5

The Ultimate Step-By-Step Guide to Validating Your Startup Idea, Part One

So you have a startup idea - but how do you get started?

After mentoring 1000 entrepreneurs and incubating 400+ early stage startups, I discovered that many entrepreneurs make the same expensive mistakes. These mistakes can be easily avoided if they knew how to design and conduct lean startup experiments.

In this three-part series, I am going to teach you the startup framework that you need to validate your startup idea so you avoid the number one mistake people make which is to build something that nobody wants.

The core concepts covered in this series include:

  • Understand problem-persona fit
  • Understand problem-solution fit
  • Understand product-market fit

In this section, we will cover how to find your problem-persona fit.

Step 1: Understand the problem that you’re solving

When an idea strikes us, one of the immediate reactions we have is to dream of all the possibilities. In that moment of inspiration, our adrenaline starts to bubble, and we become fanatically excited about this blue ocean opportunity.

We then feel empowered and say to ourselves “Yes this can work!” and soon after, we begin to implement the solution. But in the end, we find ourselves in the trenches wondering “What went wrong?”

I know this story all too well and I’ve heard it a thousand times at Launch Academy.

One of the biggest mistakes that an entrepreneur can make is to ignore problem research. Because most entrepreneurs enjoy providing the solution part, they end up neglecting validating the problem they’re solving for. 

Takeaway: Don’t jump into solution-land right away! Your idea is a hypothesis for research. Problem research will anchor your customer discovery process and provide you the insight you need to design the right solution.

How to conduct problem research?

The easiest and most effective way to gain qualitative insight to the problem you’re solving is to talk to the people who are having these problems! 

The problem interview allows you to validate whether or not you have a real problem to solve. Your problem interview should focus on getting answers to the following:

  1. Who are my target customers?
  2. What problems are they having? How do they rank each problem?
  3. How are your customers solving these problems today? What are the alternative solutions?

In a problem interview, don’t ask what your customers want, instead, figure out what they need. Like Henry Ford once said, “if I had asked people what they wanted, they would have said faster horses.”

This is why you should not ask leading questions. A leading question is one that prompts the respondent to answer it in a particular way. Here’s an example:

Do you have a problem with your bookkeeping software?

This question prompts the person to think about any negative experiences with the bookkeeping software. In a subtle way, it raises the prospect that there are problems.

Instead, ask: Can you tell me about your experience in using this bookkeeping software?

This question does not seek any judgment and there is less implication that there might be something wrong with the bookkeeping software. It’s open ended enough for the user to tell you about their whole experience.

Some users may not give you the direct answer when you ask it the first time. Therefore, you want to keep digging for better clarification. You can say:

  • “Tell me more about that”
  • “What do you mean by that…do you mind sharing”
  • “Help me understand better…”
  • “Why is that? I am curious to learn more” (Learn about the 5 Why’s technique)

At the end of day, people will lie because there is a certain image that they want to project. If you can make your users comfortable, they will feel safer to share their hidden thoughts. As a result, you will be able to uncover the root problem by keeping your questions open-ended.

Click here to see Ash Maurya’s problem interview script.

Click here to learn about Five Why’s technique.

Step 2: Understand who you’re solving the problem for

You probably heard it a thousand times that it’s important to map out everything you know about a customer, their age, sex, geographic location, income level, occupation, discretionary budget, type of car they drive, type of media they consume, brands they love and etc.

And chances are, you end up something like this:

In theory, personas should allow us to better understand our real users so we know exactly how we should design our product and market it to them. Unfortunately, most people end up creating useless personas because they don’t result in actionable takeaways. Personas often times are projections of what we hope our users would be like, but they end up being nothing but fictional characters.

This is why we taught you to conduct a problem interview with real users so you can collect the information you need to construct a research-based predictive persona.

A predictive character identify the things that make people want to be customers and uncovers any underlying anxieties or motivations surrounding their character.

As Laura from Invision points out, “a predictive persona is a tool that allows you to validate whether you can accurately identify somebody who will become a customer. The question you should be asking yourself isn’t “If I interviewed a user, would this describe her?” The question should be, “If I found a person like this, would she become a user?”

This becomes incredibly powerful because you are no longer confined by a traditional persona built from intuition and imaginary ideas. Instead, you have the foresight to whether or not your user will become and remain a happy customer.

As you synthesize your research from your problem interview, you are going to notice a pattern in the potential users that you talk to. Do they have the same anxieties and motivations? Do they go through similar thought process and events to resolve their problems? Are they similar in demographic?

Remember, your predictive persona is constantly evolving. As you gather more data and insight, your persona should become more accurate. Eventually, they will reflect real people you can find in the real world. Your next step is to recruit 10 people who fit your predictive persona and see if they will actually become customers. If you are early in your discovery, measure how likely your target audience will become your customers by observing their attitude towards the solution you’re proposing. Then you will know if your predictive persona has been validated or not. You repeat this process until you find what we called a persona-user fit. Then every design, marketing, and product decision will revolve around this persona because you now know if you spend X dollars on marketing and target this type of persona, you are going to have the highest conversion rate.

You also repeat this process when you are exploring a different customer segment.

Read Invision’s blog on predictive persona here to learn more.

Takeaway: Use real-world data to construct your target persona and identify if they have similar problems, anxieties or fears. Keep interviewing people until you have found 10–20 people who are experiencing this problem. Then you must decide if this problem is worth solving for.

Step 3: Discover your problem-persona fit

Repeat step 1 and 2 until you have a solid understanding of what the problem is and who are you solving it for. This is called a problem-persona fit. Here are a few examples of positive signals:

  • 80% of your interviewees rank the problem you are trying to solve as one of the top three pain points that they are currently experiencing
  • 100 people who fit your predictive persona ended up signing up to your landing page
  • 80% of your interviewees have rated the problem as a 9 or above magnitude in terms of pain
  • 10 potential customers who are ready to pay you to solve this problem for them

Takeaway: Take the time to do proper problem research so you can identify what the problem is and who you’re solving it for. At the end of the day, you want to be able to say “There is a clear unmet need for this group of people because through my research, I’ve discovered that 90% of them rank this problem as their number one issue.”

Last Words of Wisdom

Invest the time into problem and persona research because you will end up saving more time and effort by the time you’ve launched your first prototype.

You might have heard Mark Zuckerberg’s famous motto, “Move fast and break things.” or seen the “Fuck it, ship it” posters in startup offices. The truth is that the startup ecosystem is getting increasingly saturated with apps and products and it’s becoming more and more competitive. Sometimes you only have one shot at making a good first impression so be laser focused on creating immediate value for your target customers. This can be accomplished by discovering that problem-persona fit before you move onto creating a solution.

In Part 2, we will be covering finding a problem-solution fit through experimentations.

Can't wait? Sign up for our free email course, covering everything you need to know about building a startup. 

Comments

Great post Alex!
I have consistently seen the Problem-Persona fit phase of startup or product development either carried out poorly or not done at all.
As you suggest, carrying this out properly can help validate what should be in the product or indeed whether it should be built at all.
But I have found that communicating this information is critical to success. There are very good business plan tools and software development tools. But the problem is that each of the people using these don't have a mechanism to share information relevant to each other!
Have you or your clients used a tool to help communicate the learnings in the Problem-Persona phase?

Reply 1

To comment, you must be a member. Become a member today or log in.