Starting a full blown company is a scary endeavour… that’s why I’ve always started very small. My approach is very iterative. At each step I’m trying to prove if there’s a “there, there.” Or better yet, “Will the dog hunt?”, “Does anyone want this?” I also start off with a few contradictory assumptions:
There are 2 or 3 other teams in the world working on this idea right now.
Anyone who thinks their idea is unique, has never been thought of, etc. are delusional. What I’ve learned to be true over the years building technology companies is that if there’s a market opportunity based on some unique trends, it’s likely there are 2-3 other teams working on the same problem at that moment. My job is to learn faster than them. It’s why I’ve been such a proponent of the “Lean Startup.” It’s not about being first, it’s about moving faster.
I’m probably wrong.
This doesn’t mean the business opportunity is bad, it just means that I’m probably wrong about many of the aspects of how it’ll work – if it’s successful. This could mean the distribution model, business model or the solution itself will need to be tweaked. That being said, I may believe I’m off on certain parts of the business, but I still move forward with conviction. Let’s not forget that to have a hockey stick chart of growth requires a long flat part before it. I learned this with Flowtown (header image).
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So here’s my step by step approach to validating your startup idea:
1. Call it a project
I call it a project because it helps me think about the amount of time & money I invest into it. It also lets me share it with the world without the pressure of having to pursue it. There’s no need to quit your job and jump in 100% full time just yet. Instead, start small and prove it out.
2. Give it a name
Your brain can not process a new concept without a label. It’s how we learn and store information. So having a name is super important. The good news is that it can change. Just use a short, high energy word that can quickly remind you of the problem you’re solving. Don’t worry if someone else is already using it, because you can always change it. Don’t spend too much time on a name, most of the time it’s just a placeholder.
3. Sell something
Once you know what the business does and you have a name, the next step is to quickly move to trying to sell it. Even if you have nothing. You don’t need a web page, product or actual solution, you just need to find a potential customer and sell them something. I’ve done this by cold calling, going to the mall and stopping people, walking business to business asking for the manager, etc. The key is to get them to identify with the problem, agree with your solution (offering, price, implementation) and give you money. Even if it’s a $1, that works. Try to sell to at least 10 customers before moving to the next stage.
4. Convince someone else to join
If I get past the first 3 steps, then the next big milestone is to find someone to help. Even if you can do it all by yourself, try and convince someone else to join you. It’s a great way to further validate the idea. It’s why many investors like startups who have co-founders. It’s a signal that you were at least able to convince others that your crazy idea has merit, and it’s just a great way to build a startup either way. It’s too easy to build in isolation, thinking all of your ideas are great. Having someone to keep you grounded is invaluable.
5. Set a goal that will inspire you
If I’m able to find customers to buy and have convinced someone else to join, then I start thinking about setting a goal 5 years out that will inspire me each day to move things forward. Building a company is like pushing a boulder uphill, so without a goal, it would be too easy to give up and let the boulder roll down to the bottom. You don’t want to set an impossible goal, but define one that seems a little aggressive, but plausible based on the information you have.
6. Live 6 months into the future
You may of heard “fake it till you make it”, but I prefer to call it “living 6 months into the future.” At this point in the startup, all of my thoughts, actions and decisions are being made with a vision of where we will be in 6 months. When I share my thoughts on product, customer segments, team size, etc, it’s all done through the filter of where we’ll be in 6 months. Doing so helps give early customers, team members and potential investors a clear picture of where you’re going. “Whatever the mind of man can conceive and believe, it can achieve.” ~Napolean Hill
7. Fall in love with the problem, not your solution
No one cares about your solution. They only care about their problem. Reminding yourself what problem you set out to solve will help you release your current solution and how well you’re solving the problem. Many companies fail because they fall in love with the solution (technology) not the problem (what customers care about). Diving deep into the problem, almost becoming a student of it, will help you build a great company. Customer empathy is one of the most valuable traits of a great founder.
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The steps above provide a high-level framework to start and grow a startup, but you’re always allowed to stop at any phase. Even though I’ve started 5 companies in my career, I probably own 30+ domains for projects that I’ve started. There are many reasons they didn’t become commercial successes, but with each one, I followed every step mentioned above and learned a lot about the market.
If you have questions about these steps or want examples from my life on how I’ve thought through each one, leave a comment below.
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