Uncapped notes - validating your idea

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📰 Today's Edition

There’s one thing that great startup founders have in common: They are passionate about about the problem they’re solving.

But the investors they meet are often not as passionate about those problems. Many investors, in fact, aren’t even aware that the problem exists.

It’s not enough to simply say to an investor “Marketers have X problem.” Investors need proof. They need data. They need validation.

They need to know that:

• the problem you’re solving is a monumental one

• who has this problem

• that your solution is clearly the answer to solving the problem

It’s a tall order.

But if you can effectively prove that you’ve validated both the problem and your idea to solve it, your chances of fundraising successfully will skyrocket.

Let’s dig in deeper, shall we?

Customer discovery is your secret weapon

Let’s say you’re starting a company that provides rideshares specifically for families with young kids. Think Uber, but with car seats installed.

In a pitch meeting with a VC, you state that "People with young kids don't want to lug around a car seat when taking a ride share."

Not bad… but not great, either. Let’s try again:

Wowee zowie. What a huge difference. And it’s all thanks to customer discovery.

Customer discovery is all about talking to real people about their real problems. It's not about confirming your assumptions – it's about challenging them, expanding them, and (if you’re lucky) completely overturning them.

Here's how to do customer discovery:

1. Cast a wide net: Talk to a diverse group of potential customers. Different incomes, different backgrounds, different geographies.

2. Get specific: Don't just ask if they like your idea. Get into the nitty-gritty. How often would they use it? How much would they pay? What features are deal-breakers?

3. Quantify everything: "Most people liked it" doesn't cut it. "87% of respondents said they would use the service at least twice a week" does.

4. Go big: The more data points you have, the more convincing your case. A thousand interviews might sound like overkill, but it shows you're serious.

If you do customer discovery right, you won’t just impress a bunch of VCs. Your go-to-market strategy will be more successful, you’ll acquire more customers more easily, and you’ll find product/market fit faster.

Gaining validation with your customers

Now, let's talk differentiation. Differentiation isn't just about having a unique product (although that certainly helps).

It's about having a unique approach to solving the problem, a unique way of reaching your customers, and/or a unique insight into the market.

Here's where your customer discovery work really pays off. All those conversations you had? They're giving you insider knowledge about your market.

Maybe you discovered that what parents really want is a service that can handle both the school run and their commute. Or that grandparents are an untapped market for family-friendly ride-sharing.

These insights don't just help you build a better product – they help you tell a better story to VCs. They show that you're deeply engaged with your market and positioned to lead it.

Be a missionary founder

In the startup world, it's easy to get caught up in some kind of hype. AI is hot right now. Crypto was the big thing a few years ago. There's always some new trend that promises to make millionaires overnight.

But trends come and go. What stays constant is the need for founders who are deeply, passionately committed to solving real problems.

VCs often refer to these entrepreneurs as “missionary founders”. Founders who are genuinely obsessed with the problem they're trying to solve.

Missionary founders are more likely to stick with a problem when things aren’t going well. They're more likely to pivot intelligently when their first approach doesn't work. They're more likely to build products that truly resonate with their customers.

So how do you show you're a missionary founder?

1. Have a compelling personal story: Why are you the right person to solve this problem? What experiences have you had that give you unique insight?

2. Show your work: Customer discovery is proof of your commitment. It shows you're willing to put in hours of research to truly understand the problem.

3. Be honest about challenges: Acknowledging the difficulties in your market shows you've thought deeply about the problem and are prepared for the obstacles you’ll eventually face.

Crafting your validation story

So, you've done your customer discovery. You've identified your unique angle. You're burning with passion for your mission. Now what?

It's time to craft your validation story. This isn't just a recitation of facts and metrics (although those are important). It's a narrative that weaves together all these elements into a compelling case for why your startup is worth backing.

Here's how to structure it:

1. Start with the problem: But don't just state it – bring it to life with real stories from your customer discovery.

2. Show your journey: How did your understanding of the problem evolve as you dug deeper? What surprised you?

3. Present your solution: Frame it in terms of the specific needs you uncovered in your research.

4. Highlight your differentiation: How does your approach uniquely address the pain points you've identified?

5. Leverage data: Use quantitative insights from your customer discovery to validate your business.

Remember, your goal isn't just to prove that your idea is good. It's to show that you're the right person, with the right insight, at the right time, to turn that idea into a successful business.

Valid point,

Kera from Hustle Fund

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