[Advice] Idea Validation Methods

Hey guys!
My name is Tom, and I am a 23 year old software engineer and entrepreneur, I run a few profitable ecommerce sites, my latest being lowpriceice.com (which has a looooooong way to go).Take a look if you get a chance, I would love input. Disclaimer: I know the prices may seem high – I am A/B testing them.
I decided to write this post because I’ve seen many posts about idea validation lately, and I think that a lot of people are being hindered by the way they approach validation. I want to be clear: I am not talking about how you can come up with good ideas, only a few ways you can prove they are good.
One such post that was looking for guidance regarding validation spoke of “entrepreneurial ‘faith’” – an almost blind belief that your product will be successful. If that is faith, you want none of it. Companies are created to turn a profit, it is their explicit purpose of existence. If you can solve meaningful problems and improve lives along the way that’s phenomenal, but don’t confuse your existential purpose for your company’s. If your purpose setting out isn’t to make money, you’re not building a business, you’re building a charity.
Another popular, but insidious question is “Would you use this service?” It’s a natural place to start. The problem with this question is what people believe they would be willing to pay for is different from what they actually will pay for. People want to be supportive of creativity, which leads them to overestimate their desire for hypothetical products. This is not actionable feedback, it is emotional support.
A little about myself: I was exceptionally lucky to be born into an entrepreneurial family. My father is a successful ecommerce entrepreneur, and many of my close family also followed a similar path. Other kids grew up talking about sports with their parents, we talked about business. In a way, being an entrepreneur is in my DNA. Spending my high school years in Palo Alto, CA didn’t help – I was bitten by the bug.
I remember being 4 years old, sitting out front with my brother (6 at the time) one weekend and selling Pokémon calendars that we printed out from the internet, on plain printer paper, to kids and their parents headed to the park for $10 a pop (we were cute kids 😊).
Anyway – idea validation: At its core validation is about limiting your risk - finding out if your business model will work: while spending as little money and time as possible doing so. There are a few powerful techniques that are helpful in finding out whether your idea has legs. Luckily for lots of us indiehackers these are easy validation methods, and the results are actionable right away.
I firmly believe that with proper validation procedure you will never waste more than is necessary on any ideas that won’t pan out. Validation is the most important part of any early stage startup.
Without validation you will always be guessing. Often until you are ruined.
Without validation you will have a much harder time securing funding.
Most importantly without validation you can’t get information from prospects without building a product.
I believe (less firmly) that it is the most important aspect in any business. There is a reason that the prophets of profit always talk about MVPs and product market fit. The focus on those aspects is a lesson that a lot of successful business men paid dearly to learn. Luckily many of them told us their lessons so that our “tuition” costs are far lower than theirs.

My personal favorite way of validating ideas is to sell products before I create them. You can throw up a quick site on Shopify for free, buy a relevant domain or two for 20 dollars or less, and use your free $100 credit with AdWords through Shopify to drive traffic.
Now, before the web developers tear me limb from limb for using Shopify – think about it, most people don’t have a technical background. They either use a prebuilt solution or pay you to build their site. Set aside your self interest and I think you’ll find that ecommerce solutions are good enough for beginning a business. Particularly as computer scientists it’s hard to stomach “good enough”, we are taught that the project isn’t done if it isn’t optimal. The truth is that nothing is optimal the first time it’s built, but it can be “good enough.”
This seemed like a sleazy way to do business when I was first introduced to the concept. I think that is a natural response for a good entrepreneur: it’s your instinct that you have an obligation to your customer to provide value. If you think about it though, plenty of products are sold that way. Consulting, restaurants, construction, and even lots of software are all sold to customers sight unseen. If you give them their money back, you aren’t a crook. If you are still uncomfortable, give them a discount if you launch. Think of all the times you’ve been disappointed because a company ran out of the product you want.
All you were was disappointed, not angry, not on a vendetta, just a little disappointed. Then you switched tabs and forgot about it.

Another great way to validate an idea, but more difficult to do with software is to ship prototypes. If you represent it correctly and customers are willing to buy, you can begin working on manufacturing. Until that point, however, you are hemmed in with minimum order quantities, high fulfillment costs and uncertainty about ways to improve the product. Essentially when you go straight to manufacturing you get a bunch of sub-optimal, expensive prototypes that may not even sell.
That’s a lot more palatable to me, because the customers will get something more out of the transaction. If it takes off and I begin manufacturing and offer to send a free or discounted manufactured copy to the customers who got prototypes.

Validation is an important part of building your business. It is really hard to separate people from their money, and even harder to accurately estimate the amount of money you can make without real data. Worse than that, however, is the possibility of jumping straight into the deep end: you open yourself to risk on many levels. Even more than that it can burn you out and end your entrepreneurial experiments before they get a fair chance. The world direly needs more innovators, don’t let yourself fail to fill that need because you didn’t prepare well enough.

If you don’t think these ideas are up your alley, you can look at magazine companies’ product development strategies. They pioneered selling what they don’t have to evaluate the value of new niche magazines. There is a lot to learn from in other domains, especially those that have been around for a while.
I can go into greater depth – how to think about your marketing and business model – customer acquisition costs, etc if anyone wants, just let me know 😊