Market Assumptions Can Kill Startups

I’ve worked with countless founders who believe that their problem serves an enormous segment of the market or has a niche segment of the market. They know who their customers are, they know their customers will want the solution, and they know their customers will pay for it. But how do they know this for sure?

I often challenge founders to prove that their market exists. Don’t just tell me about the size of the market, show me that it’s real. And the best way to do that is to find 10 people who validate that this is a problem they’re having, and that they’re already trying to solve it in some way. These are your early evangelists, people who know they have the problem and are already paying for a solution, even if it’s a makeshift one that involves stitching tools together.

Finding these early evangelists is crucial because they’ll be your first customers. They may not know it yet, but they will be. And if you can show investors that you’ve found 10 people who have validated your problem, it will be a phenomenal slide for your pitch deck.

Now, I’m not talking about finding 10 people on LinkedIn who work in sales or HR and assuming they have the same problem. I’m talking about finding 10 people who you’ve spoken to directly and who can confirm that they’re experiencing the problem you’re trying to solve. This may mean sending out emails or scheduling Zoom calls, but it’s worth the effort to validate your market.

As entrepreneur and investor Paul Graham once said, “Make something people want” is the essential principle of a startup. But how do you know people want it? By finding those early evangelists and proving that your problem is real.

Another example of a company that found early evangelists is Airbnb. According to co-founder Brian Chesky, they initially struggled to find investors because people thought their idea was crazy. But they found their first customers by simply posting their listings on Craigslist and emailing people who were already renting out their homes. These early adopters helped validate the demand for Airbnb’s service and gave them the traction they needed to eventually become the billion-dollar company they are today.

So, my challenge to startup founders is this: stop talking about the size of the market and start proving that it exists. Find your early evangelists and use their validation to gain traction with investors and customers alike.