"How do I validate my idea?" is one of the top questions Kyle and I get on our podcast: Product People. Based on the interviews we've done, and my own experience, I'd like outline what I've seen work, and what hasn't.
Let's start with what doesn't work. These are some of the common traps that people building a business fall into:
Just because you've been published in Techcrunch, doesn't mean you have a marketable idea. Early on, a company I founded received a lot of press (primarily newspaper coverage, magazine articles, blog posts). But we couldn't convert that hype into paying customers. Getting covered in the media won't turn a bad idea into a good one.
Likewise, getting a lot of traffic to your site or landing page doesn't mean you've succeeded either. The problem with traffic is that it's hard to quantify why people are visiting. Are they just curious? Bored? Our SaaS app's homepage received a spike in traffic due to a mention in a HN post. But none of that traffic converted because people were just curious; they weren't in our target market, or looking to buy.
This is one of the most dangerous forms of flattery. When I owned a retail shop we won "New Business of the Year". Guess how many customers cared that we'd won that award? Zero. Customers only care about their problems; they don't care about what accolades you've been given.
You can't validate a business based on people saying they "like" your idea. In fact, I think it's the kiss of death for startup ideas. When you hear comments like "Oh yeah, that sounds interesting", "That sounds neat", or "Cool concept" it's probably time to kill that idea. Why? You can't build a business on a mediocre response. What you're looking for is: "please take my money and let me use this".
If you're creating a startup, where the end goal is to make money, the only real way to validate your idea is if people are willing to pay you for it.
For his new product, Drip, Rob Walling emailed 17 founders (like Hiten Shah of Kissmetrics). He said very specifically: “I don’t want you to tell me that you think this is an interesting idea; I want to know if you would actually use and pay for it.” Out of the 17 people he asked, he got 11 people that said "yes" (ref: at 7:00 of this podcast).
Jason Cohen, of WP Engine, puts it best: "When ten people say they’ll give you money if you build this thing, that’s the only validation that counts."