This article is part of The Stability Stage section of 📕 Zero to Sold: How to Start, Run, and Sell a Bootstrapped Business.
I first felt that we truly had a validated business when we had our very first yearly subscriber. That level of commitment for a young product such as FeedbackPanda two months into our existence showed us that people wanted what we made and were ready to put their money on it.
However, validation is always a temporary state. Your business can be validated only “for the time being. ” Competition, a changing regulatory landscape, human error, bad press, changing preferences can always derail a working business. That’s why we always kept an ear on the pulse of our community. We screened public forums and groups for complaints and new developments.
In the SaaS world, we have Continuous Integration. I think we should also have the concept of Continuous Validation. Regularly and frequently, assess where you are in terms of still being in touch with the market. Are you still solving their most painful problem? Did that change? Are there new issues that you didn’t encounter before? That will keep you on your toes. And your customers happy.
Continuous Validation of a Business
Continuous validation is the practice of assuming that every product is an iteration of trying to solve a shape-shifting problem.
Within that cycle, processes and goals need to be re-aligned from time to time. If you’re continuously validating your business, you will avoid making big pivots or becoming outdated.
Today, a business might need to solve a specific problem (let’s say Selling Time Machines). Still, a few months or years later, they may need to shift their core business and product strategy (let’s say to Grandfather-Paradox-Resolution as a Service). Or maybe, regulatory agencies (let’s say the Ministry of Time Travel and Tobacco) issue new guidelines and requirements (let’s say “No Time Travel on Sundays“), to which the business needs to adapt (let’s say by providing a Time Travel Permission API and selling that as a plan upgrade).
What was once a flourishing business model can turn into an adjacent-yet-different enterprise over time. How can you make sure that you’re still aligned with the needs and requirements of your customers?
Check for Problem/Solution Alignment
Every few months, figure out if your business is still solving the problem it set out to solve.
Most products are engineered for particular use cases. Those use cases might transform over time. Industries adopt new practices, and workflows change. Your tool may be front and center right now, but a change to the business process or a regulatory requirement might make your product less effective.
Talk to customers and see if they find friction where there was none before:
- Do they still deal with the problem frequently?
- Does the product provide as much value as it used to a few months ago?
- Have they noticed that your product has become harder to use for certain tasks? (This usually implies a change in the task, not necessarily the product)
- Are there other tools that they use before and after using your product to get to their results?
Check for “Eisenhower Alignment”
Every few months, figure out if you are still solving the most significant problem your customers have. Was something introduced that makes your solution less important? Is their problem less urgent?
This check is named after the Eisenhower Matrix, a method designed to shine a light on the tasks that need to be prioritized. It applies to any audience and industry. People find it easy to use as it only asks if a task is important, urgent, both, or neither. Regularly checking to see if the problem you are solving still exhibits the qualities of a critical problem and fits the Important/Urgent quadrant of the Eisenhower Matrix will allow you to pivot to a different issue if that one is gaining more prevalence.
If you have a way to track how much value your product creates for your customers (like a lead generation tool would track the number of leads generated per day), make sure to look into the historical development of that metric. Is it going up for most users or just a few? What’s the overall trend? Find the outliers and talk to them to see what happened to impact their usage of your product.
How to Check
With these two sanity checks every once in a while, you are continuously validating your business. But how can you get this information?
It boils down to talking to your customers face-to-face, or through surveys. I would recommend direct conversations with a few select customers instead of blasting everyone with surveys, but both methods have their benefits. The important part is to reach out to customers who are care about their work, and talking to them about the problems they face and if you’re still solving them adequately. Like in any good conversation with customers, try to be a good listener. Don’t talk about the product, but ask them about how they solve their problems.
If you have the opportunity to talk to the same people again and again over a few years, take it. There is a lot to be learned from the changing perspective of a customer. You will be able to see a difference in what is important to them at different points during their professional journey, which will provide insight into retention strategies along the way. This kind of interaction will also turn your customers into advocates for your business. Being taken seriously will create a solid bond between customer and brand, and the benefits of those kinds of relationships can not be overstated.
If you create surveys, make sure not to limit your customer’s responses. You are not trying to find surprising, unexpected information. If you already knew of a shift in their problem space, you would have already reacted to it. While we are talking about validation, your primary goal is to explore the unknown, detecting the unexpected changes that you have so far missed. Give survey participants a lot of opportunities to write free-form text, and ask open questions.
Continuous Validation And You
Now on a personal level, validation is essential as well, and it is of a different kind.
The above points were about validating that you are working on the right things. Now, it’s about confirming that you are still working on the things that are right for you.
Check for Founder Alignment
Every few months, look inside yourself to see if you are still feeling passionate about your vision. You set out to make the world a better place for someone in a particular way. Do you still care about the same people? Is there maybe a subgroup or a new audience that you discovered that is even more relatable? Is there another way of getting them to the goals that you have found while solving their problems? Are you still excited about how you help your customers? Have you been brooding over a new idea, but work on your current business goals is keeping you from reflecting on it?
A running business requires commitment and weathering the storms of day-to-day operations. If you’re feeling burned out or disinterested, think about delegating the work that creates the most tedium. You’re a founder, focus on your vision whenever you can. That is the one thing you can’t delegate.
When you reflect on founder alignment, envision where you want to be in a few years. From that perspective, take a look at your business. Is it a vehicle that will get you there? Or is it a barrier on the path to where you want to go? Adjust how you run your business accordingly.
Continuous Validation: How Much is Too Much?
While it’s great to check your business every now and then, you should not do that too often. Just like looking at the Stock Market every day will drive any long-term investor crazy, you don’t benefit from continually brooding over the validity of your business, particularly when you have paying customers. Building relationships with the customers you have today is more important than wondering if you will still have them a year from now. The former enables the latter, while the latter hinders the former.
I recommend taking a day every three months to reflect and go through the validation checks I have outlined above. By validating the problem-solution-fit, answering the biggest-problem-question by using the Eisenhower Matrix, and checking your passion for how you work and who you work for, you will make sure that you continue to do meaningful, valuable, and impactful work.
You May Not Be Validating Enough (or Correctly)
If you’ve built a company that is highly automated, you’re running the risk of losing touch with your customers. At FeedbackPanda, we had a lot of self-service help material, so many customers would not ever talk to us through our customer service channels. We would make sure that the help desk system would reach out to them and ask them to let us know if there was anything the system didn’t solve for them. Like that, the more complicated problems would eventually be surfaced to us, the humans behind the operation.
You might not need to talk to people at all times, but make sure to talk to them when you’re stepping through the validation tasks set out above.
Having a lot of metrics and KPIs is becoming more and more common. Don’t just look at the numbers for your decision-making. Use those numbers to see downward trends, but reach out to customers to confirm your observations and get to your conclusions.
All in all, your best bet is to keep your communication channels open to your customers. I’ve written about how to do maximum customer service with minimum effort. Try setting up synchronous, asynchronous, and self-help systems that will allow you to reach out to your customers from time to time.
Keep those channels open, and note down when people suddenly start to complain or point out things that are lacking when they were not before. Your customers will make sure you continue to provide a product that they need to solve their ever-changing problems.
Finally, there is a risk of validating only features and new developments while leaving out the assumptions. This can be called second-order validation: validate not only the choices you made but also the underlying concepts. An example would be validating a newly introduced tabular view of some data. The first-order question is “Does this tabular view display the data in a meaningful way that helps our customers solve their problem?“, while the second-order question would be “Is the problem that this data can help solving still the relevant problem, or should we focus on showing different data, potentially in a tabular view?“. It’s a version of the 5 Why’s, applied to customer needs and desires.
Try digging as deep as you can. You will accomplish the best degree of validation by asking real customers about their real problems, figuring out the reasons behind their actions, and making sure you have a clear understanding what has the most impact on their lives.