Your idea is the cornerstone of your startup. If the idea is great, you can build a successful business with strategic thinking. However, if your cornerstone is unstable, the ensuing stages may bring unresolvable obstacles.

As we discussed in our previous article, an idea will make a stable foundation of a B2B startup if it intends to solve a top priority problem of your target market. Consequently, solution isn’t the first thing to be validated. As a start it’s better to ascertain that the problem you’d like to tackle truly exists, and that it is significant enough for your future clients to invest in a solution.

Such a task can hardly be done with the many tricks circulating on the internet, promising validation and lead generation at the same time. The most often mentioned example is a landing page put together in an hour, treating a subscription as a proof of strong demand for your planned product or service. It’s needless to explain why you will end up with false positive results if you base your startup on the number of collected email addresses considering how many times you subscribe when you don’t necessarily intend to buy.

At an early stage, the most classic validation method, interview, is unavoidable. That’s why we don’t claim to offer magical shortcuts in this article. Instead, we compiled the preliminary steps and catches of conducting a validation interview – which we divided into two blog entries for the sake of digestibility. Today you can read about the necessary steps leading to the interview. Next time we’ll make suggestions on what questions to ask and how to ask them, we’ll discuss how to analyze answers to be able to base your startup decision on reliable results.

Step 1: Define the Problem

Seriously, you need to have a precise definition of the problem you want to solve. It’s essential not to think in terms of a solution at this point. If you’ve done so, it’s time to translate your solution into a problem (you read it right).

For example, if you dream of developing an ATS specially designed for Generation Y and Z, you assume that there are companies or recruitment agencies who struggle to reach and employ members of said generations.

In case you envisioned a platform where small businesses with diverse profiles can find each other and apply together to new, grander projects, the assumed problem is that small businesses find it hard to gain new projects as they can manage only certain parts of the required tasks. In this case, both parts of the statement must be validated: 1) there is a segment where small businesses find it hard to gain new projects and 2) they don’t win projects because they can manage only parts of the whole due to their company profile and size.

Step 2: List Potential Market Segments

To validate your freshly defined problem, you need to know whom to speak to, who may have the problem you intend to solve – i.e., whom you should target with your product or service. We’ve found Bram Krommenhoek’s article a great help in finding the desired market segment (we’ll mention this article now and again, as we do put a lot of stock in the process defined by Krommenhoek).

First of all, list all the segments that face the problem you’ve hypothesized. If you are considering the above-mentioned Generation Y&Z ATS, your list might include recruiting agencies, student job recruiters, segments suffering from shortage of labor, or businesses who target younger generations (such as an insurance company that focuses on young adults, therefore wishes to employ from this age-group for relatability).

It’s also possible that you’ve discovered a very specific niche in the market within your own domain, therefore your focus segment is a given. In this case you may jump to step four. Alternatively, you may do some brainstorming, and with some abstraction try to find other segments that can face similar problems. (For instance, if you are a UI designer who faces daily difficulties due to the lack of a robust platform for collaboration with other experts, you may search for another field where working together on a visual project is primordial. In the end, you may jot down architects, mechanical and HVAC engineers as a prospective segment.) At the end of the day, you may have gained a Plan B in case the originally targeted market turns out to be hard to crack. If you succeed with Plan A, you can still use the idea for expanding the reach of your product or service.

Step 3: Decide Whom to Start With

If you listed potential market segments for your startup, you can use Bram Krommenhoek’s method to define the best candidate for validation. Create a chart where you evaluate each segment considering the 5 aspects described below. You may use a scale of 1-3 (or if you want a bit more elaborate result, you can use a 1-5 scale) to indicate how a segment performs in the given aspect. After multiplying the aspect scores, you may choose to get going with the segment that has the highest score. These are the aspects to consider:

Size

Estimate the size of the segment. It’s not necessary to spend hours with this task, or to purchase pricey market research. A fairly quick internet research (using reliable sources) should suffice at this stage. Mark the segment with the lowest score if it’s small, and with the highest score if you judge it to be huge.

Ability and Willingness to Invest

Use reliable public-domain articles that summarize results of market research to understand the availability of capital and investor sentiments in a given segment. If you know someone from the field, you might want to ask them for their insight.

Note

If a segment scored low in both the first and second aspects based on quite certain information, it is unlikely to provide the growth potential essential for a startup. If your problem exists and is a top priority in this segment, you can still start a company that offers a solution, but don’t build it as a startup.
Accessibility

You also need to consider the accessibility of the segment. This aspect includes questions like how difficult it is to approach the companies of this segment, how easy and quick it is to sell to them, how long the typical decision cycle is, and how willing they are to adopt a new solution. When you decide on the points this aspect receives, you may take into account your connections to this segment, if you need to start building relations from the basics or you have access to some of the decision makers. You may want to take a quick glimpse at the competition as well (do they exist, how established their presence is).

How Do You Feel About the Segment?

Your feelings about working with the market segment also matter, as you plan to spend a lot of time with it during the upcoming years. When considering your fondness of the domain, you may also think about your experience and knowledge about the given field. It’s usually easier to work with something you understand and you are eager to learn more about.

Proof

The final rating concerns how sure you are about the existence of the problem and its importance in the given segment – do you already have some proof or are you just guessing? If you are motivated to create a solution because you – as a member of the segment under consideration – are struggling with a problem, which is also often mentioned in professional conferences or during discussions with fellow experts, you are likely to be on the right track. It’s also a good sign if your friends from the segment have spontaneously mentioned the problem more than once.

Step 4: Find Subjects for Your Interview

When you’ve figured out which segment to start with, it’s time to find people to talk to.

But Where?

It seems to be quite a straightforward approach to interview people you know provided that you have friends or acquaintances from the chosen segment. Nonetheless, validation will give you reliable results only if you ask people who haven’t heard about your idea yet. This is an essential criterion to consider when you chose subjects for a validation interview from your acquaintance pool.

If you need or want to venture beyond the familiar realm, you can rely on social media. LinkedIn is ideal for making professional contacts while you can search people by profession or domain. You can also ask for help in thematic Facebook, reddit or Meetup groups.

And How?

No matter whether you to talk to friends or strangers, you shouldn’t let the cat out of the bag. Contrary to the suggestion of Bram Krommenhoek, it’s better to stay away from mentioning your hypothesis problem when you contact people for an interview. If your interviewees know the exact problem you wish to validate, they might bring it up during the interview even if it isn’t a top priority problem for them, as they know this is what you want to hear about. Giving away your hypothesis too early can corrupt your validation results.

In your contact message, stick to a more general description of your motivations. You might want to include in your message why you’ve chosen the recipient for your interview. It’s also a great plus to add how much time you need, so people can decide if they can spare half an hour or even an hour for you. Asking for an appointment may help to speed up the process.

How Many?

Of course, not everyone will answer or agree on the interview, so contact way more people you want to talk to. You can speed up the validation process if you interview in multiple rounds – as suggested in the previously mentioned article. After talking to 5-10 people, analyze the discussions and draw conclusions. If the first interviews indicate that you might have found a top priority problem, organize additional rounds of 5-10 interviews within the same market segment. However, if your hypothesis problem doesn’t seem to interest your initial pool of interviewees enough, it’s time to look for people from the next highest-scoring market segment.

If you’ve managed to fix the dates of the first round of interviews, you can focus on your interview questions and assembling your script, conducting the interviews attentively, and analyzing the results. These are the remaining steps yet to be discussed in our next article.

If you’ve already validated your hypothesis problem and you are eager to start building your MVP, check out our services or contact us.
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Glossary

ATS (Applicant Tracking System): A software system aiding the recruitment process.

B2B (Business-to-Business): This is a business model where a business sells its products and/or services to other businesses.

Startup: A privately held micro or small business with a high growth potential aiming to reach huge (commonly) international market in the foreseeable future and to evolve into a big corporation.

UI (User Interface)

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