TL;DR - You do not require a product to start a product company. Doing things manually and building an audience is extremely valuable, validating that your business model makes sense this way will save you a lot of time and wasted effort and money. This post comes with a hypothesis testing template as well!
This story was first published on Medium.
Building technology products is an incredibly complex process no matter what industry you’re working in. Just look at the body of work on every stage of the product lifecycle: from Lean Startup (and it’s thousands of iterations), micro services architecture, to Hooked: How to Build Habit Forming Products. However; one part of the process I find is constantly overlooked by founders today is, well, the first part.
OK, so what comes first?
That is, speaking to actual potential customers / users (if you don’t have revenue plans just yet, that’s cool) and seeing if they understand the problem you’ve identified. Then worrying about whether they even want a solution to that problem. Finally, checking if they’d pay money / use your solution.
This seems like a no-brainer but the number of entrepreneurs that have presented polished slide decks to pitch us new and interesting businesses but haven’t even done this basic form of validation for a market, let alone a product, is getting to be alarming. You can’t just build it and expect people to come and ‘marketing dollars’ is not a viable answer.
You simply shouldn’t expect to be able to raise outside capital to build out a product without first being able to clearly articulate the market problem, the potential solution you have in mind, and show that actual customers have validated the need for this problem to be solved.
Alright I believe you, so how do I get started?
Write your assumptions about the market problem you’ve seen and structure around 3–5 hypotheses that you can isolate and test for in conversation with domain experts.
Eg. “The average person is poor at personal financial management.” — This statement can be proven true or false in conversations with ‘the average person’ (your market at this time) and very likely lead to interesting conversations and outcomes.
Here’s a handy google sheet template to get you started; with examples! If it is of enough interest I’ll write a post to help guide you in writing hypotheses. Just let me know via twitter if you’d like that.
How do you know if you validated / invalidated your hypothesis?
If you’ve followed the template (google link in case you missed that) you’ll have created a hypothesis that is binary, that is it’s either true or false. Once you’ve collected data and if you’ve written it correctly you’ll know if it is a valid or invalid assumption you’ve made and you can start to plan to build your company.
Now you should be better informed about your market and can draft new, more refined, and more nuanced hypotheses to test against until you have a confident direction for the market and therefore a strong narrative that shows business validation to any potential investor.
Written by: Brandon Waselnuk