When we started Less Annoying CRM, the concept of “validating an idea” wasn’t mainstream yet. We just thought a simple CRM was a good idea, so we built it. We were lucky that it worked out, but most startups that build without validating aren’t so lucky.
Since then, a lot has been written about how to validate an idea. Most of it (talking to customers, doing UX research, etc.) is great advice, but there’s one piece of advice I keep seeing that I have some concerns about. That is: You should pre-sell your product.
They say that you shouldn’t start building a product until you’ve already gotten a handful of people to pay you money for it, otherwise the idea isn’t truly validated. This sounds like great advice! Of course someone paying in advance for the thing you want to build is great validation, and it’ll save you from investing time building a product no one wants. Right! Right?
I have my doubts.
Can you actually pre-sell a product?
Like most questionable startup advice, I think the core issue here is that it focuses too much on what you (the entrepreneur) wants, and not enough on what your potential customers want. Sure, it’d be great to get people to give you money for things that don’t exist, but is that realistic?
Think about how hard it is to sell a real product. It’s one of the hardest aspects of running a business. Many entrepreneurs can’t figure this out, even if the product is fantastic and customers love it.
Now imagine how much harder it gets when the product doesn’t even exist!
As a consumer, do you ever pay for things that don’t exist? I sure don’t. Like most people, I just wait for the thing to actually exist, and then I buy it. There’s very little incentive to risk your hard-earned money on the possibility that a thing might get built.
Then how come so many thought leaders say to do this?
If pre-selling a product is so hard, then why do so many people say you should do it?
Have you ever noticed that most of the people giving this advice either (a) have a large audience or (b) sales is their core strength? If either of those things describe you, then sure, go ahead and pre-sell your product. But for the rest of us, we shouldn’t take our inability to sell vaporware as a sign that we wouldn’t be able to sell an actual product.
This is heavily related to a different topic I wrote about: The problem with thought leaders.
Is this real validation?
We’ve established that failing to sell a non-existant product isn’t a sign that you wouldn’t be able to sell an actual real-life product. But what about the reverse? Surely if you can sell it, that’s a good sign. So arguably you should still try to pre-sell and only pursue ideas that people will pay for in advance.
This is a slightly more compelling argument, but I still don’t think it works out in reality. As I mentioned above, most of the time when people pre-sell products, they’re selling to an existing audience. There are countless cases of this actually being a misleading signal because their audience is buying the product to support them, not because the idea is so great. If you want to validate an idea by pre-selling, I think you have to sell to total strangers, just the way you’re going to need to sell the real product if you want to build a real business.
But even if you can do that, it’s not clear to me that this is the best way to validate an idea. Again, if you’re already great at sales, it might make sense. But if you’re more of a product person, developing the sales skills to sell something that doesn’t exist isn’t a small task. Of course it depends on the idea, but I think in many cases it’s actually faster to build a prototype and try to sell that rather than trying to sell something based purely on an idea.
Does this mean you don’t need to validate?
No! Validating ideas is hugely important. There are really three key points I’m trying to make:
- There are many ways to validate an idea (customer interviews, competitor research, etc.). Just because you haven’t gotten someone to pay doesn’t mean you haven’t done your due diligence.
- Building a MVP (minimum viable product) can absolutely be a part of the validation process. If you’re good at product and bad at sales, don’t follow the playbook of people who specialize in sales.
- Validation is a way to de-risk an idea before going all-in, but you’ll never get 100% certainty. You won’t know the truth until you build the thing.
This topic got a bit of traction on Twitter, so if you want to weigh in, here’s the thread.