Validation first benchmark

Validation is the First Benchmark

You have a great idea that you are certain will deliver valuable results, because you can’t find a better solution, at least not one quite as unique, distinct or effective as yours will be. Whether it’s a product, a service or a combination of both, you believe it should be useful to the masses and achieve wide acceptance. If it is truly useful, and people want to use it, why not pursue your entrepreneurial spirit and sell it, building a big business and living the dream? But remember: validation is the first benchmark.

You’re doing it and nothing’s going to stop you. If you just knew where to begin and how to avoid the infinite pitfalls you hear every entrepreneur encounters you would already be well on your way. The two major issues you face right now are time and money management. You have a full time job, plenty of living expenses and probably need help with the technical skills needed to develop a working prototype.

So you imagine your business of the future with sales rocking, new products in development, a great office, stoked employees loving bringing their dogs to work and playing ping pong while brainstorming the next big thing. It’s exciting, I know, but you don’t have any of it yet. What’s more, most of the tangible parts of any business cost money-it’s called burn-and the money needs to come from somewhere: (i) it’s either yours, (ii) your investors’ or, most importantly, its (iii) money that comes in the form of revenue from happy customers that come back again and again.

Revenue is the goal, it’s the end not the means…and the means is money. Incorporation, offices, employees, marketing, websites, products. These things all cost money, but they don’t guarantee revenue.

So how do you minimize the time and the burn between where you are now and your first sale?

Validation is the First Benchmark

Waste neither your time nor your money by working as hard as you know how toward validating your product or service. Build it, test it, improve it and above all else, get people using it. Give it to them.

If you can’t give it away, you’re never going to sell it.

This is called validation and it’s the first benchmark because you have to have tangible demand to know what you’ve truly got. The more validation you have, the more opportunities you will have. Validation is what investors look for, it’s what customers look for and it’s what differentiates you from the competition. Yes, there is always competition so you have to be tough, creative and frugal, keeping your eye on the goal all the time—business is sales and there is no better money than revenue.

So forget about all the ways you can waste money, whether it’s yours or not, on offices, employees, trade shows and cool new gadgets that are sure to make you successful. Validate your idea as broadly as you can and create demand.

Supplying the demand you’ve validated will be the next benchmark, but you’re not there yet, you’re here and there’s a lot of work ahead as you set off on validation.

©2023 ALIGNMT LLC | Financial Management | Mergers & Acquisitions | Investor Relations


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