How Validating Your Business Idea Can Make Or Break Your Startup

Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats. — Howard Aiken

(This post is part of a series covering the Eight Stages of Solopreneurship. Link to the previous post, A Simple Way to Search For Your First Business Ideas)

A few years ago, I was the executive director for a local nonprofit here in Eugene, Oregon. Our mission was to support solopreneurs and entrepreneurs starting and growing businesses throughout the state. Our small team met with hundreds of entrepreneurs each year helping them to go to the next level with their business. The questions, the problems, and the dreams all became routine patterns and problem-solving exercises that we would see day in day out. Our relationships with our clients often began early in their journey into business with the discovery of a business idea.

We learned as much from them as they did from us at this early stage. We learned that business ideas can be seductive and stir strong emotions, easily obliterating objectivity. We also learned that solopreneurs do not often reality test their ideas because of the strong affinity they feel towards them. We met many aspiring solopreneurs willing to easily part with their money (and someone else’s money) on untested business ideas because they had totally convinced themselves their idea had merit.

Sadly, these situations do not end well.

The Validation Stage

It does not have to be that way. The business idea can be treated as an experiment and tested to see if it meets certain favorable conditions. Success in the validation stage is to determine of whether or not a business idea is viable. By viable I mean that a solopreneur has determined that a business idea has a very reasonable chance of becoming self-sustaining as supported by the facts collected.

Choosing a business idea that fits you and the marketplace is the critical decision the defines success at this stage. Implementing a poor idea will break your business, implementing a good business idea can be the ticket to success.

Putting your time and money into your business idea is an investment if you have demonstrated that it is an opportunity. Putting time and money into an unproven business idea is a waste. The process of validating a business idea can save both time and money by quickly abandoning unprofitable business ideas and zeroing in on good ones.

Remember, poor ideas fall apart quickly in the light of objective facts and market feedback; while good ideas are more resilient. At this stage, your task is to separate what glitters from the gold.

Stage Objective

The objective of testing a business the idea is to determine through fact-finding if there is sufficiently large, interested, and paying customer base that can sustain the business.

Stage Entry and Exit Points

The aspiring solopreneur discovers a potential business idea (value exchange) and ends with the decision to start a new business.

Challenges Encountered in the Validation Stage

Rookie solopreneurs fall to many common pitfalls at this stage, and most are errors of judgment in the decision to start a business. Inexperience leads to hasty decisions while emotions color perceptions. Below I will describe some common pitfalls I encounter that lead solopreneurs to skip validating their business idea.

“Everyone will love it!”

A frequent mistake is skipping the evaluation of a business idea altogether. The solopreneur is convinced of the product or service in mind, and they believe the customer will think the same way. I often hear aspiring solopreneurs say “Everyone will love it!”, to express this belief.

The underlying error here is in assuming that the customer sees the product or service in the same way as the solopreneur sees it. More often than not, the customer has a completely different perspective on the product or service than the solopreneur.

Think of a quarter for a moment. To you, a quarter looks like what you see on the heads side. To the customer, a quarter is what they see on the tails side. Two very different perceptions of the same quarter!

The two sides of the quarter represent what each party “sees” in the product. Thus, assuming every customer will see your product in the very same way you do can be a fatal mistake!

To avoid the “build it and they will come” trap, dial down your emotions and start looking at the situation with some skepticism. Is there evidence that there are customers interested in your idea? Have you talked to them? Can you see your product or service from their perspective?

“I’m passionate about my idea!”

I have never met anyone who started a business and thought their idea would fail. In most cases, the possibility of failure had never crossed their mind. They believed that their passion was all they needed to succeed. They could figure out the rest later.

While passion is essential for long term motivation, it does little to shed light on the realities of the marketplace.

An objective evaluation of your idea is essential to help you detach emotionally and avoid this trap. You must be able to gather facts and insights to see how your potential customer will respond to your idea, how competitors might respond to it, and whether your idea can generate profit. An effective way to do this is to seek facts that will quickly disprove your idea. This opens up your perception to new possibilities, including that your idea simply won’t work.

“Hard work will lead to my success.”

There are over 20 skill domains that a solopreneur might use in operating a business, the technical skills to produce a product or services is just part of them. Skills like accounting, marketing, selling, legal, technical and so forth are also required. Most solopreneurs start with just a few skills mostly in the technical domain. This puts them at a serious disadvantage in evaluating their business idea and starting a business. Left unresolved, these skill gaps can ultimately doom a business.

Early business education is critical to testing a business idea. The solopreneur must be able to decide if a business idea has merit and to do so means looking at marketing, industry and financial information. Later on, the solopreneur must have the specific business skills to match the marketing, core operations and support processes that make up their proposed business. It is critical that solopreneurs engage in early in business education through classes, mentors, advisers and so forth.

“Someone might steal my idea.”

I will often meet solopreneurs that have a burning business idea, but they are too afraid to talk to anyone about it. It is easy, they say, for someone to steal their idea. They end up talking about their ideas in vague generalities to avoid giving away information that might lead to someone copying their idea.

Locking down your idea robs you of the vital feedback you need to validate your idea. Business ideas that have not been tested with customers, market stakeholders, mentors or advisers, will be very rough, fuzzy and unrefined. They tend to fall apart easily under scrutiny.

Most good business ideas do not start as complete ideas but as partial ones. These business ideas evolve as the solopreneur molds, stretches, alters and validates them through customer feedback and market insights.

None of that can happen if your business idea is left unchanged in your head. Determine the key theories that your idea rests on and test those theories to determine whether or not they are true. Testing your ideas give you an opportunity to do this without giving away the secret sauce.

“I don’t have the time or money to start a business.”

Two of the scarcest resources you possess are time and money. You never want to give them away or waste them. Creating new products and services can burn up hundreds and hundreds of hours and thousands and thousands of dollars. I have seen countless solopreneurs lose both time and money on ideas that never had a prayer. It is wasteful and can be emotionally damaging.

I mentioned above the notion of quick testing your idea. The goal of quick testing is to validate your idea using the least amount of time and money possible. Quick testing can be done in a few hours or a few days. Once you know that conditions surrounding your business idea are looking favorable, you can take a deeper dive into your idea to help you make a final decision about moving forward.

“I need money now!”

These days is not hard to find people that have been economically displaced. A sudden loss of a job or the slow frustration of never getting ahead can quickly get one to thinking that maybe starting a business is the financial answer.

There are several reasons to avoid starting a business when strapped for cash. First, solopreneurs that are desperate for cash will rush to start a business. Desperation is a strong emotion that drives people to action. Any action. The need for money is strong, and that leads to rash decision making. When your primary goal is money, evaluating your business idea can seem like a luxury.

Second, startups take some time to throw off excess cash that can be used for a paycheck. In the best case, it can take several months. In the worst case, it can take a year or longer. Solopreneurs needing cash need it now, not six months from now. I have seen many solopreneurs take all the cash that landed in their bank accounts to pay their personal bills while leaving their startups dry. As the saying goes, cash is the lifeblood of business. Without it, it dies.

If you need money now or in the next few months, don’t look to start a business. Stabilize your situation any way you can and then come back later and evaluate your idea objectively and give your startup the time it needs to get financially healthy.

“I’m busy!”

I love seeing solopreneurs take action. It is amazing how many people believe you have to think your way into a business. Entrepreneurship is action sport, and you learn through the actions you take. Those actions will yield an outcome, positive or negative. Slowly, over time, you learn what actions create certain outcomes.

That said, aspiring solopreneurs that are too busy too learn are the first ones to crash and burn. Their business never gains traction as the solopreneur is constantly “spinning their wheels”.

The key is to balance learning with action. Your focus should be on outcomes and determine if your actions are causing the outcomes you’re seeking.

Test Before You Invest In Your Business Idea

The decision to start a business should never be taken hastily or lightly. One of the best uses of time and money early on is to test an idea to see if it is up to snuff. While the business idea is part perception and part imagination, testing the value exchange happens in the real world, and it requires the right mindset. It is through gathering the right information that you can make a sound decision to move forward.

In the next posts in this series, I will cover several ways to test your business idea.

Originally published at

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.