Startups and Validation

A neon sign saying, “I have a crush on you”
Photo by Leonardo Sanches on Unsplash

In the start-up world, validation is touted as the key to the whole pie. A business plan hold little water compared to counting how man people like what your doing. You’ll probably pivot, anyways, so who cares what you are saying you are doing in a year. Bring your business plan to the bank, future SME. Unicorns, bring your LOIs to the big boys.

Show investors that you are loved and desired, and suddenly you will have to bat them away with a stick.Of course that is until you aren’t cool anymore, which happens to us all. Every company dies. One day old people will have to explain what Coca-Cola was, or that their grandparents all hated something called Nestle.

Once you are suddenly ugly and poor,take a break, hit the beach, and then come back later ‘reinvented’. You are only one good headline away from being popular again.

So what happened, then? Was your validation wrong, did it not show the world as it was? Almost certainly not, we have little understanding of our own habits let alone the machinations of society.

Hot take: We don’t know how the world works, and validation wont fix that for you. I don’t know if we can accept this, because we are sincerely surprised when popular things die. Popular is not the same as successful. What happened to all those sure bets? Where are the Segways?!?!?!

(And on a personal note, I feel we are punished for rejected the Segway by being drowned in e-scooters. They seem to be like other-dimensional squids falling from the sky. Forgive us, Dr. Manhattan!)

Validation isn’t what we think

Let me tell you the truth. Like most things, validation isn’t what we think it is, validation is what we hope it is.

The same way your crush tells you all that matters is a good sense of humor, we all know this to be false. In the same way, we know our research to be, well, entertaining.

And like all fantasies, we hope our crush might be the exception.

This is not to say that validation is useless, and below I say you why.

Money cares not so much about your validation as it does about your struggle to find it

Secret scoop: Validation isn’t scientific, its demonstrative. We want to show the following through our behavior and results:

The following four types of validation we do it entirely for others.

4 Types of Validation

1.Talk to an incredible amount of people.

This is to signal that they have been working very hard.

How often, though, do founders say how many people they talked to thought their idea was not good enough? Share some good examples if you have them.

2. Identify a real problem (that might even be solvable!)

Founders want to prove that people who actually know something about the industry the founders are trying to fix agree that the founders have, in fact, found something people would like to fix.

Coming up with ideas is a creative process. It’s goes up and down and backwards and forwards, and sometimes leads to a real rush in the head where you are convinced it will be the next big thing.

I’ve been there. It feels amazing. Write your feelings down on paper and read them the next day as if someone else wrote them. Are you equally sympathetic to your insights?

3. Line customers up.

Founders dream of industry players who don’t just agree that the problem exists, but will pay someone the founders to fix it.

Or, in some industries, the founders offer pleasure so profound it cannot be resisted.

Is your piggie sniffing over by that tree? What is that precious little truffle it has found?! Why, its a letter of intent!

4. Line up a potential sale

A client who might put you in next quarter’s budget is saying that they do believe that they might some day be willing to pay someone to fix this problem that everyone now agrees exists.

You smell that? That’s the sweet sweet smell of Other People’s Money.

5. Get their money in your pocket! (The secret fifth step no one wants you to know about)

A customer is the zirconium standard of validation. Money in the bank is the diamond standard. So much money that you are on investor’s list of companies they missed out on, that’s vibranium level validation.

Other People’s Money is transformed into YOUR MONEY

There you have it. The ascending value chain of validation. A five-step process of making any idea less of a personal vision and more of a mass hallucination.

Would You Be Loved?

Where are you on the ladder of validation?

The first four points: You are looking for the validation of others.

You are trying to convince other people to buy your idea, not your product . Your company. Your team. You. You want to be validated.

The only validation that should matter to a founder is secret #5.

Real validation of your company is colorful, rectangle-shaped and stacks in surprisingly short piles that are given to you in exchange for a product or a service.

If you can get the bills flowing in, investor money will chase it, will try to drown your earnings out and convince you, “You could earn even more if you just spent more! If only you had more money, you could make even more money!”

Those voices could be right, but that money wont come free. All of a sudden you are in the business of selling your company, not the product. Suddenly, you are not the chairman of the board. One day, you get demoted to Chief Inspiration Officer and they bring in a professional CEO. One day, you find you own 10% of nothing and watch the liquidators take your chair. You didn’t even see the professionals bankrupt your baby while trying to force feed it with debt it like a goose for pate.

If you are selling enough of your product to get people to beg to give you their money, make sure to take a deep breath and ask: “Do I even need it?”

The best validation might show you that you don’t need validation at all.

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