Validate, Validate, Validate: Confirm the marketplace needs what you’re offering or you’ll struggle
Tags: Startup, Founders, Startup Lessons, Business, Entrepreneurship

Ron Basak-Smith, co-founder of Sana Packaging.

A business built around a great idea will quickly fall flat if you haven’t gauged the veracity of your potential customers’ demand.

By Kerby Meyers

The 2012 approval of recreational marijuana use in Colorado unleashed a torrent of cannabis-related businesses across the state.

In a Leeds School of Business classroom on the University of Colorado Boulder campus, the wave of excitement swept up graduate students Ron Basak-Smith and James Eichner, who devised a new approach to packaging pot products. As an alternative to the industry norms, the two envisioned containers made out of biodegradable hemp.

After the idea proved popular with classmates, Basak-Smith and Eichner earned a spot in Canopy Boulder, a cannabis-oriented business accelerator, to conduct further diligence. Upon completing the rigorous course — and their MBA studies — they established Sana Packaging and started winning over customers by stressing that their solution wasn’t a novelty but a serious stab at reducing the volume of hazardous plastic waste in the industry.

“Initially, my gut said that there was a niche of people in this market, either owners or people who purchase products, who are environmentally focused,” Basak-Smith says. “But I had to validate that hunch, as the most important thing for any business is getting out and talking to customers and the business owners themselves.

“We could be the most passionate about our idea and sustainability, but when the outside world says ‘Yes, please do this type of thing,’ that’s super helpful.”

Entrepreneurship is built on innovation: Great ideas that spark in the mind of an individual — or a collection of folks — and are pushed through the development arc from concept to the marketplace.

Once there, however, the likelihood of success is driven heavily by validation: Confirmation from a significant number of strangers that the idea is indeed a viable solution and that the underlying issue it resolves is pressing enough to genuinely warrant a solution.

Similar to Basak-Smith, Niyati Kadakia refused to fully invest in her idea for Nulern, a clearinghouse for expert instructors and students of all ages, until she had a sense for its potential market.

So she conducted a survey of roughly 5,000 people at schools, colleges, universities, libraries and community centers to capture a sense of the possible demand.

“I could not possibly just go and build something without knowing if it was actually a pain point for anybody else other than me and my close circle,” Kadakia says.

Conversely, when inspiration struck software developer Chris Martinez, he started building a scheduling app and didn’t stop until he’d launched it. For months, he was frustrated by its inability to capture users, until a different type of inspiration hit.

“I came to realize that I wasn’t even using it to schedule my meetings,” he says. “If I don’t like my own product, how can I expect anyone else to use it?

“The failure to validate that idea properly was a big struggle that I had to overcome.”

Admittedly, those who are great at generating ideas can sometimes struggle to effectively convey new concepts and how they work. Plus, a propensity for perfection can inhibit the development of a prototype or minimum viable product (MVP).

For Beau Bergman and Brantley Pace, the initial founders of the travel planning and budgeting app Tripcents.com, the first step to validation involved acknowledging shortcomings. And then working around them.

“Neither Brantley nor I are technical, so we put together a PowerPoint to show what the app would look and feel like,” Bergman says. “Then we went to friends and random people at bars asking, ‘Does this make sense to you?’ ‘What does this look like to you?’ ‘Is this a product you would use?’”

From that clunky MVP, Tripcents has grown into a service with thousands of downloads. Meanwhile, customer validation has been an essential part of every enhancement and product modification since launch.

To be fair, the process of validation requires vulnerability and a willingness to accept that your idea may be great, but isn’t ready for prime time, according to Ryan Egan. The co-founder and CEO of Stackhouse, a developer of modular high-rise communities based in Tucson, Ariz., spent much of the company’s first year begging anyone he met with to tell him why the new approach to downtown living wouldn’t work.

“The most surprising thing about success is how terrifying it is,” he says. “Once someone validates your idea, it’s no longer a dream. It’s a plan, and you have something to lose.”

If you truly believe in the idea that’s been bouncing around in your head for a stretch, do yourself a favor and expose it to the world. The validation — or lack thereof — will prove invaluable.

To go deeper on the entrepreneurial experience of these founders — and 12 others — check out “Persistent Grit: Candid insights into the startup journey” on Amazon.