6 ms·

Validate your startup idea by asking 3 simple questions

97 points by paraschopra 15y ago

revorad 15y ago
I like PG's analogy for the first two points - think of your product as a rectangle. One side is how much it improves people's lives (value) and the other is how many people use it (market). The bigger the rectangle, the more valuable your startup. For some products which have high social value, increase in one automatically leads to increase in the other. The last one (having fun) may seem tangential, but in my experience can have a big positive impact on no.1. It's so much easier to keep pushing hard when it's fun. Edit: See point 4 - http://paulgraham.com/13sentences.html http://paulgraham.com/13sentences.html
- paraschopra 15y ago
  Wow, never thought of this rectangle analogy. It makes so much sense. Value*Addressable_Market = How good a startup idea is.
  - davidw 15y ago
    "How good an idea is" should also take into account your ability to do something with it. A small rectangle that you can dominate may well be better than chasing after something huge where you don't really have a way to attack it.
- cperciva 15y ago
  Side note about the first axis: When you measure how much you're improving people's lives, remember to look at how much you're improving them compared to if people used the best available alternative, not compared to nothing at all. The main selling points for Tarsnap are that it's secure and easily scriptable; for most people those are far less important than "having backups will prevent data loss", but that last property is something which any good backups would provide, so it's part of the ignored baseline.
  - revorad 15y ago
    I disagree. You only have to compare your product to what prospective users are currently using. For a lot of products, the most common answers are nothing, email and Excel. It's hard for technical founders to accept that people may choose your product for reasons other than it's the "best". For the user the only delta that matters is quality of life before and after using your product, even if there are ten better products out there.
    - paraschopra 15y ago
      What you are saying is that market doesn't generally have perfect knowledge about alternatives available. How aware is a market depends on what kind of market it is.
sjwright 15y ago
Whenever someone tells me about their amazing new idea that will completely overhaul an industry or transform a marketplace, I usually have one question for them: What will stop your competitors (established or following) from taking your idea and doing it (or marketing it) better? Answers I tend to accept are: * Because I love this product and even if a competitor tries to compete, I'll remain three steps ahead of them at all times * They won't believe it'll work until it's too late * There's a lot of technology behind this, and it'd take a year to simply replicate the functionality -- let alone understand what parts of it matter * The product benefits (at least in part) from being distanced from an established player * We have a really good patent! Answers I usually get are: * Umm... * Ahh... * Because we're awesome!
- Swizec 15y ago
  >> There's a lot of technology behind this, and it'd take a year to simply replicate the functionality -- let alone understand what parts of it matter Interesting anecdote: I used to have this answer in a startup of mine, it really impressed everyone, except people who were good technologist. Most of them knew that this is code for "I don't really know what I'm doing it, but it's complicated and looks like it kind of works when you ignore half the variables" The problem was that even I didn't realize this until much later when one day I looked at the tech I produced and thought "What the fuck is wrong with me!? This is much too complex. Why would I ever do this to myself?" When talking to a tech person, the only answer you should look for is "Y'know, I'm really worried. This tech is so simple, ten year olds could code this in their sleep ...". tl;dr -> a tech guy who describes their tech as "complex/advanced/superawesome" is out of their depth. It should feel scarily trivial to them.
  - paraschopra 15y ago
    Right, I have never believed that technology per se can be a competitive advantage. If a technically competent company (say Google, LinkedIn, Facebook, etc.) decides to replicate your technology, they can. But the key question here is "if" they decide to. Many companies are usually so consumed by their own problems, that they seldom care about copying your new startup's technology. But in any case, as a startup you need to have differentiators apart from technology. It can be your maniacal customer support, your ability to persuade bloggers to write about you, your ninja like SEO skills or even your geographical/vertical focus in market.
mbesto 15y ago
Great questions - but they are by no means simple.
- paraschopra 15y ago
  Well, the answers are definitely not simple but the questions are quite simple in my opinion.
mgkimsal 15y ago
Nothing wrong with asking these questions, but my experience has been that most people do not know how to judge their situations to answer honestly, anyway. I've talked to a number of people in startup-phase over the last year, and always ask variations of these questions, and when one with a hard answer comes up, I typically get something like "you're a downer", "you're too negative", "you don't understand the market", etc. Or variations of "just do XYZ!", where XYZ, realistically, has been tried by dozens of parties before, resulting in them losing loads of money and leaving the market altogether. Inevitably, we end up reading stories from people here every few months with a spin on "startups are hard. however hard you think it will be, multiply that by 10. etc". And they're right. Whether those people have succeeded or failed, they blog about how hard everything is. We see stories about "I thought XYZ would take me $t and $o weeks, but it was much longer/harder/difficult than I could have imagined". One might conclude that anyone who actually had real numbers behind how much time and effort an idea would take to bring to market, no one would, and one might be right. But just asking the questions designed to get people to think about these sorts of things generally doesn't help people too much - at least in my experience. Might just be the people I talk to, but many of them seem to be more in love with the idea of "startup!" rather than actually building a business around providing value, especially if that business/value doesn't look/sound/feel exactly like the idea in their head from 6 months earlier (in "lean startup terminology", they're not open to "pivot", probably).
- paraschopra 15y ago
  My experience has been different. If a person is in maniacal love with an idea (not not the business), then of course my entire post is irrelevant. It is only applicable if the person him/herself wants an honest introspection of whether what they are doing is right or not. A founder puts in a lot of effort into an idea and the gets disappointed when entire world ignores that idea. Instead of getting generally frustrated or feeling disoriented, asking these simple questions can at least provide a direction to the founder.
  - mgkimsal 15y ago
    If they've not asked these questions of themselves during the first few weeks, that's fine. If they've not asked themselves these questions in the first 3-6 months of work, there's problems. Whether or not they've asked these questions can usually be found in some sort of action plan they're working. I don't care if it's 10 words on a whiteboard or a 10 page 'business plan' - it generally shows they've thought about market size, steps to reach the market, potential value, etc. Someone external to them asking these questions might help reorient their thinking, but if someone's capable of going months long in to something without the capability of doing some of their own introspection, they've got bigger problems than just this particular startup/project. We may have worked with different people (likely very true), but this has been my own experience. There's 5 startups I've talked to over the last year beyond just a cup of coffee style meetings - multiple meetings, talking financials, markets, plans, code, etc. Only 2 had real plans that they were executing - the other 3 kept digging in their heels insisting I didn't "get it" or similar reactions.
DanielBMarkham 15y ago
I didn't like this, and I'm struggling with how to explain it. After all, these are excellent and insightful questions. I think the reason is that people are unable to answer these questions -- it's the type of question that can only easily be answered by an outsider, or by somebody two years after their startup idea didn't work. So while the questions themselves may be very good -- perhaps as a way to help your friends -- asking them to yourself doesn't seem very worthwhile. Especially troubling was the one about loving what you're doing. The more infatuated you are with some idea of yours, the worse off you are. A better question might be whether or not you can stick it out for the years necessary for things to happen. Yes, if you love something that's all great, but reality distortion fields are not so fun to live in when the world is tremendously apathetic to your cause. A character that can work hard and pivot on something they logically feel might work is much more desired, in my opinion, than simple "love what you do". My dog loves fetching sticks. It really doesn't add that much value. Having said that, you should love the value you provide -- the part about people wanting what you make. But that's just being a good person. I don't know. I'm sorry to be so critical. The article just didn't sit well with me. I'm sticking with "Make something people want that scales easily." I can derive questions from that starting point.
- mbesto 15y ago
  I raised the same sentiment in my comment (below). First, there isn't 3 questions. It's technically about 6 questions, with a statement thrown in there. Second, the answers are by no means simple. I (possibly like you) was expecting three straight forward questions that were a silver bullet to understanding how to validate my start-up idea. Thought-provoking perspective, possibly... differentiated from the validation that the lean start-up promises, not really.
- paraschopra 15y ago
  Perhaps you are right that, being a new startup founder, asking these questions to yourself may not help a lot. But I have no easy way to know that. Only someone who is new and is currently evaluating his startup idea can give me that feedback. In fact, I would love to have that kind of feedback. But from my limited sample size of interaction with 4-5 new founders, I think the framework I laid out helped them get at least some clarity. Maybe that was because I asked them questions, or maybe it was because of questions themselves.
billpatrianakos 15y ago
These questions are fine and all but they're not the ones to ask if you want to validate your idea. If you want validation you ask other people what they think of the idea, is it useful, would they pay, if they have the problem you're trying to solve. Asking yourself these questions will only get you twisting your answers to be "correct". Point is, it doesn't matter what you think, it matters what your market thinks. Extra points if you can identify that market.
SMrF 15y ago
Question 2: Do you think there is big enough market for the service AND the market is easy to reach (without spending bootloads of money)? Isn't figuring out how to convert your market into customers without going broke the definition of the startup process? I think the answer to this question must be "I don't know, working on it" or you're probably delusional.
- paraschopra 15y ago
  My take on startups is little different. I like to believe that customers are already there, you just need to find them. Converting market into customers sounds like you need to "create" and "educate" a market which can be very hard.
mansolo 15y ago
Pick something you love to do. If there is market demand for it, you've validated your idea. Still, there are no guarantees, but it's that easy.
diego 15y ago
I see this more as an INvalidation test. Answering yes to those questions doesn't mean anything. Answering no to any of them is a bad sign. However, that's not very insightful.
robomartin 15y ago
Apply those questions to companies such as Google, Facebook, eBay, Amazon, etc. and you'll reveal the futility of using three simple questions (or a dozen) to judge the value of a startup or an idea. When doing this you have to mentally rewind to the period in time when they were founded and let go of the knowledge you have about the environment as it exists today. I think there's only one way: Startup: Build -> Measure -> Adjust -> Iterate. Failure: Pivot -> Try again. Attitude: Never give up. When you succeed, write a really insightful blog post telling everyone how just three questions gave you the formula to create your instant success.
- paraschopra 15y ago
  "Never give up" attitude can be pretty devastating, I would honestly never recommend that to anyone. Moreover, most startups never become Google or Facebook. They are extreme cases and hence should be seen as such.
  - robomartin 15y ago
    "Never give up" doesn't mean that you stay with a failed idea or business. It means that failure doesn't take you down. You learn from the failure and move on. The vast majority of entrepreneurs fail far more often than succeed.
marshallp 15y ago
There are rock-solid ways to find out if your idea is viable. Create indiegogo campaigns send emails to discussion forums and customers. If your idea is needed, people will give you money. Create websites asking for sale. If people click to purchase, you have a viable idea. Asking the right question is most the battle, not answering it.
ggwicz 15y ago
Validate it by making it and putting a price on it. If people are willing to pay actual money for it, the idea is valid. If not, the idea is not.
civilian 15y ago
I'm getting a 509 "bandwidth exceeded". Can anyone copy/paste the content?
crazygringo 15y ago
"Bandwidth Limit Exceeded" Google doesn't have it cached. Does anyone have a mirror?
- espinchi 15y ago
  It is actually cached: http://webcache.googleusercontent.com/search?q=cache:0eRMUuc1LhIJ:paraschopra.com/blog/entrepreneurship/validate-startup-idea.htm+site:http://paraschopra.com/blog/entrepreneurship/validate-startup-idea.htm&cd=1&hl=en&ct=clnk&gl=fr http://webcache.googleusercontent.com/search?q=cache:0eRMUuc... What I usually do is to find the cached version is (using this as an example) write "site:site:paraschopra.com/blog/entrepreneurship/validate-startup-idea.htm" in Google. The cached version appears in the right when you hover on the ">>" arrow.
Void_ 15y ago
Mirror link: http://webcache.googleusercontent.com/search?sclient=psy-ab&hl=sk&client=safari&rls=en&source=hp&q=cache%3Ahttp%3A%2F%2Fparaschopra.com%2Fblog%2Fentrepreneurship%2Fvalidate-startup-idea.htm&pbx=1&oq=cache%3Ahttp%3A%2F%2Fparaschopra.com%2Fblog%2Fentrepreneurship%2Fvalidate-startup-idea.htm&aq=f&aqi=&aql=&gs_sm=3&gs_upl=19071l19596l0l19728l6l5l0l0l0l4l188l612l0.4l5l0 http://webcache.googleusercontent.com/search?sclient=psy-ab&...
jjcm 15y ago
Question #0 - Will I be able to handle the bandwidth?
- paraschopra 15y ago
  I'm guilty sir! It should be up now :)
boubountu 15y ago
Those questions are valid if someone is trying to build the next Facebook. However, I think a person should work on important problems (not necessary hard, but important). And most importantly to like your work to reach a flow state.

97 points by paraschopra 15y ago

I like PG's analogy for the first two points - think of your product as a rectangle. One side is how much it improves people's lives (value) and the other is how many people use it (market). The bigger the rectangle, the more valuable your startup. For some products which have high social value, increase in one automatically leads to increase in the other. The last one (having fun) may seem tangential, but in my experience can have a big positive impact on no.1. It's so much easier to keep pushing hard when it's fun. Edit: See point 4 - http://paulgraham.com/13sentences.html http://paulgraham.com/13sentences.html

paraschopra 15y ago
Wow, never thought of this rectangle analogy. It makes so much sense. Value*Addressable_Market = How good a startup idea is.
- davidw 15y ago
  "How good an idea is" should also take into account your ability to do something with it. A small rectangle that you can dominate may well be better than chasing after something huge where you don't really have a way to attack it.
cperciva 15y ago
Side note about the first axis: When you measure how much you're improving people's lives, remember to look at how much you're improving them compared to if people used the best available alternative, not compared to nothing at all. The main selling points for Tarsnap are that it's secure and easily scriptable; for most people those are far less important than "having backups will prevent data loss", but that last property is something which any good backups would provide, so it's part of the ignored baseline.
- revorad 15y ago
  I disagree. You only have to compare your product to what prospective users are currently using. For a lot of products, the most common answers are nothing, email and Excel. It's hard for technical founders to accept that people may choose your product for reasons other than it's the "best". For the user the only delta that matters is quality of life before and after using your product, even if there are ten better products out there.
  - paraschopra 15y ago
    What you are saying is that market doesn't generally have perfect knowledge about alternatives available. How aware is a market depends on what kind of market it is.

sjwright 15y ago

Whenever someone tells me about their amazing new idea that will completely overhaul an industry or transform a marketplace, I usually have one question for them: What will stop your competitors (established or following) from taking your idea and doing it (or marketing it) better? Answers I tend to accept are: * Because I love this product and even if a competitor tries to compete, I'll remain three steps ahead of them at all times * They won't believe it'll work until it's too late * There's a lot of technology behind this, and it'd take a year to simply replicate the functionality -- let alone understand what parts of it matter * The product benefits (at least in part) from being distanced from an established player * We have a really good patent! Answers I usually get are: * Umm... * Ahh... * Because we're awesome!

Swizec 15y ago
>> There's a lot of technology behind this, and it'd take a year to simply replicate the functionality -- let alone understand what parts of it matter Interesting anecdote: I used to have this answer in a startup of mine, it really impressed everyone, except people who were good technologist. Most of them knew that this is code for "I don't really know what I'm doing it, but it's complicated and looks like it kind of works when you ignore half the variables" The problem was that even I didn't realize this until much later when one day I looked at the tech I produced and thought "What the fuck is wrong with me!? This is much too complex. Why would I ever do this to myself?" When talking to a tech person, the only answer you should look for is "Y'know, I'm really worried. This tech is so simple, ten year olds could code this in their sleep ...". tl;dr -> a tech guy who describes their tech as "complex/advanced/superawesome" is out of their depth. It should feel scarily trivial to them.
- paraschopra 15y ago
  Right, I have never believed that technology per se can be a competitive advantage. If a technically competent company (say Google, LinkedIn, Facebook, etc.) decides to replicate your technology, they can. But the key question here is "if" they decide to. Many companies are usually so consumed by their own problems, that they seldom care about copying your new startup's technology. But in any case, as a startup you need to have differentiators apart from technology. It can be your maniacal customer support, your ability to persuade bloggers to write about you, your ninja like SEO skills or even your geographical/vertical focus in market.

mbesto 15y ago

Great questions - but they are by no means simple.

paraschopra 15y ago
Well, the answers are definitely not simple but the questions are quite simple in my opinion.

mgkimsal 15y ago

Nothing wrong with asking these questions, but my experience has been that most people do not know how to judge their situations to answer honestly, anyway. I've talked to a number of people in startup-phase over the last year, and always ask variations of these questions, and when one with a hard answer comes up, I typically get something like "you're a downer", "you're too negative", "you don't understand the market", etc. Or variations of "just do XYZ!", where XYZ, realistically, has been tried by dozens of parties before, resulting in them losing loads of money and leaving the market altogether. Inevitably, we end up reading stories from people here every few months with a spin on "startups are hard. however hard you think it will be, multiply that by 10. etc". And they're right. Whether those people have succeeded or failed, they blog about how hard everything is. We see stories about "I thought XYZ would take me $t and $o weeks, but it was much longer/harder/difficult than I could have imagined". One might conclude that anyone who actually had real numbers behind how much time and effort an idea would take to bring to market, no one would, and one might be right. But just asking the questions designed to get people to think about these sorts of things generally doesn't help people too much - at least in my experience. Might just be the people I talk to, but many of them seem to be more in love with the idea of "startup!" rather than actually building a business around providing value, especially if that business/value doesn't look/sound/feel exactly like the idea in their head from 6 months earlier (in "lean startup terminology", they're not open to "pivot", probably).

paraschopra 15y ago
My experience has been different. If a person is in maniacal love with an idea (not not the business), then of course my entire post is irrelevant. It is only applicable if the person him/herself wants an honest introspection of whether what they are doing is right or not. A founder puts in a lot of effort into an idea and the gets disappointed when entire world ignores that idea. Instead of getting generally frustrated or feeling disoriented, asking these simple questions can at least provide a direction to the founder.
- mgkimsal 15y ago
  If they've not asked these questions of themselves during the first few weeks, that's fine. If they've not asked themselves these questions in the first 3-6 months of work, there's problems. Whether or not they've asked these questions can usually be found in some sort of action plan they're working. I don't care if it's 10 words on a whiteboard or a 10 page 'business plan' - it generally shows they've thought about market size, steps to reach the market, potential value, etc. Someone external to them asking these questions might help reorient their thinking, but if someone's capable of going months long in to something without the capability of doing some of their own introspection, they've got bigger problems than just this particular startup/project. We may have worked with different people (likely very true), but this has been my own experience. There's 5 startups I've talked to over the last year beyond just a cup of coffee style meetings - multiple meetings, talking financials, markets, plans, code, etc. Only 2 had real plans that they were executing - the other 3 kept digging in their heels insisting I didn't "get it" or similar reactions.

DanielBMarkham 15y ago

I didn't like this, and I'm struggling with how to explain it. After all, these are excellent and insightful questions. I think the reason is that people are unable to answer these questions -- it's the type of question that can only easily be answered by an outsider, or by somebody two years after their startup idea didn't work. So while the questions themselves may be very good -- perhaps as a way to help your friends -- asking them to yourself doesn't seem very worthwhile. Especially troubling was the one about loving what you're doing. The more infatuated you are with some idea of yours, the worse off you are. A better question might be whether or not you can stick it out for the years necessary for things to happen. Yes, if you love something that's all great, but reality distortion fields are not so fun to live in when the world is tremendously apathetic to your cause. A character that can work hard and pivot on something they logically feel might work is much more desired, in my opinion, than simple "love what you do". My dog loves fetching sticks. It really doesn't add that much value. Having said that, you should love the value you provide -- the part about people wanting what you make. But that's just being a good person. I don't know. I'm sorry to be so critical. The article just didn't sit well with me. I'm sticking with "Make something people want that scales easily." I can derive questions from that starting point.

mbesto 15y ago
I raised the same sentiment in my comment (below). First, there isn't 3 questions. It's technically about 6 questions, with a statement thrown in there. Second, the answers are by no means simple. I (possibly like you) was expecting three straight forward questions that were a silver bullet to understanding how to validate my start-up idea. Thought-provoking perspective, possibly... differentiated from the validation that the lean start-up promises, not really.
paraschopra 15y ago
Perhaps you are right that, being a new startup founder, asking these questions to yourself may not help a lot. But I have no easy way to know that. Only someone who is new and is currently evaluating his startup idea can give me that feedback. In fact, I would love to have that kind of feedback. But from my limited sample size of interaction with 4-5 new founders, I think the framework I laid out helped them get at least some clarity. Maybe that was because I asked them questions, or maybe it was because of questions themselves.

billpatrianakos 15y ago

These questions are fine and all but they're not the ones to ask if you want to validate your idea. If you want validation you ask other people what they think of the idea, is it useful, would they pay, if they have the problem you're trying to solve. Asking yourself these questions will only get you twisting your answers to be "correct". Point is, it doesn't matter what you think, it matters what your market thinks. Extra points if you can identify that market.

SMrF 15y ago

Question 2: Do you think there is big enough market for the service AND the market is easy to reach (without spending bootloads of money)? Isn't figuring out how to convert your market into customers without going broke the definition of the startup process? I think the answer to this question must be "I don't know, working on it" or you're probably delusional.

paraschopra 15y ago
My take on startups is little different. I like to believe that customers are already there, you just need to find them. Converting market into customers sounds like you need to "create" and "educate" a market which can be very hard.

mansolo 15y ago

Pick something you love to do. If there is market demand for it, you've validated your idea. Still, there are no guarantees, but it's that easy.

diego 15y ago

I see this more as an INvalidation test. Answering yes to those questions doesn't mean anything. Answering no to any of them is a bad sign. However, that's not very insightful.

robomartin 15y ago

Apply those questions to companies such as Google, Facebook, eBay, Amazon, etc. and you'll reveal the futility of using three simple questions (or a dozen) to judge the value of a startup or an idea. When doing this you have to mentally rewind to the period in time when they were founded and let go of the knowledge you have about the environment as it exists today. I think there's only one way: Startup: Build -> Measure -> Adjust -> Iterate. Failure: Pivot -> Try again. Attitude: Never give up. When you succeed, write a really insightful blog post telling everyone how just three questions gave you the formula to create your instant success.

paraschopra 15y ago
"Never give up" attitude can be pretty devastating, I would honestly never recommend that to anyone. Moreover, most startups never become Google or Facebook. They are extreme cases and hence should be seen as such.
- robomartin 15y ago
  "Never give up" doesn't mean that you stay with a failed idea or business. It means that failure doesn't take you down. You learn from the failure and move on. The vast majority of entrepreneurs fail far more often than succeed.

marshallp 15y ago

There are rock-solid ways to find out if your idea is viable. Create indiegogo campaigns send emails to discussion forums and customers. If your idea is needed, people will give you money. Create websites asking for sale. If people click to purchase, you have a viable idea. Asking the right question is most the battle, not answering it.

ggwicz 15y ago

Validate it by making it and putting a price on it. If people are willing to pay actual money for it, the idea is valid. If not, the idea is not.

civilian 15y ago

I'm getting a 509 "bandwidth exceeded". Can anyone copy/paste the content?

crazygringo 15y ago

"Bandwidth Limit Exceeded" Google doesn't have it cached. Does anyone have a mirror?

espinchi 15y ago
It is actually cached: http://webcache.googleusercontent.com/search?q=cache:0eRMUuc1LhIJ:paraschopra.com/blog/entrepreneurship/validate-startup-idea.htm+site:http://paraschopra.com/blog/entrepreneurship/validate-startup-idea.htm&cd=1&hl=en&ct=clnk&gl=fr http://webcache.googleusercontent.com/search?q=cache:0eRMUuc... What I usually do is to find the cached version is (using this as an example) write "site:site:paraschopra.com/blog/entrepreneurship/validate-startup-idea.htm" in Google. The cached version appears in the right when you hover on the ">>" arrow.

Void_ 15y ago

Mirror link: http://webcache.googleusercontent.com/search?sclient=psy-ab&hl=sk&client=safari&rls=en&source=hp&q=cache%3Ahttp%3A%2F%2Fparaschopra.com%2Fblog%2Fentrepreneurship%2Fvalidate-startup-idea.htm&pbx=1&oq=cache%3Ahttp%3A%2F%2Fparaschopra.com%2Fblog%2Fentrepreneurship%2Fvalidate-startup-idea.htm&aq=f&aqi=&aql=&gs_sm=3&gs_upl=19071l19596l0l19728l6l5l0l0l0l4l188l612l0.4l5l0 http://webcache.googleusercontent.com/search?sclient=psy-ab&...

jjcm 15y ago

Question #0 - Will I be able to handle the bandwidth?

paraschopra 15y ago
I'm guilty sir! It should be up now :)

boubountu 15y ago

Those questions are valid if someone is trying to build the next Facebook. However, I think a person should work on important problems (not necessary hard, but important). And most importantly to like your work to reach a flow state.