Validation Stage of an Idea

Recently I found myself engaging with friends and family on the topic of launching a startup. As I listened to them pitch business ideas, I noticed a trend relating to the challenges of market validation. How do you know if your idea is a good fit? This “validation” stage enticed me to think about value hypothesis and how it affects launching a successful venture.

First let’s talk about the main reason companies fail. There can be many reasons why companies fail. But most failures are a result of a company producing products or services for consumers who don’t buy them. Or what is better known as a lack of product market fit. According to “Demystifying Venture Capital Economics” by Andy Rachleff, product fit needs to be attained before scaling or attempting to take on a leadership role in the market. It is imperative to the survival of a startup to conduct a series of experiments to validate the idea.

The idea of launching a business is sexy. The idea of being a successful entrepreneur is even sexier. But, in the trenches are where strong businesses survive and thrive.

Cole Christie gives great pointers on how to spot opportunities when observing your surroundings. Practicing being observant is a key component to find and validated product fit. To know if you have found a fit, there should be no hesitations when responding to these questions:

What are you building and for who?

What market are you going after and how will you be successful?

How do you distinguish yourself from competitors?

How can you demonstrate that your product will have a leadership role in the market?

Validation can take on the form of conducting surveys, talking to customers and suppliers, and financial modeling. The grunt work can help take out the guesswork. Most importantly, if there is no demand for your idea, the validation stage can help entrepreneurs pivot before it’s too late.

Think you’ve found a fit? Let us know here. Checks range from $25-$50k.