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How to validate your B2B startup idea - by Lenny Rachitsky
lennysnewsletter.com
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“The value in getting security built into the development process was already well recognized, soI didn’t need to validate the idea. What I needed to firm up was whether if I built the solution, developers would actually embrace it.Therefore, my early conversations were not with security people but rather with developers and entrepreneurs, especially founders of companies in the DevOps space. “I had several dozen such conversations in the opening days, and focused not on finding potential customers but rather on deeply understanding what it means to build a dev tooling company, and how it differs from a cybersecurity one.” DevOps founders were quite supportive of the idea, and agreed with both the need and the opportunity. They’ve all seen or run companies that disrupted incumbents by embracing a DevOps approach. The few security people I spoke to were skeptical, agreeing it’d be valuable but not believing it possible.This firmed up my conviction that this was the right problem to tackle. I thought, ‘It’s hard, but if I pull it off, it’ll be big.’”
—Eric Glyman, co-founder and CEO “Go this route with the goal of speaking with around 30 potential customers, looking for pain and pull (see above what that means).” The founders ofZipspoke with 75 potential users before committing to their idea:
—Rujul ZapardeandLu Cheng, co-founders “Then they started building, and launched quickly, per the advice of their lead investor:” “We talked to about 30 people over the course of a few months, mostly fintech developers, but also friends that weren’t in the fintech space that know how to build authentication. We asked them what they used for authentication and what they thought of it. For most of them, it was either Auth0, Google Firebase, AWS Cognito, or in-house.And pretty universally, everyone hated whatever they were using.It turned into a snowball of momentum, where at a certain point it just seemed inevitable that we were going to do this.
—Eric Glyman, co-founder and CEO “Go this route with the goal of speaking with around 30 potential customers, looking for pain and pull (see above what that means).” The founders ofZipspoke with 75 potential users before committing to their idea:
The founders ofZipspoke with 75 potential users before committing to their idea: “Turns out the response rate is pretty good on LinkedIn when you just want advice.” We would be like, ‘All right, we had these three ideas. These two suck, but maybe we should tweak this idea because of what these two or three people said.’ And so we’d keep honing it down, honing it down, honing it down, iterating every day.
—Eric Glyman, co-founder and CEO “You may think you’ve talked to enough people, but don’t stop until you’re seeing evidence of real pull (e.g. money, usage, strong emotion, cold inbound).” “We did not talk to nearly enough. We talked to 30 different companies within a month. I should have aimed higher, like 50 companies in a month. But we talked to 30 in a month before building anything at all just to see, ‘Hey, is this something potentially interesting?’
A huge thank-you toAkshay Kothari(COO of Notion),Ali Ghodsi(CEO of Databricks),Barry McCardel(CEO of Hex),Boris Jabes(CEO of Census),Calvin French-Owen(co-founder of Segment),Cameron Adams(co-founder and CPO of Canva),Christina Cacioppo(CEO of Vanta),David Hsu(CEO of Retool),Eilon Reshef(CPO of Gong),Eric Glyman(CEO of Ramp),Guy Podjarny(CEO of Snyk),Jori Lallo(co-founder of Linear),Julianna LambandReed McGinley-Stempel(co-founders of Stytch),Mathilde Collin(CEO of Front),Rick Song(CEO of Persona),Rujul ZapardeandLu Cheng(co-founders of Zip),Ryan Glasgow(CEO of Sprig),Shahed Khan(co-founder of Loom),Shishir Mehrotra(CEO of Coda),Sho Kuwamoto(VP of Product of Figma),Spenser Skates(co-founder and CEO of Amplitude), andTomer London(co-founder and CPO of Gusto) for contributing to this series. Art byNatalie Harney. “Forty percent (nearly half!) of the companies I spoke with went through at least one failed idea before discovering something that worked.” Retoolstarted as Venmo for the U.K.
“I had 30 people I talked to about the original idea. This is before we wrote a single line of code and before we actually committed to the payroll idea. We had a list of 30 people that Josh [Reeves, co-founder] and Eddie [Kim, co-founder] and I knew one way or another—some from Stanford, some from other networks—and I asked them for the names of friends who had small businesses. And for every call we did, we asked them, ‘Who are your friends who have small businesses?’I literally was calling people out of Yelp. “In the beginning, you’re very open, exploratory, lots of different ideas and options. In the end, it was really mostly validating what you’re seeing.” The thing I was looking for in retrospect is emotional reaction. When you talk with a customer and you’re like, ‘Hey, here’s a new type of mint. The reason why it’s different is because it’s organic and it’s local,’ and then the person says, ‘Oh yeah, that’s cool.’ You say, ‘Would you buy it?’ They’re like, ‘Yeah, yeah, I may buy it.’ That’s not the feedback you’re after. That basically means that, no, they’re not going to buy it. They’re just being nice.