One of the first products I built was CRM software for non-profits. It was about 2001, and I was 21 years old. Every day after work I’d spend hours and hours customizing each screen and interaction.
Nervously, I approached a local charity and asked if I could demo it for them. They were impressed! The Director invited me to come to their conference, and show it to other non-profits from across the country.
Man I was excited. I burned the software onto 20 CDs (yes, for CD-ROMS), booked my plane ticket, and arrived right as the conference was starting. Glancing at the agenda, I noticed that my demo had an official time slot.
I smiled: it felt like all my hard work had been validated.
I ride my bike and I listen to podcasts. Lately on my ride to work I’ve been listening to Startup. There’s a quote at the beginning of episode 2:
“YC is like the ultimate validation that you’re on to something.” – Lauren Kay, Dating Ring
If you’re building a product, you want validation. You want to know your product has value – that you’re on the right track.
Even deeper, you want to be validated. You want to feel like you’re not wasting your time. You want to feel like your work is valuable.
Legitimizing your product is important, but aggressively seeking personal validation can be dangerous.
I’ve seen it lead to two mistakes:
- We seek the wrong kind of validation
- We look for validation in the wrong places
Back to my story.
The time for my demo arrived. I waited anxiously in a conference room, expecting hundreds of people to attend.
Only 20 came.
Pushing my disappointment aside, I showed my software with as much enthusiasm as I could.
Afterwards, a handful of people came up to say I was a great presenter. But when I asked if they were interested in buying a CD, they politely declined. Truthfully, they weren’t really looking for a new solution. Their Excel sheets were working just fine. I had mistaken their initial enthusiasm as validation.
I sold 5 copies.
How do you validate your idea?
Getting accepted into Y Combinator is not validation. Having your product hit #1 on Product Hunt is not validation. And, as I learned, having one enthusiastic beta user is not validation.
If you’re building a business, there’s only one way to ensure that your product idea is good: are people paying money for it?
The only two people who can give you real feedback about your product are people who just purchased it and people who just canceled.
Often, finding customers is the last step in our product development process. We think: “First I’ll come up with the idea. Then I’ll build it. And then I’ll go find people who want to buy it.”
That process is backwards. As Jason Cohen says:
First, find ten people who say they’ll buy.
But finding folks who will pay for our idea is hard. It opens us to the possibility that our idea isn’t that good. This scares us, so we go looking for affirmation in other places:
- we ask our friends if they like the idea
- we post our idea on startup forums
- we keep building our product in a cave, affirming that we’re “making it better”
Avoid these temptations! Before you go any further make sure you have a product that people want so much, they’ll pay you for it upfront. Seriously.
(BTW: I’m in the same boat as you. I want to skip over that last line. In fact, I have a product in mind that I need to do this for.)
After your first dollar
Finding people willing to pay you for your product? That’s hard enough. Most people don’t even make it to that stage.
But that’s just the first step.
The real question is: can you profitably acquire new customers every month?
After demoing my CRM software at the conference I realized I had problem. While I’d been able to convince 5 initial people to buy, finding new customers proved to be time consuming and expensive.
Rob Walling articulates this dilemma here:
Building something people want is not enough. You have to be able to market it at a cost less than what the customer will pay you back over time.
To be successful, a product needs customers that are easy to reach, cheap to convert, and undemanding to support.
In other words: it’s no use building a product that sells for $100, costs you $200, and has few buyers.
If your product is going to survive (and thrive) you’ll require two things. First: an increasing number of customers that love your product so much they’ll buy it and tell their friends. And second: a product that costs you less to run than you’re bringing in in sales.
The result is profit, and there is no sweeter validation.
PS: After months away, I’m once again working on my book, Marketing for Developers. You can download a free chapter here.
Special thanks to Nate Kontny, Ashley Baxter, Paul Jarvis, and Jarrod Drysdale for their feedback on this post.