Market validation: a case study
Here’s a case study on market validation.
It’s the story of how I spent the last year.
I’m not an expert. But I can share a look at the messy, lengthy process of validating both a problem and a solution.
I started Scalepath.io because I saw a market problem. It is way too painful and expensive for B2B companies to size their market and identify their best growth opportunities. Companies may do it for the board or investors, but it rarely impacts strategy and growth like it could.
I validated the “problem” half of the market was experiencing by going through it myself — having former colleagues ask me to help with it at their new companies, talking to dozens of people, and putting out some free tools to help others with the problem. I knew how powerful it was to get this right, but existing tools and processes didn’t measure up.
But I didn’t have a valid “solution” yet. I didn’t have what Peter Thiel claims is the formula for building a successful startup: a way to be 10 times better than the second-best solution.
I’d been consulting for the past year, learning with each new client, and delivering some great results. (Consulting, by the way, is a fantastic way to validate a market, but that’s a topic for another post.)
I delivered solutions. I was proud of my work.
..but 10X better?
I explored bundling up the data I used, a few key frameworks my projects followed, and some training. This would cut days or weeks off of the process. And it would be easy to build.
But everyone I spoke with told me they’d rather simply hire a consultant. It also didn’t pass the “10X better” test.
Knowing the problem is real, I kept iterating on the solution.
After more projects, patterns emerged.
If I’m using the same massive data sets, the same process, the same few frameworks for each client: can’t we build software to solve 80% of the use cases?
I put together a mockup of the UI based on what I know we could do and started showing potential users. It turns out I can do way more with software than I ever could with spreadsheets.
The conversations were completely different than the first two solutions.
It’s at least 10X better than any other alternative.
I also changed how I pitched my consulting, only providing what would be in the software (doing a few projects manually). Clients paid. More validation.
Market validation is never finished, but it’s absolutely critical in the early days to avoid burning time and cash on something nobody wants.