Is your startup a good idea?
Startups are ideas in action. However, not all ideas are created equal. Let’s explore how startup leaders can use the concepts of feasibility, desirability, and viability to quickly and reliably validate startup, product, and feature ideas.
Is your product feasible?
Some products are easy to build; others are impossible. The more confidence you, your customers, and your potential investors have in building your product, the greater the feasibility.
A startup that depends on novel technology nobody else has deployed has a high risk of being unfeasible. A startup that only depends on mature technologies is much easier to build. Some problems require novel solutions; others are easy to solve with existing techniques.
- A startup that aims to instantly perform hundreds of blood tests with a single drop of blood has a massive degree of feasibility risk. Nobody in history has built a solution like that, so it’s a leap for investors, partners, customers, and employees to jump on board.
- A startup that aims to build a SaaS solution for online retailers will most likely recycle mature technology already validated by a massive industry of B2B SaaS companies. Investors, partners, customers, and employees will find it easy to endorse a solution like this.
If your solution requires novel technology, your priority as a founder should be to validate your technical approach. Build a prototype or proof-of-concept to prove that your solution is feasible. Without this well-founded confidence, you will struggle to raise capital, recruit a team, and convert customers.
Sometimes, a lone technical founder can build this proof of concept before raising capital, hiring a team, or finding early adopters. Sometimes, you require a team of deeply technical people for research and development. It can be difficult to raise capital just to validate a technology, especially if it will be expensive to do so. Investors will consider things like your experience as a founder, your credibility as a trailblazer in your technical field1, and your product’s potential value if you succeed2.
If you fail to prove feasibility, you should find a new solution or perhaps an entirely different problem to solve. Ideally, you’ll come across alternative ideas to try in your efforts to validate your original ideas.
Do people want your product?
Some products are easy to sell; others are impossible (because nobody wants them). A desirable product is one that the market yearns for.
Some startups solve such big problems that it’s obvious they will be desirable. One of the solutions previously mentioned fits this description: everyone knows that blood tests are a common occurrence, so a major patentable improvement to the customer experience will inevitably present a big opportunity. In contrast, yet another B2B SaaS solution may require more proof of desirability.
Desirable B2B products always:
- Increase or protect revenue for their customers. Shopify, for example, makes it easy for retail businesses to collect revenue online.
- Reduce operating costs for their customers. Zendesk, for example, helps customer service teams to work efficiently, reducing the costs of operating a support team.
If you can accurately quantify a productive impact on your potential customers’ revenue or operating costs, you can safely assume your product will be desirable. The best way to do this is to recruit some early adopters and build the product with them. Measure the impact of your product, and use this measure to guide your product strategy and your pitch to new customers, staff, and investors.
Another way to validate desirability is to start selling. Many startups launch with a simple website to collect expressions of interest long before they build their solution. These days, it’s easy and affordable to conduct some top-of-funnel marketing efforts like digital advertising, content marketing, and outbound sales before you have a product. The potential customers you collect will help you to prove that your product is desirable, and many of them will be suitable early adopters for your product as you build it.
If you fail to prove desirability, you should find a new problem to solve. Ideally, you’ll come across alternative ideas to try in your efforts to validate your original ideas.
Is your startup viable?
A harsh truth of startup building is that startups with good solutions to valuable problems can still fail; this usually happens because they fail to build a viable business.
It’s not enough to solve an interesting problem. You also need to:
- Ensure your problem is big enough to justify pricing that can support your operations and price your product accordingly.
- Build a scalable, repeatable, and profitable sales model where you can recruit new customers who pay you more than you paid to acquire them.
- Build a product onboarding experience that enables you to grow quickly without an excessively large professional services team.
- Build a mostly self-service user experience that allows you to keep a lean and affordable customer support team.
- Build a reliable and easy to maintain technology stack that doesn’t slow down product development or cause problems for customers.
- Continue to deliver new value to earn more from each existing customer and retain them long-term.
- Maintain the flexibility to pivot around unforeseen market, competitive, or regulatory challenges.
The good news is that very early-stage startups have time to prove viability. If you have a desirable and technically feasible product, you should be able to raise enough capital to work your way towards viability as you scale.
Early-stage startups should strive to prove both desirability and feasibility immediately upon founding, understanding that the bar for proving each varies depending on your chosen problem and solution. Once you’re confident in these areas, your job is to build a viable business.
It’s easier to raise money for a rocketry startup if you have a PHD in Hypersonics and Rocketry and have worked at SpaceX. ↩︎
Wise investors won’t take big risks on startups with limited upside. The greater the potential return, the easier it is to justify a risky and unproven approach. ↩︎
6 August, 2023
Subscribe for updates
Subscribe for weekly advice covering product strategy, development operations, building teams and more.
Privacy and terms
I care about privacy as much as you do. I will only use your email address to send you this newsletter or to reach out to you directly, and you can unsubscribe at any time. I will not share, sell, or rent your email address to any third party, though I do store it the software I use to dispatch emails.
The information provided on this blog is for informational purposes only and should not be considered investment advice. The content on this blog is not a substitute for professional financial advice. The views and opinions expressed on this blog are solely those of the author and do not necessarily reflect the views of other organizations. The author makes no representations as to the accuracy, completeness, currentness, suitability, or validity of any information on this blog and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its use. The author may hold positions in the companies or products discussed on this blog. Always conduct your own research and consult a financial advisor before making any investment decisions.