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If there's a common thread between endless startup failure stories, then it is "we talked to a bunch of people who said they'd spend money on this" and when pus

If there's a common thread between endless startup failure stories, then it is "we talked to a bunch of people who said they'd spend money on this" and when push came to shove said people didn't actually spend money. We're not failing, but even from a (modestly) successful startup perspective, the vast gulf between "people who like to talk to you as if they will spend real money" and "people who will actually spend money" is painfully apparent.

SurfScore 14y ago
I like to live by the motto: You never know if someone is willing to pay until you ask them to open their checkbook. The same theory can be applied to most investors. (pre-handshake protocol at least)
- ronyeh 14y ago
  So then... is Kickstarter the only true way to validate a startup idea? You throw up a cool pitch with some videos and vague promises, and watch the cash roll in. If the cash does indeed roll in, then it's a good idea! Then you get to work, and hope no one remembers in 6 months that you promised to deliver them some amazing gifts. :-)
  - hayksaakian 14y ago
    PPC + Landing page works wonders. Avoid the confirmation bias of your peers, and target people actively looking for your idea. Build a fake checkout that collects no data, and thank your 'paying' users for signing up to be notified when X goes on sale. (You should also probably tell them that no financial information was actually stored.)
    - d4nt 14y ago
      I'm sure this works for things which you might buy having only see the website (and maybe a few screenshots) but beyond a certain level of cost/complexity you actually need to have some real software for them to try before they'll pay.
    - k__ 14y ago
      I never been on such a website, but doesn't this make people angry? Or is the trick to do it also withe fake product and company name, so that you know it would work, but noone can hate you afterwards for lie to him? Kickstarter seems like a better approach, since everyone KNOWS there is no product to buy.
      - Kequc 14y ago
        I can't imagine being anything other than angry after filling out a payment form and then being told that there was no reason to have done that. On a new web application?
        dhimes 14y ago
        Although I consider the practice unethical, the other side would (does) argue: "Who cares? You are trying to get 20,000 customers and you pissed off 100 to get there." I still can't bring myself to do it, though.
        Kequc 14y ago
        You wouldn't really have any customers if you weren't accepting payments though, it would be more like you pissed off all of your potential customers just for a bit of market data.
        ihaveajob 14y ago
        This is advice Tim Ferriss actually gives in his first book. I generally agree with your sentiment.
    - jdaley 14y ago
      If I put my credit card number into a site and the next page said "actually this isn't real, and we promise we didn't save your card number", my next step would be to call my bank and cancel the card.
      - Felix21 14y ago
        That's funny and true.
      - JonnieCache 14y ago
        Surely the next step for a lot of us would be to devote an afternoon to bringing public misery upon the site operators. Don't take this advice, kids.
    - jyap 14y ago
      "Build a fake checkout" Are you serious? That's a criminal act called fraud. Please don't follow this advice. Just do something legal like having users sign up for a mailing list.
      - herval 14y ago
        I'm genuinely curious - if no money ever exchanges hands, how can this be classified as fraud?
        moheeb 14y ago
        This will probably seem obvious afterwards...but if you sign a contract with someone to provide a good or service for $0 and then fail to do so, that could be considered fraud.
        hayksaakian 14y ago
        You could put some sneaky stuff in a ToS in theory
    - ebbv 14y ago
      This is the worst advice I've ever seen on HN. Much better to have PPC + landing page and a "tell me when this is available" signup.
      - herval 14y ago
        Isn't this exactly what leads to the "a lot of people said they'd pay for it" false assumption? Not such a sound advice either...
        spiffytech 14y ago
        The distinction is your landing page is only found by people looking for the solution you want to offer. They've already decided they have a problem, and need to fix it. Contrast that with polling a random sample of your target demographic, where any number of things can spoil the results. People could say they like the idea just to be polite. People could have never thought about the problem you're solving before, but think it's neat. People can misjudge how much they care about it. People can have an enthusiastic initial reaction, but think the idea is dumb on further reflection. It's the same sort of problem with polling for election results: you can't ask a whole bunch of random people who they're going to vote for and turn the raw results into a pie chart. To get useful data, you have to carefully predict which of your respondents will actually turn up for the election, and which ones aren't going to change their mind between the time you poll them and voting day. And even then, in the end, it's not the pre-election polls that determine the new leader, it's the election itself. That distinction is what's being presented here; asking a bunch of people is only useful if you're very careful about filtering out the junk answers. You should instead measure people who have already decided, without your prompting, that they have a problem and have decided to seek out a solution for it.
Felix21 14y ago
The thing is, you cant really ask them for money too early or you'll be hearing NO too often for the wrong reasons... What you should be trying to find out is: 1. if they currently spend their money somewhere else to solve their problem 2. if your product is so much better at solving the problem, that they will want to switch.
- erikpukinskis 14y ago
  Yes you can, you can put up a page that describes the thing, and pretend it exists, and try to get someone to click the "let me put my credit card # in already!" button. One click, a single click will not destroy you brand. And OP would've realized that no matter even with their best shot they couldn't get 10 clicks. 10 disappointed non-customers won't destroy your brand.
  - alexloiz 14y ago
    Completely agree with your point. The problem is that the majority of first time founders are: (1) overly protective about their non-existent brand (2) afraid that they will not get any clicks (3) so attached to the idea that even if no one clicks, the design is to blame not the idea This leads into spending far too much time not iterating on a broken realization of an idea, insisting that "with time it'll work out" or "just a little further, we're gaining momentum", when evidence shows that the company is actually at its worst :P
  - Felix21 14y ago
    The problem is how do you learn from this? Okay i have a page and i HAVE to get people here with paid traffic like adwords because no one will write about my non-existent app. So now I get a bit of traffic but nobody clicks the buy button... Is it because i drew the wrong crowd? Is it because they don't know me? is it because adwords conversions are usually very low so do i need to pay for more traffic? If it actually is because my product sucks, then cool.. But what do i change? There is no way to know this; which is why i believe the buy button is not the way to go.... at the beginning. You can still do this before you start building, but it must be done after talking to at least a few customers. The traditional customer interviews are always the best way to start.
amirmc 14y ago
This story seems more like "If we build it, they will come."
mathattack 14y ago
The vast gap between talkers and doers.... In this article, in the end they contacted 1700 people only 1-10 were interested. That sounds more like the four standard deviation crazies who just want to be polite.
startupjerkfest 14y ago
can't get no satisfaction unless you take action! stop worrying about what might happen, and do experiments to see what does happen. ask people to buy and collect money. if they do, tell them it's not ready yet, do they want to wait, or do they want a refund? S I M P L E S ! @startupjerkfest
- bradhe 14y ago
  Has this tactic worked for you previously?

SurfScore 14y ago

I like to live by the motto: You never know if someone is willing to pay until you ask them to open their checkbook. The same theory can be applied to most investors. (pre-handshake protocol at least)

ronyeh 14y ago
So then... is Kickstarter the only true way to validate a startup idea? You throw up a cool pitch with some videos and vague promises, and watch the cash roll in. If the cash does indeed roll in, then it's a good idea! Then you get to work, and hope no one remembers in 6 months that you promised to deliver them some amazing gifts. :-)
- hayksaakian 14y ago
  PPC + Landing page works wonders. Avoid the confirmation bias of your peers, and target people actively looking for your idea. Build a fake checkout that collects no data, and thank your 'paying' users for signing up to be notified when X goes on sale. (You should also probably tell them that no financial information was actually stored.)
  - d4nt 14y ago
    I'm sure this works for things which you might buy having only see the website (and maybe a few screenshots) but beyond a certain level of cost/complexity you actually need to have some real software for them to try before they'll pay.
  - k__ 14y ago
    I never been on such a website, but doesn't this make people angry? Or is the trick to do it also withe fake product and company name, so that you know it would work, but noone can hate you afterwards for lie to him? Kickstarter seems like a better approach, since everyone KNOWS there is no product to buy.
    - Kequc 14y ago
      I can't imagine being anything other than angry after filling out a payment form and then being told that there was no reason to have done that. On a new web application?
      - dhimes 14y ago
        Although I consider the practice unethical, the other side would (does) argue: "Who cares? You are trying to get 20,000 customers and you pissed off 100 to get there." I still can't bring myself to do it, though.
        Kequc 14y ago
        You wouldn't really have any customers if you weren't accepting payments though, it would be more like you pissed off all of your potential customers just for a bit of market data.
        ihaveajob 14y ago
        This is advice Tim Ferriss actually gives in his first book. I generally agree with your sentiment.
  - jdaley 14y ago
    If I put my credit card number into a site and the next page said "actually this isn't real, and we promise we didn't save your card number", my next step would be to call my bank and cancel the card.
    - Felix21 14y ago
      That's funny and true.
    - JonnieCache 14y ago
      Surely the next step for a lot of us would be to devote an afternoon to bringing public misery upon the site operators. Don't take this advice, kids.
  - jyap 14y ago
    "Build a fake checkout" Are you serious? That's a criminal act called fraud. Please don't follow this advice. Just do something legal like having users sign up for a mailing list.
    - herval 14y ago
      I'm genuinely curious - if no money ever exchanges hands, how can this be classified as fraud?
      - moheeb 14y ago
        This will probably seem obvious afterwards...but if you sign a contract with someone to provide a good or service for $0 and then fail to do so, that could be considered fraud.
        hayksaakian 14y ago
        You could put some sneaky stuff in a ToS in theory
  - ebbv 14y ago
    This is the worst advice I've ever seen on HN. Much better to have PPC + landing page and a "tell me when this is available" signup.
    - herval 14y ago
      Isn't this exactly what leads to the "a lot of people said they'd pay for it" false assumption? Not such a sound advice either...
      - spiffytech 14y ago
        The distinction is your landing page is only found by people looking for the solution you want to offer. They've already decided they have a problem, and need to fix it. Contrast that with polling a random sample of your target demographic, where any number of things can spoil the results. People could say they like the idea just to be polite. People could have never thought about the problem you're solving before, but think it's neat. People can misjudge how much they care about it. People can have an enthusiastic initial reaction, but think the idea is dumb on further reflection. It's the same sort of problem with polling for election results: you can't ask a whole bunch of random people who they're going to vote for and turn the raw results into a pie chart. To get useful data, you have to carefully predict which of your respondents will actually turn up for the election, and which ones aren't going to change their mind between the time you poll them and voting day. And even then, in the end, it's not the pre-election polls that determine the new leader, it's the election itself. That distinction is what's being presented here; asking a bunch of people is only useful if you're very careful about filtering out the junk answers. You should instead measure people who have already decided, without your prompting, that they have a problem and have decided to seek out a solution for it.

Felix21 14y ago

The thing is, you cant really ask them for money too early or you'll be hearing NO too often for the wrong reasons... What you should be trying to find out is: 1. if they currently spend their money somewhere else to solve their problem 2. if your product is so much better at solving the problem, that they will want to switch.

erikpukinskis 14y ago
Yes you can, you can put up a page that describes the thing, and pretend it exists, and try to get someone to click the "let me put my credit card # in already!" button. One click, a single click will not destroy you brand. And OP would've realized that no matter even with their best shot they couldn't get 10 clicks. 10 disappointed non-customers won't destroy your brand.
- alexloiz 14y ago
  Completely agree with your point. The problem is that the majority of first time founders are: (1) overly protective about their non-existent brand (2) afraid that they will not get any clicks (3) so attached to the idea that even if no one clicks, the design is to blame not the idea This leads into spending far too much time not iterating on a broken realization of an idea, insisting that "with time it'll work out" or "just a little further, we're gaining momentum", when evidence shows that the company is actually at its worst :P
- Felix21 14y ago
  The problem is how do you learn from this? Okay i have a page and i HAVE to get people here with paid traffic like adwords because no one will write about my non-existent app. So now I get a bit of traffic but nobody clicks the buy button... Is it because i drew the wrong crowd? Is it because they don't know me? is it because adwords conversions are usually very low so do i need to pay for more traffic? If it actually is because my product sucks, then cool.. But what do i change? There is no way to know this; which is why i believe the buy button is not the way to go.... at the beginning. You can still do this before you start building, but it must be done after talking to at least a few customers. The traditional customer interviews are always the best way to start.

amirmc 14y ago

This story seems more like "If we build it, they will come."

mathattack 14y ago

The vast gap between talkers and doers.... In this article, in the end they contacted 1700 people only 1-10 were interested. That sounds more like the four standard deviation crazies who just want to be polite.

startupjerkfest 14y ago

can't get no satisfaction unless you take action! stop worrying about what might happen, and do experiments to see what does happen. ask people to buy and collect money. if they do, tell them it's not ready yet, do they want to wait, or do they want a refund? S I M P L E S ! @startupjerkfest

bradhe 14y ago
Has this tactic worked for you previously?