If there’s one statistic that aspiring startup founders should ponder – it’s that 42% of failed startups, folded due to lack of ‘market need. In other words, they weren’t solving a big enough problem.

The startup graveyard is littered with marketplaces for pet costume hire, apps to connect drones to the blockchain, and yes, even a startup which mails you $20 worth of loose change for $27 a month

Of course, I’m exaggerating, but the point remains…

If 42% of startups aren’t solving a big enough problem, how do you avoid that fate?

This was the focus of BlueChilli’s recent meet-up for the Stockland Accelerator program, where we took aspiring startup founders through some top tips for validating whether their startup idea is a good one.

Problem validation

So what is a problem? In the context of a startup trying to actually make money, a valid problem consists of some difficulty a person is experiencing, for which they are willing to trade with resources (i.e. time or money), in order to have solved.

But it’s more than this. It’s needs to be something that enough people experience to constitute a viable market.

It sounds simple, but seven years on from The Lean Startup’s publication, and it still seems more common for people to describe their startup idea as a series of features / interactions, than a solution to a problem.

At BlueChilli, the way to our hearts isn’t through telling us about all the technologies you’re going to use, it’s through showing us your obsessive understanding of a problem and the people who experience it day-to-day.

Our top tips for problem validation:

First, segment your proposed market.

Does your problem exist in the education sector? There are plenty of distinct segments to break your market into. University, secondary, primary. Public, private. Co-ed, single-sex.

Perhaps you might be able to list out 6 distinct segments, such as: Teachers at private secondary schools.

Start with investigating one segment to provide focus to your problem explorations.

Conduct research online

Picture yourself as an investigative journalist searching for evidence to report on. Search for examples of your market segment experiencing this problem. How do they talk about it? How are they looking to have their problem solved now… are they looking to have their problem solved at all?

Here’s an example from a recent BlueChilli startup (PicMi) found during the research phase. It’s evidence of a need to connect workers with short-term work opportunities on farms across New Zealand.

validate your startup idea

Conduct in person interviews

So often, we see founders defaulting to sending out surveys to their market segments. The allure of getting 100 responses to a survey sure is tempting. At BlueChilli however, we recommend starting with in-person interviews to broaden the scope of possible conversation.

In constructing a survey, you’re setting the bounds of what people can talk to you about. Or at a minimum, you’re expecting a lot of people to type a rant into your text box labelled ‘any other thoughts?’.

While it’s definitely the harder option, getting out of the building and interviewing people about their problems, is so much more fruitful. Research interviews should have a loose overarching structure but you should embrace and aspire to be led down interesting avenues of enquiry which open up as you talk.

Here are some opening questions to get you started:

  • What are the top 3 challenges you face in your role?
  • [x] is interesting. Can you tell me more about that?
  • When was the last time that happened? Why was that hard?

To go a bit deeper, check out BlueChilli’s content on problem validation over at StartupU.

Three things you can do TODAY

  1. Get out of the building and talk to people
  2. Put away the survey, focus on conversations
  3. Sign up to BlueChilli’s free startup school at StartupU.io

Solution validation

Once you’ve got a real handle on the problem you’re solving, there’s a big temptation to dive into exactly what your product is going to do. Granted, it can be fun coming up with features and user interface ideas.

Again, take a deep breath and take a step back.

Ask yourself, “What needs to be true for my product to succeed”? Asking this question is a process for uncovering ‘risky assumptions’ you may have made about your product, and investigating these assumptions can give you an excellent way to focus your highly limited startup resources (hardly any time and hardly any money).

During BlueChilli’s accelerator program, we get 40 people in a room and crowdsource 20-30 risky assumptions for each startup.

Validate your startup idea

For a startup looking to introduce a new technology into the education industry, a risky assumption might be: teachers will move from pen and paper and introduce a technology solution into their workflow.

If you can’t get teachers to do this, then it doesn’t matter how many cool features or interactions you’ve come up with, they won’t ever be looked at.

With the 20-30 assumptions you’ve gathered, prioritise them on the following axis:

Validate your startup idea

Assumptions in the top right corner, are where you should be focusing all of your early product investigation to testing. Can I actually get users to do X? Can I actually get people to pay for Y? These are the types of questions which inform early stage product features.

Three things you can do TODAY

  1. Crowd-source 20 riskiest assumptions about your product idea
  2. Prioritise them based on risk and confidence
  3. Learn how to test assumptions on StartupU.io

While the steps above are all important to validate your startup idea, if there’s just one thing you take away from this post, it’s the importance of just starting something. Startup success isn’t dependent on the idea, it’s dependent on the execution of this idea and execution means getting started and stepping outside thinking into doing.

Take one of these ideas above and do it today!

All ready to pitch your awesome idea? Apply for the Stockland Accelerator!

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