Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How To Validate Your Business Idea By Testing A Hypothesis

hatchery.io

Post reply on HN
Print view View original

51–60 of 62 posts

Re: How To Validate Your Business Idea By Testing A Hypothesis

#51

Post by zacharycohn »

kisielk wrote: post #47
noonespecial wrote: post #8

Earlier quoted context omitted.

>"There are no rules for good photographs, there are just good photographs". There are also lots and lots (and more lots) of bad photographs. There might not be specific rules for taking really stand-out pictures, but there sure are good rules for what not to do.

And yet a lot of times the best photographs are the ones that break the rules of what not to do...

On purpose. Bad photographers break rules they don't know exist. Good photographers break rules on purpose, in very specific ways, to achieve a very specific effect.

Re: How To Validate Your Business Idea By Testing A Hypothesis

#52

Post by zacharycohn »

coldcode wrote: post #34

A startup I know had a great idea, great product name, validation from some actual people in the industry that it was something everyone would want. They built it and launched and discovered that the industry as a whole was technology phobic; the problem was that the supposedly representative people they talked to where among the few that understood the benefits of the technology (in this case mobile). It's like a po…

So... they didn't have validation, then?

Re: How To Validate Your Business Idea By Testing A Hypothesis

#53

Post by pitt1980 »

RogerL wrote: post #36
wpietri wrote: post #25

Earlier quoted context omitted.

Indeed, rather than just asking if they'll sign a contract, you can pull out a Letter of Intent [1] and ask them to actually sign it. You can explain that they're not legally binding if you need to keep people from freaking out. But there's something about signing an official-looking document that a) makes people take it seriously, and b) makes people more likely to really sign up when you come back to them. Dependin…

Please, no. As soon as someone starts trying to maneuver me to take money out of my wallet, I'm gone . It's not my problem that you don't know if your product is good or not. There is no way on earth I'm signing anything, giving you a credit card number, or what have you. I'm utterly shocked that this is considered a good way to gauge interest in a product. Even if I really am interested, so what? I have a budget, my…

that's fine,

but that's evidence that you're probably not a profitable customer to chase (which again, is fine)

if you're not taking out your wallet, you're a waste of the salesmans time, the earlier they can figure this out the better

Re: How To Validate Your Business Idea By Testing A Hypothesis

#54

Post by enraged_camel »

wpietri wrote: post #33
enraged_camel wrote: post #30

Earlier quoted context omitted.

Yes, but asking someone how much they would pay for it takes them almost all the way, mentally, to actually paying for it. You're basically asking them to make a verbal and very informal commitment, but that's enough to make most people think about it seriously (as opposed to saying "omg I love it!!!" just to be nice).

That's not my experience; I now avoid asking hypotheticals because the results for me have been very unreliable. I'm certainly unreliable that way. There are a number of Kickstarters where I've said, "OMG I'd pay for that!" But if I come back to it a couple of days later, I'll never actually click on the signup button. I'm even worse with things like this in person. I don't like disappointing people, so I'll try hard…

>>That's not my experience; I now avoid asking hypotheticals because the results for me have been very unreliable.

The point in this context is that, while it may still be unreliable, it would be more reliable than simply asking if they like your product. And it is the best you can do, since no one is going to actually pay for a product that doesn't exist yet.

Re: How To Validate Your Business Idea By Testing A Hypothesis

#55

Post by w1ntermute »

WhitneyLand wrote: post #29

Look at it from reverse - of all the big/successful startups out there how many used any formality or rigor in validating their ideas? Even if they did validate early on what made them successful often changed drastically based on what was known when the company was started. In otherwords, what percentage of the time does this payoff?

Out of the four $10b+ companies founded since 2007, Dropbox and Airbnb definitely used Lean techniques[0], and Uber probably did[1]. That only leaves WhatsApp, which there isn't much information about out there. But considering how little funding they took, it's safe to assume that they utilized similar techniques.

0: http://www.hult.edu/en/news/hult-labs/2013/august/the-lean-s...

1: http://www.quora.com/Lean-Startups/Did-Uber-use-any-lean-sta...

Re: How To Validate Your Business Idea By Testing A Hypothesis

#56

Post by jrmiii »

bane wrote: post #45
davidroetzel wrote: post #14

This kind of advice pops up on HN from time to time and while I believe it to be valuable, I guess it is at least incomplete. Here are two stories from my failed ventures to augment this advice: 1) Years ago I started a small side-business with a few colleagues. It was a web-based service for a very specific group of clients. Best of all: The idea had already been validated. We had our first paying customer before we…

> but as we had to learn the hard way nobody was willing to pay for it. I was part of a startup a few years ago with some really cool technology and good market validation. Somehow we got connected to a very well known media and technology company and were brought in to sell our product to them. The founders, star struck, pulled out all the stops on our presentation, flying people cross country, buying up demo data,…

Been there. I think you have to hold some trade secrets back to avoid this fate.

Re: How To Validate Your Business Idea By Testing A Hypothesis

#57

Post by wpietri »

RogerL wrote: post #36
wpietri wrote: post #25

Earlier quoted context omitted.

Indeed, rather than just asking if they'll sign a contract, you can pull out a Letter of Intent [1] and ask them to actually sign it. You can explain that they're not legally binding if you need to keep people from freaking out. But there's something about signing an official-looking document that a) makes people take it seriously, and b) makes people more likely to really sign up when you come back to them. Dependin…

Please, no. As soon as someone starts trying to maneuver me to take money out of my wallet, I'm gone . It's not my problem that you don't know if your product is good or not. There is no way on earth I'm signing anything, giving you a credit card number, or what have you. I'm utterly shocked that this is considered a good way to gauge interest in a product. Even if I really am interested, so what? I have a budget, my…

Your reaction is normal for a late-majority adopter [1]. But early-stage startups are looking for the innovators and the earliest of the early adopters. When those people get to the point of saying, "OMG, I want it!" they will indeed sign contracts or pull out a credit card.

The point of asking people for money is exactly to separate the people who really are early adopters from those who are just enthusiastic.

A great example is Kickstarter. You may be unwilling to buy a product based on little more than a dream, but plenty of people are willing to take a gamble on something risky when they care enough about it. The rest of us wait until the product has come out, has been reviewed, and have friends using it.

[1] http://en.wikipedia.org/wiki/Diffusions_of_innovations

Re: How To Validate Your Business Idea By Testing A Hypothesis

#58

Post by wpietri »

j45 wrote: post #40
wpietri wrote: post #25

Earlier quoted context omitted.

Indeed, rather than just asking if they'll sign a contract, you can pull out a Letter of Intent [1] and ask them to actually sign it. You can explain that they're not legally binding if you need to keep people from freaking out. But there's something about signing an official-looking document that a) makes people take it seriously, and b) makes people more likely to really sign up when you come back to them. Dependin…

LOI's are generally more interesting to investors. As someone who is bootstrapping or working with limited time or money, there's no better validator than money.

Sure. Money's definitely best. But if you don't actually have a product, asking for money can be tricky. The LOI's not as good as cash, but my point is that it's way better than, "Sure, I'd pay for that!"

Re: How To Validate Your Business Idea By Testing A Hypothesis

#59

Post by tchock23 »

wpietri wrote: post #33
enraged_camel wrote: post #30

Earlier quoted context omitted.

Yes, but asking someone how much they would pay for it takes them almost all the way, mentally, to actually paying for it. You're basically asking them to make a verbal and very informal commitment, but that's enough to make most people think about it seriously (as opposed to saying "omg I love it!!!" just to be nice).

That's not my experience; I now avoid asking hypotheticals because the results for me have been very unreliable. I'm certainly unreliable that way. There are a number of Kickstarters where I've said, "OMG I'd pay for that!" But if I come back to it a couple of days later, I'll never actually click on the signup button. I'm even worse with things like this in person. I don't like disappointing people, so I'll try hard…

Very good points here. The prevailing advice for entrepreneurs from folks like Steve Blank is that you must "get out of the building" and be physically in front of customers to interview them, but in my experience 95% of customers would never tell an entrepreneur their product/idea sucks right to their face.

As for pricing, I've found that asking people "What do you think a fair and reasonable price for X would be?," followed by the follow-up as to why, is the best way to ask about pricing (in a qualitative setting, at least).

Re: How To Validate Your Business Idea By Testing A Hypothesis

#60

Post by wpietri »

tchock23 wrote: post #59
wpietri wrote: post #33

Earlier quoted context omitted.

That's not my experience; I now avoid asking hypotheticals because the results for me have been very unreliable. I'm certainly unreliable that way. There are a number of Kickstarters where I've said, "OMG I'd pay for that!" But if I come back to it a couple of days later, I'll never actually click on the signup button. I'm even worse with things like this in person. I don't like disappointing people, so I'll try hard…

Very good points here. The prevailing advice for entrepreneurs from folks like Steve Blank is that you must "get out of the building" and be physically in front of customers to interview them, but in my experience 95% of customers would never tell an entrepreneur their product/idea sucks right to their face. As for pricing, I've found that asking people "What do you think a fair and reasonable price for X would be?,"…

Thanks!

I think Blank is entirely right. But you have to be tricky.

At my last company we did user test every Tuesday afternoon. When seeking subjects, we looked like a research firm, not a product company. When they arrived, there was no company name on the door. The interviewer would start out asking about a variety of products to get a baseline; ours would just be one of several discussed. Eventually, because we spent more time on our stuff, maybe half the people figured out that one product was ours, but by then we generally had enough honest opinion.

Post reply on HN