How to (In)validate Your Startup Idea

http://blog.wepay.com/blog/2010/12/17/how-to-invalidate-your-startup-idea/

by sophmonroe • 16 years ago

115 63 16 years ago

blog.wepay.com

lhnn• 16 years ago

These are interesting ideas. I'd like to hear from any founders who have used any of these methods, and to what extent they were beneficial in gauging the eventual level of success of an idea.

withoutfriction• 16 years ago

I agree. And on that topic, what are some hair on fire problems that you have or have thought others might have?

kirinkalia• 16 years ago

This piece succeeds because it spells the steps out clearly and tells you there are three very big counter-examples. So if you're trying to change the way people spend time and/or communicate, how do you get validation?

kqueue• 16 years ago

This is exactly what mark zuckerberg did. [sarcasm]

IMHO, you invalidate an idea after you implement it and see the user's reactions. Before then, you cannot know if it will succeed or not.

aberman8• 16 years ago

I named fb as a counterexample. I think you can definitely succeed without validating or invalidating your idea first, but it's a much bigger risk, and you are building a very specific kind of company. How many facebooks and twitters are there in the world?

shubber• 16 years ago

Which is great if you can implement the idea in a weekend. Much harder if it'll take 2 years to build before you can see if the time was worth spending.

alain94040• 16 years ago

I fully agree with the article, however, when I think of most the big successes of the last 10 years, they all fall in the exception category.

What does that tell me? Would that have worked for twitter? No. For Google search? Barely. For Facebook? Probably not. GroupOn? Probably.

krschultz• 16 years ago

You probably could have done this with Google search.

Would you love to replace the super slow inaccurate search you are using now with one that delivered accurate results in 1/10th of the time?

brlewis2• 16 years ago

[1999] Sure, but I'll believe it when I see it. Look, I've already tried about 10 different search engines, and even with the best of them (altavista) you count on having to click through a few results pages to find what you want. Web servers aren't psychic, you know. You get out what you put into it. There are already a lot of smart, well-funded companies working on this, so good luck.

People who Knew Search back then knew that tedium was part of the bargain, just like people who Know photo sharing today know that tedious sorting/tagging is inevitable if you shoot a lot.

EGreg3• 16 years ago

Perhaps you shouldn't just implement ideas, you should implement technologies. And carefully map out your user flows. And then you should make sure that each conversion step actually converts in the real world.

dlo• 16 years ago

A shot in the dark will sometimes hit something. This doesn't make shooting in the dark a viable strategy.

auston• 16 years ago

You guys should work on formatting your posts, bold list titles or italicize or underline - I am too lazy to read everything, I want to skim before I decide to read.

aberman8• 16 years ago

I agree. I need to be more disciplined about that...

riffer• 16 years ago

http://summarity.com/bookmarklet_front

vog• 16 years ago

That's a great idea and a nice tool. However, I personally found the resulting summary not very useful.

emiller829• 16 years ago

I'm not sure I'd want to take any advice that suggests starting off a business relationship by lying to the potential customer.

(Re: "Identify your target customer. COLD email 20 of them and offer to pay THEM to use your product if they are willing to offer some feedback. See how many respond. If anybody responds, tell them that the offer is oversubscribed and that it is no longer available. See how many of those people still ask about the product.")

steveklabnik2• 16 years ago

Dry testing has always been controversial, it seems.

daemon• 16 years ago

I'd imagine that merely asking the potential users if they'd buy now, if it were available, would serve the same purpose.

brlewis2• 16 years ago

Lying to potential customers is cheap in terms of development time, but costly in terms of reputation.

edw5196• 16 years ago

If anybody responds, tell them that the offer is oversubscribed and that it is no longer available.

Wow!

A company built to handle other people's money that recommends deception. What's wrong with this picture?

aberman8• 16 years ago

I think you are being a little melodramatic. This is to vet an idea, not a sustainable way to build a business. I even said that it could/should be more of a thought experiment. And besides, I'm not recommending that you maliciously and deleteriously deceive people.

pg on naughtiness: "Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They're not goody-two-shoes good. Morally they care about getting the big questions right but not about observing proprieties. That's why I'd use the word "naughty" rather than evil. They delight in breaking rules--but not rules that matter. This quality may be redundant, though; it may be implied by imagination."

edw5196• 16 years ago

Sorry to say, Rich, that was not the response I expected.

AFAIC, there is no gray area here. I have argued (yes, many have disagreed with me) the same for years here.

A little background...

I have seen more deals than you can imagine ruined because someone lost trust. As simple as that. The salesman fibbing to his wife on the phone in front of the customer. The contractor paying the 3rd party vendor a little extra to get his customer's deal. I even saw someone lose a million dollar deal because he took his customer for a ride in his leased car with the speedometer disconnected.

And the reasoning was always the same: "If he could do this little thing to someone else, what will he do with my big deal?"

It's not a matter of what is effective. It's a matter of what's right and wrong. For many people (me included, of course), there is no gray area.

I realize that jaywalking != murder, but deception in business tactics is always a big deal. When one has little more than your reputation to judge, all data that affects that reputation is fair game.

I was disappointed with the original post. Calling deception "a little melodramatic" and citing a pg naughtiness quote as an excuse leaves me more disappointed than ever.

sdizdar• 16 years ago

COLD email 20 of them and offer to pay THEM to use your product if they are willing to offer some feedback.

If anybody responds, tell them that the offer is oversubscribed and that it is no longer available.

I wonder what is wrong with saying just "Hi, I would like to get feedback about project X.". Would that way have the same affect?

I'm asking that just becasue I try to follow an old proverb (not sure if translation to English is correct): if you have a smallest doubt about whether to lie or not, don't lie.

(no, I'm not good with the above rule, but at least helped me while dating and now in marriage)

EGreg3• 16 years ago

I somehow knew this would touch off a firestorm.

Come on, lots of people measure people's interest in ways where they go to some page or do an action and nothing is there.

True, after that, those people probably won't trust you unless they have a good reason to. But in the end of the day, you didn't really harm them and there are many more people.

Look I'm not saying it's not lying. I'm saying that there are worse things in the world than sending 20 people to a page to gage their interest.

richcollins2• 16 years ago

In addition, I don't think that it is as effective as telling them that it isn't ready yet and asking them for an email to let them know when it comes out.

If they risk providing their email for a product that isn't even ready yet, it shows stronger interest than for a product that they think that they will be able to use right away.

Qz• 16 years ago

If these recommendations are too extreme, treat them as a thought experiment. Just don’t lie to yourself.

rdl• 16 years ago

I think it's especially telling that he defaults to deception in a case where the more honest, transparent, and honorable action is both obvious and more personally beneficial to everyone involved.

Using advertising and pre sales contacts to determine demand and design a product is quite reasonable (and standard; the innovation is that self-service AdWords makes it a command-line process vs. a formal effort), but the respondents are your first, best, and potentially most loyal customers, so screwing them even a little right off the bat is bad for a lot of reasons.

When the game theoretic amoral behavior and the "conventional, moral" behavior tend to converge, it's probably the correct choice.

cranbell127• 16 years ago

No thanks. Lies are a bad business model and a worse life model. Makes one think wepay.com's sense of ethics all boil down to whether it makes them money or not.

aberman8• 16 years ago

um, the business model I recommend is building products that solve real problems and charging people a fair price to use it.

Testing ideas has nothing to do with determining a business model. Not sure how this relates to WePay's ethics or whether it makes us money or not. Bizarre.

prodigal_erik• 16 years ago

> Testing ideas has nothing to do with determining a business model

Your business model includes how you're going to cover the costs of market research. This answer boils down to "we're going to trick people into doing it involuntarily for no compensation, throwing chaff into the marketplace as a negative externality", whether or not they think of it that way. Dry testing is just a step short of fraud, and I for one won't deal with anyone who has ever been caught doing it.

rokhayakebe• 16 years ago

To everyone who has a problem with tell them that the offer is oversubscribed, you do not have to take one sentence and turn it into a huge deal. If that is what the author wants to say, then so be it, just suggest something better and that may work.

isomorph2• 16 years ago

regarding the lying:

didn't bill gates lie to ibm when they were looking for an OS and say he had one (and then bought qdos and hacked it into dos)?

think of what a boon microsoft has been to the world (i'm only half facetious)

from a utilitarian - the only nonreligious, rational morality? - perspective...

philwelch2• 16 years ago

Utilitarianism isn't the only nonreligious, rational perspective on morality.

Actually, there aren't any purely rational perspectives on morality, as they all seem to hinge on preserving some intuition or another. But in terms of logically consistent, secular ethical frameworks which produce results most of us are comfortable with, utilitarianism isn't the only one on the list. And there are actually points where utilitarianism might end up producing results people aren't comfortable with (such as kidnapping people and killing them for their organs).

isomorph2• 16 years ago

point taken

evgeny0• 16 years ago

Instead of saying "the solution to problem X will actually be available TONIGHT at www.[startupname]ly.com" couldn't you say "the solution to problem X will be available SOON/LATER/NEXT YEAR at www.[startupname]ly.com. Pre-register so we can let you know when it is" ? First, you wouldn't be deceiving anyone. Second, wouldn't it be an even better indication of interest if people are willing to wait for the product?

How to (In)validate Your Startup Idea

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