How to validate your business idea

Ideas are cheap. Ideas are easy. Ideas are common. Everybody has ideas. Ideas are highly, highly overvalued. Execution is all that matters. – Casey Neistat

A way to validate

Everyone can validate an idea on the viability of it before writing a single line of code, or even before the question: “how do we find a CTO”. It’s pretty easy to draft up a Value Proposition to validate. There are multiple ways to validate, but one is using landing pages.

Disposable Branding

I call it “validate your business idea with disposable branding. It is setting up a landing with a brand/logo that isn’t your current branding / name. Just think of an ok name, register the TLD .site or .top (now $0.88 on NameCheap) and go to Fiverr, pay $5-$10 for a logo. Go to Strikingly, Wix, Launchrock, Squarespace or maybe even just a Google doc, point the domain to it and build a page with your value proposition and a “pay now” button. Create a Google Adwords campaign and drive traffic to the domain. Start sharing the link on social media and (with respect to communities) on forums and Facebook pages that reflects the target audience. And then see how much people make the BUY decision. 

Pay Now

The “BUY” decision is important

It’s important the button says something like “BUY”, because that’s the closest you get besides actually taking money from people, something you can do as soon as you validated your initial value proposition. It will only sign-up the person to your actual email list (standard functionality in most landing page providers) but it validates more than just a “here-is-my-mail-address-send-me-an-email-as-soon-as-you-launch” button. People actually make the buy decision when filling out there details. Change the standard “Thank you for signing up for our newsletter” confirmation page to a “Thank you for your interest, we have not launched yet, but will email you as soon as we do”-ish text. The emails you get from this are hot leads, save them for later on an email: “you signed up for XXX, they didn’t make it, but we, YYY, did, sign up now!”


Measure the spend money on Adwords and how many people sign up from that, a great way to calculate your CAC (Customer Acquisition Costs), and Conversion rates, just be sure you don’t dilute the metrics with the organic traffic from the social media and forums. These metrics are important for your CLV (Customer Lifetime Value). More on that calculation in this blogpost from Stephen Forte:

So if your conversion rate is below the assumption of 5%, dispose of your branding and domain name, iterate your value proposition and try it all over again with a different branding in the same target audience group. You could reuse a “previous” branding in another target audience group that you didn’t address yet.

What’s next?

The learings you get from this are still not “Investor Ready” but at least you have some more data to work with while building an MVP and your actual value proposition to your customer segment. 
The next step could be to “go out of the building!” to validate your iterated value proposition with people in real live.

Happy validating!

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