Finding Product-Market Fit: The Power of External Validation in Startups
Venturing into the startup journey often leads founders to a crucial juncture - the quest for market validation. Garnering proof that their solution resonates with real, paying customers is a critical milestone.
In my line of work as a startup consultant, I’m often asked, “Now what?” – a question that signals a pivotal point in the startup journey. This question typically follows a discussion about the enormity of the market opportunity a startup is poised to seize. Founders often find themselves outlining the breadth of their market and the potential windfall if they could just capture a mere one percent of it.
So, I challenge them with a task: find ten people. These are not just any ten people, but individuals who are unknown to the founder, who can validate that the problem the startup aims to solve is indeed real. More importantly, these individuals are currently paying to address this issue and are potential conversion prospects.
Having accomplished that task, the founder often turns to me with the question, “What now?” This is where the real work begins. With the external market validation of the problem and potential new insights, you are equipped with more data. This data increases the likelihood of achieving Product-Market Fit (PMF) sooner. And that’s why I stress the importance of keeping those ten people close.
If you came to me with a solution and proof of validation from ten independent individuals willing to pay for a better resolution to their problem, what would my advice be? I’d say always start from this point. When considering the opinions of outsiders or engaging in any such discussions, begin with your understanding of the problem statements and how you can enhance your critical thinking.
I often encourage founders to take a step back and consider what advice they would give if the roles were reversed. It’s a perspective that encourages introspection and strategic thinking. In the words of Jeff Bezos, the founder of Amazon, “If you can’t tolerate critics, don’t do anything new or interesting.” The trick lies in dissecting the criticism, separating the wheat from the chaff, and using it as a stepping stone to refine your solution.