At what point do you know that your idea has been validated?
I've got my landing page and I'm gonna start trying to get some leads on it soon. I'm wondering, at what point can you say it's enough? This is for investors mostly, by the way. Thanks!
edit: forgot to mention, I'm looking for signups. I don't really have a way of making a pre-purchase sort of thing.
Investors invest in you when YOU CAN HELP THEM MAKE MONEY. The only way you can help them return more than TRUMP's stock rally and 2x or 3x to account for security, in 2 years.
Investors don't help you launch. They take the cake after the launch.
Investors don't validate. They reason from emotion and then after they have decided to invest they do due diligence. But that due diligence is not to validate the proposition but to ensure there is nothing untoward or dodgy about the cap table, agreements or liabilities of the company.
If an investor is still on the fence about your business proposition, and is waiting for validation, then they will not invest, ever. They are just using you to learn something about your market or strategy.
No one really knows that answer, I believe there are several validations a startup have to do at different stages and different kinds.
When you collect a lot of emails on a landing page, that's a problem+ market validation (incomplete), but not a product/ solution one.
As a startup you have to aim for one big validation, which is product market fit. When you achieve that, then you have leverage. Then you try keep going until you start noticing that you’re no longer pushing your product to the market but rather the market place is pulling it out of you.
People want access, geographical location want you to launch in their place, demographics want to use it even though you’re not targeting them yet, businesses want it even though it’s consumers only etc. That point is called product market fit or PMF.
But it all starts with getting 3 people to pay you within 48 hours and then continuing to iterate your product and go back to them and then iterate again and so on until they absolutely love it.
1 note: inevitable someone will make a big deal out of this 3 customers in 48hrs to boost their ego. It’s obv not carved in stone. It’s merely a useful guideline to incentivize speed and avoid the biggest risk when starting. Namely, that you optimize for false positives. You keep building and building, wasting months (or years) and hundreds of thousands of dollars, creating something no one wants because you erroneously believe that people will buy it at some point. By doing it this way, you’ll get false negatives (kill an idea that might’ve worked) but if you make some money quickly, there’s a higher probability that you’re onto something and that you’re addressing a real problem/need the marketplace has.
Question asked by
May 7, 2020, 11:58:56 AM
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How to turn an interest into a money maker. How to attract people, how to stimulate people to pay, how to make profit, how to make relations, how to keep relations.
How much do I have to give my audience so they can pay me something in return? What do they value? what problem do they search for answers on your own? I want to solve that problem.
Brand means name recognition. A lot of people knows what your company does and what you stand for. Brand is result of long campaign of consistent value provision and media cultivation. Brand helps a company reduce marketing cost.
Whether there are buyer willing to pay or not. For that to happen you must provide extreme value. The entire startup process would be based on guess before the validation. Validation happens in a market, not on the street.
Value is what you give customers beyond the price you charge. Value is effective solution to a problem. The price your customer pays reflects whether the problem is big for them and whether your solution is uniquely effective. Value stems from quality and detailed work.
Marketing means bring your product to the market and bring your message to your customer. Marketing is not salesmanship. Marketing is to penetrate the world of commerce through many barriers and existing networks.
Minimally viable business, or MVC, minimally viable company. A company that scrapes by, full of guess and hope and no traction and sales. When you give your customers things for free they all take it. But they never pay and you can never rent a table at the market.
Minimal viable product. A full artifact of a real product. Something that works ALL THE TIME. You can demonstrate the real effect on real people - not to sell hope. The MVP may not have certain non-essential bells and whistles, but it needs to have appeal value.
Customer is king
A business lives at the mercy of its customers. You provide your customers 10 dollars worth of value and they pay you 1 dollar, not knowing that your company only costs 99 cents to provide the item. The value is not the item - the value is what is attached to the item.
Company culture is based on a company making money. Once your workers are paid, they need to have a mission and aspiration so they are not bored everyday and make trouble in the work place.
A company valuation is cash investment divided by the percentage. As long as your story is good, the valuation will keep coming, and the investors will keeping falling into the line.
Return on investment
Investors are either behind family fortune (never work with them) or for rich clients as investment vehicle. Both need returns 2-3 times better than stock market darlings.
Having found what people want, not just what people may need. Your offering and their acceptance is sure, no longer a guess. You can provide it for profit, and you can indeed making living on it. Traction is sometimes called validation. You are no longer a theater. You have touched nature, and found cash vein.