending a dime!
Side note: Don’t think that spending any money here will get you any further. You don’t need PPC ads, logo design, or even a domain yet. Spending money at this stage means you’re committing to something, and you’re not ready yet, because you might be wrong about the problem and/or solution. Both are going to change several times as you have conversations with customers.
New problem hypothesis: NFL fans that watch a lot of live NFL don’t have a way to be more engaged or share their experience. New solution hypothesis: A cross platform app to gamify the experience of watching an NFL game.
Success metrics
Once you get to a problem/solution hypothesis where customers are strongly identifying with it and they’re saying they’re interested, you have one very important task to complete before you can say you’ve reached problem/solution fit.
You have to get them to give you some currency, which can be money or data. Find a new customer, ask a few qualifying questions to make sure they’re in your target market, quickly set up some context by saying you’re working on a business idea and you want to get some feedback, tell them about the product, show them your product mockups, and then ask for money, but use the two promises approach.
First, promise them the software will be ready by a certain date or they’ll get a refund. Second, promise them a credit for your services. It’s important not to offer a discount, because that lowers your perceived value; a credit is okay though. Set up a goal for how many qualified people you want to talk to you (eg 50 people) and set a benchmark for success (eg 80% or 40 people). If you’re able to hit the benchmark, then you’ve reached problem/solution fit and it’s time for the next phase: solution-launch fit. That phase is outside the scope of this article, but there are some resources below to take you to the next step.
If you have a product where you’re not charging your customers (eg a social network), then the currency you’re looking for is data. If we weren’t charging for our app at LSM, then we could’ve asked our customers to give their email address and the email addresses of five friends they plan on playing the game with. That’s a big enough hoop that the customer is jumping through to prove that they’re actually interested in your product and not just being polite by saying, “yea, I’d use it.” The whole point of asking for currency before your product is built is to ensure you’re building something people actually want.
tl;dr
- Record problem hypothesis
- Record solution hypothesis
- Document assumptions and highlight the riskiest one
- Have a conversation with a few potential customers to validate or invalidate your riskiest assumption
- Repeat 1-4; use your learnings from those conversations to create a new problem and solution hypothesis and test your new riskiest assumption until customers start paying you
Next steps/recommended resources
- Running Lean by Ash Maurya, a tactical manual for the three stages of a lean startup: product/solution fit, solution/launch fit, and product/market fit. Strongly recommended.
- Lean Startup Machine, an intense, four day event that where you will go through the process described in this post. The emphasis of this event is on problem/solution fit. Strongly recommended.
- The Lean Startup by Eric Ries, the encyclopedia of the lean methodology.
- Startup Weekend, I find these events are more hackathons than anything. A weekend should be spent validating your idea with customers rather than spending money and time on a product without talking to anyone. Still a good event if you want to network or if you’re craving to work on a new idea.