How to Validate a Business Idea on a Budget

I've talked founders out of millions of dollars of software. Here's why I consider it to be part of my job. Many first-time founders fall into this same trap:   They have an interesting idea for a product,  They never validate that idea in any way, But they develop the solution anyhow, Blow through all their resources, And then ultimately discover, they should have taken a completely  different  angle. → Before diving into months of design and development  and investing tens of thousands of dollars, do this: 1. Validate your idea:    ↳ Ensure there’s a demand for what you’re building.   ↳ Talk to any potential customers.    ↳ Understand their problems.       2. Ask these magic product questions:    ↳ Can I 'simulate' my app with off-the-shelf tools and elbow grease?   ↳ Is there something I could white-label as a proof of concept?    ↳ If I had to make this product today, how would I do it?   ↳ Would a clickable prototype be a better first step?       3. Start selling early:    ↳ Offer a basic version of your service.    ↳ It doesn’t need to be perfect.    ↳ Try and get paid for it.    ↳ Feedback is gold.      Getting right to building might seem like the obvious action, but be careful;  it's often a Trojan Horse to inaction. It can make you hit pause on getting answers to some very important questions,  and delay other aspects of launching your business, Skip the coding marathon → Start the customer validation sprint! 🚀 P.S. I only write this because I've made the mistake myself (repeatedly). Has this ever happened to you? 😬

The biggest mistake I made building my first startup was falling in love with my own idea. It cost me $10K and 1.5 years. Here's how to avoid building something nobody wants to pay for 👇 My co-founder and I spent 1.5 years and $15K of our own money building a job review platform for minorities. Our goal was to create a Glassdoor for us. At the time, I thought that this was something that just had to exist. If we build it, they'll come. Wrong. After 1.5 years, we had to face reality: - 1 paying customer - $400 MRR - 1500 job-seekers but 0 willing to pay Neither businesses nor job-seekers would PAY for our platform. They appreciated it, but no one would open their checkbook. Then something unexpected happened. A friend reached out asking if we could help with their ERGs. They had $35K to spend - almost 10x more than we'd ever made working on the job review platform. We pivoted, and within a month of launching as Chezie, we had a 5-figure contract. If I were to start a new company, here's how I'd approach building product: 1. Start with customer pain Talk to 20+ potential customers. My favorite questions to ask: • How are you solving that problem today? • Have you looked for a better solution recently? 2. Validate willingness to pay by SELLING (Most important) Here's what I learned after 300+ customer calls: "I love this idea" = worthless "When can I buy?" = close, but we can do better "Here's my credit card" = validation You have to ask people to pay for your solution. That’s the only validation that matters. Best case? They buy on the spot. Worst case? They end the call and block you. Either way, you get feedback that helps you understand if you're on the right path. You have to ask people to pay for it early. Words are nice, but a Stripe payment is much better. (Check out Rob Snyder's content for how to find demand by selling) --- Don't make the same mistake I did. Focus on learning about your customers first. Building the product becomes way easier when you know exactly what pain you're solving and how much people will pay to fix it. How do you think about building product? P.S. - Want the exact framework I use to validate ideas by selling? I wrote about it in my Equity Shift newsletter. Click "Visit my store" at the top of this post to subscribe for free and read the full guide 🤝🏾

Last week I had the pleasure of speaking at Yale School of Management on validating startup ideas. New concepts easier than ever to prototype and research before making a big investment, so for most ideas there's no reason to sink 💰💰💰 into building a product without validation. Here are some of the tools and techniques I covered: 1. Email. It's been around forever, it's ubiquitous, and it's incredibly powerful. Even after ~30 years, email is still the strongest and most under-appreciated marketing tool out there, and many products start out as email newsletters - just look at what we're doing over at Thesis Driven! 2. Services. Even if you don't want to be in the services business long-term, doing paid work for prospective clients is a great way to learn about an industry and validate a concept. Don't be afraid of making money! 3. Events. Want to start a niche job board but don't know where to start? Host a job fair! Virtual or in-person, events can be a great way to validate a new concept and get live feedback on your idea. 4. Strategic Partnerships. Building your product for a specific client or partner is a great way to ensure you're addressing a real need - and often getting paid for it. But be careful you don't lock yourself into an exclusive relationship or give your pilot client too much power. 5. No-code tools. No-code tools have proliferated and improved dramatically over the past year. I'm personally a fan of Bubble; it's easy to use and very powerful. In fact, the Thesis Driven Developer Database is a Bubble app! 6. Social Media. YouTube, LinkedIn, X, Instagram, and TikTok all provide unique opportunities to build audiences and validate ideas before And the most important point: Mix and match! None of these methods are meant to be used standalone - the real power comes from combining them to create compounding feedback loops and build monetizable audiences. Big thank you to Jennifer McFadden for hosting me at Yale SOM this week! (She said my slides were the ugliest she's ever seen, which is high praise!)