
If you can't find 10 people who say they'll buy it... - amirmc
http://blog.asmartbear.com/customer-validation.html
======
edw519
Great post.

Better yet: find 10 people to _write you a check_.

If you're building something that your prospects want and your demo is so
compelling, then smart people will crawl over each other to get their deposit
in first. I've even had propects beg me to leave my laptop after a demo so
they could play with it while I built it out.

10 people saying they'll buy it is a good start, but a deposit check separates
the talkers from the doers.

Sometime I think investors should require 10 deposits prior to pitching.
Imagine what a difference that would make.

~~~
SMrF
In the past I've done something similar where I asked potential customers to
pay me to build a product and learned, before I wrote a line of code, nobody
wanted what I was selling.

On the other hand, I've run into a situation recently where this didn't work
as I expected. My current project is sold to businesses. When I asked a few of
the businesses I was talking to if they would pay me the price I was going to
charge for the service to actually make the product, something strange
happened. Even though the amount of money I was asking for was quite small
this request still went through the entire purchasing apparatus of the
business. I figured the manager I was talking to could just write me a check,
but I was wrong. Long story short they wanted to own a part of the business if
they payed me money to make it, so I opted to not take their check.

I figured this was good enough validation and I'm plowing ahead on development
even though I am a tad worried about what my sales cycle is going to look
like. But I never would have learned this if I hadn't straight up asked for
money before I even built it.

~~~
jonknee
I've had success going the other way--having a meeting about making software
for a company and then figuring out it makes more sense if I retain ownership
and sell it multiple times. They save money up front and I can get paid while
still having something to sell down the line. Everyone wins.

~~~
geoffw8
I agree - but - devils advocate - possibly a bit of a grey area. I agree its
probably the best way to build software people need.

If they'd contacted you, paperwork was involved blahdey blah, they might feel
it was their IP.

~~~
jonknee
It's all above board--I wouldn't do this without having them fully aware. It's
a good way to get into SaaS too, a lot of companies have an easier time
justifying monthly fees than up front.

------
mattm
I believe Tim Ferris wrote that for his business ideas he would first create
the actual site to sell it and then spend a few hundred dollars on adwords.
When the user clicked to purchase, they would be shown a page saying "Sorry,
this product is still in development page. Please enter your email to find out
when it will be available."

That would let him know exactly how many people were willing to buy.

It's a pretty clever idea. For only a few hundred dollars and a little bit of
time building the website, you will be able to find out what your conversion
rate would be. I may do this for an idea that I am just starting work on.

~~~
michael_dorfman
That's called a Dry Test. It's not original with Tim; there are quite a number
of sources on the subject.

~~~
mattm
Fair enough. It just happened to be where I learned of the concept.

------
iamelgringo
I wonder if the guys at Google, Ebay, Skype, Twitter, Yelp, Foursquare,
Facebook had 10 people that were willing to purchase their software or service
before they started? Did Apple have 10 people lined up to purchase their first
product? Were they able to pre-sell the Mac?

I understand what the author is getting at, and it may work for a certain
class of startups, but I don't think that it works 's terribly realistic to
apply that to all startups. Yes, talking to people about what they want or
would be willing to pay for is a good idea, but there's a lot of products that
people just aren't going to understand until they see other people using it.

The vast majority of successful startups end up building a completely
different product than the one they set out to build. I'd much rather build a
minimal product, put it in front of people and then iterate the product until
you have something that people want and use.

~~~
jonknee
Besides Apple, you mentioned no companies that actually sell products so this
advice isn't applicable.

Both Apple and Microsoft famously had orders before product, but that's really
common in product oriented businesses. Dell made a whole company around that
philosophy.

~~~
webwright
I think that's his point. Selling software is only one kind of startup. Would
be interesting to apply the "get outside the building" thinking to:

1) Games - how to you verify that a game is "fun" before you build it?
Cardboard cutouts and early play testing?

2) Marketplaces - You can verify that people hate eBay or VRBO, but what sort
of early validation could you do to take them on?

3) User generated content - What could Yelp have done to validate the market?

Those are just a few off the top of my head. Not saying that you can't "get
outside the building"-- just that it might take a different type of
thinking...

------
tomwalker
I have been running a product based company without investment based entirely
on sales.

I put in my own money to buy a small supply, sold it based on direct sales.

Used the profit to buy more supply and get basic marketing material printed,
sold that next supply.

Improved my packaging/printed marketing material/got a website built etc.

It has been slower but this is my first proper business so it means that I am
learning fast, maintaining control and proving myself.

I would recommend this way to anyone that isnt doing a "next big thing"
project. It keeps you on the cutting edge of customer feedback.

------
nadam
Did Sony, Intel, Microsoft, Apple, Amazon, Google have 10 people who said they
will buy their first product? (I am asking because I am not completely sure.
Maybe it is a bit more complicated in case of very technology-heavy/research-
based/very innovative startups?)

~~~
byoung2
Some did:

    
    
      Sony: started in 1945 as an electronics repair shop.  Built-in audience
      Microsoft: in 1975, MITS requested Bill Gates and Paul Allen sell their BASIC interpreter for the Altair before it was even written
      Amazon: started in 1994.  Everyone buys books, they just needed people to do it online
    

Intel, Apple, and Google were much riskier. Google wanted to sell its search
technology to giants like Yahoo, but Yahoo refused. Apple built products no
one knew they needed, but now we can't live without (hackable PC). They
continue this today (iPod, iPhone, iPad, etc.).

~~~
infinite8s
According to Founders at Work, Steve Wozniak designed the original Apple I for
fun (and as a challenge), and later when he showed it to Steve Jobs and other
people at the Homebrew Computer Club they realized that lots of people (well,
members of the computer club) wanted something similar.

------
jasonlbaptiste
We did this with flow.cloudomatic.com a few months back. We knew there was a
need for affiliate software for web apps from our own problems, but that
seemed like horseshit. So we did the whole MVP smoke test thing with a sign-up
page before we even started developing it. Best decision I've ever made. We
have a number much larger than ten and we saved ourselves the possibility of
building something people didn't want.

~~~
cloudkj
Out of curiosity, how'd you drive traffic to the MVP/smoke test landing page?

~~~
jasonlbaptiste
It's kind of funny and part of the validation - an interested customer/user
posted it to HN before we were even ready to announce it. I was on a call and
all of a sudden the live stats counter goes apeshit and the referral traffic
is from HN. The user said: "Sorry if this wasn't meant to be posted yet, but
I'm so excited by it, I had to share it"

------
chaosmachine
Unfortunately, I think this is one of those lessons you only really learn
after you've built a product no one wants. Until it happens to you, you'll
always think your idea is the exception.

------
DanielBMarkham
I would like to get this put on T-shirts, in big bold red letters, and hand
them out and the next startup/VC/hack-a-whatever

~~~
orblivion
You'd better see if 10 people would be willing to buy it first though.

------
decadentcactus
> If you're still not convinced, think of it as project risk management. In a
> big software project do you tackle the high-risk, ill-defined stuff first,
> or do you postpone that to the end? Obviously you address the unpredictable
> stuff first — most of the project risk is due to the unknown, so the earlier
> you can sort out uncertainty the more time you have to deal with the
> consequences.

That definitely opened my eyes a bit. I usually do the difficult parts of a
purely software fun app first, but when it comes time to making a bigger
public facing app I just build it too.

Good post.

------
bryanh
Alternatively, make sure that they are already buying it through an existing
service. Now you need to make a better, easier to use product and price
competitively. In a marketplace where you can harvest demand (IE: PPC) this is
very effective. However, make sure that by pricing competitively you don't
have a wide disconnect between acquisition costs and revenue.

------
awt
I would really like to see some advice on how to do customer development for
consumer apps. This is really targeted at b2b people.

------
mpc
What if your product is Foursquare or Twitter? There are obvious business
models down the road but only until you achieve massive adoption.

I think the question to potential users is "Would you use this everyday?".
This is more important than going to Starbucks and asking if they would pay to
promote within the service (it's a no-brainer).

~~~
dtegart
The business model for Foursquare requires that both users and businesses find
their respective propositions valuable. So essentially you have two sets of
customers and you would have to ask both. Users: would you use this everyday
Businesses: Would you pay to reach X number of your loyal customers

------
thentic
Appropriate pricing strategies are key here. We were able to get 10 'charter
members' who paid $500 for a lifetime membership when our idea was just notes
on 2 pieces of paper. Currently we're offering a beta, which is 2 years for
the price of one and shortly we'll reach critical mass and change it again.

------
rama_vadakattu
How to validate the product which does not have price tag?

~~~
chmike
Offer variants of your product with different prices. The prices are the test
points. See which one people would buy. Apple does it all the time and provide
three products (16gb, 32gb,64gb). With three points you can interpolate a
curve and locate the maxima. Note that the price difference of the products
should not correspond to the production cost difference. It should be the test
points.

------
tieTYT
What if you have a startup idea that you think is great but you don't want to
tell anyone because you're afraid they will steal your idea?

~~~
Martin2010
You wake up and realize ideas are worth nothing, everyone has them, and they
would much rather work on their own, than steal a half baked idea from some
random guy.

------
alexrodygin
Alternatively, be so damn good in what you do that 'they' won't be able to
'ignore' you

~~~
michael_dorfman
That's not really an alternative-- how do you know you're so damn good if you
can't find 10 people willing to pay?

~~~
sprout
How can you find 10 people willing to pay for something that doesn't exist,
has no analogue, and will have no understanding of what it is until they use
it?

~~~
ryanwaggoner
How many examples of successful startups can you name that fit that
description? I think there are very, very few successful tech companies that
had no analogue and couldn't have been explained in 1 or 2 sentences. Apple,
Google, Dell, Facebook, Twitter, Github, Reddit, Zynga, etc, etc. They were
all either a twist or improvement on an existing idea, or a combination of
several ideas.

If you can't explain your idea in 10 seconds now, you probably won't be able
to later. If people have to really play with it to understand what it is and
how it'll be useful, you're doomed. See Google Wave.

~~~
sprout
Letting people play with it to find out what it is and how it'll be useful is
exactly how Google, Facebook, Twitter, Github, Reddit, and Zynga got their
start. Nobody was willing to pay for it out of the gate, and most people still
aren't.

~~~
ryanwaggoner
That's a far cry from what you said. They all had analogues, and you could
have explained them to someone before they existed. Perhaps it wouldn't have
been clear just how much better they were, but they weren't completely
original ideas that had never been done before and were impossible to explain.

~~~
alexrodygin
Can you quote how many hours Google founders spent talking to customers?

How many Twitter founders spent and why they still don't know the business
model that will work?

Facebook started as somewhat of a ripp-off but actually people weren't willing
to 'buy' it, hence these stories over IP that Facebook got into over the
initial days

------
startuprules
The post needs a modification.

If you're building an incremental product, please do ask 10 people.

If you're building a revolutionary product, build a prototype first, then ask
10 people. Otherwise people will just ask for horses with wheels.

~~~
wolfrom
I think that there are important distinctions between incremental and
revolutionary products, and I agree that this advice may not work for the
latter... now, how do you stop founders from thinking their latest idea is
revolutionary just because they haven't done enough research to know any
better? (This is what I wonder about with my ideas)

~~~
startuprules
If the founders don't know whether the product is revolutionary or
evolutionary, they don't understand the market. If they don't understand the
market, why the heck are they building a product for it in the first place?
Get some experience first by working in that market, using someone else's
money.

------
ariels
Advice that basically boils down to you should have customers and revenue
doesn't seem incredibly helpful.

------
hop
If you are not intuitive enough to know what people will buy and need outside
validation, it may be a tough road to being a successful entrepreneur. To
build great products, you have to know what people want. Maybe if your product
had massive upfront capital costs - like a chip fab - you would get some
signed purchase orders before hand, but if its a web app, you should be
confident enough to just do it.

~~~
ryanwaggoner
Sorry, but I _completely_ disagree. Do some contract development work for
awhile. People start pouring out of every crevice and crack with their
brilliant ideas that they're absolutely sure will work. I know from experience
that very few of them will go anywhere. Sad, but true.

The only way to build great products using your gut it to scratch your own
itch. This is a completely valid approach that can work really well, but even
then, you're better off doing this customer validation thing. You might be the
only customer out there. And yeah, web apps are cheap to build compared to
chip fab plants, but why spend several months building something and then
another 6-24 months pushing it to get traction (the really hard part) if you
can find out that there's no market with a few days of work?

Finally, I know quite a few successful entrepreneurs who are huge advocates of
the customer development model, so I hardly think that being a great
entrepreneur requires you to avoid talking to your potential customers before
you start building, and hoping that you're just the 1 in a million genius who
really does get it. You're almost certainly not Steve Jobs, my friend.
Survivorship bias is the only reason we think we might be...we don't see the
millions of failures who thought they could predict the market's desires
without talking to them.

~~~
hop
I own a product design company and people come to us all the day with ideas
for products they want brought to market

Folks unsure of their product/idea tend to not have a great product or are
just not good at starting a business. But the people that know a market exists
for their idea and just need it implemented are more than likely to succeed.

I'm racking my brain to think of any successful entrepreneurs that had to get
validation before they started. Jeff Bezos? No, he had an idea for an online
bookstore, quit his job, moved to Seattle and started one. 37Signals? I bet
Jason Fried asked for lots of validation. Steve Jobs? No, they built the Apple
1 and started selling it. Henry Ford famously said "If I had asked people what
they wanted, they would have said faster horses."

~~~
ryanwaggoner
Read the last sentence of my previous post again...you think of those people
because they're the rare ones who can succeed based on their gut alone,
allegedly doing no customer development or validation. I'm not even sure I buy
that part...didn't Jobs and Woz spend tons of time hanging out with computer
hobbyists in the early days? Seems like a good way to learn what your market
wants. And Fried was scratching his own itch, which as I've already said is a
separate thing.

I just don't get why you wouldn't try to find out if you'll be able to find
customers _before_ you spend all the time and money to build the thing.

