Episode Transcript
[00:00:05] Speaker A: What's up, founders? And welcome to the In Demand podcast, where we talk all about how to troubleshoot growth for your PLG SaaS. I'm your co host, Asia Arangio, the CEO and founder of DemandMaven.
[00:00:15] Speaker B: And I'm Kim Talarczyk, client services manager at Demand Maven, where we help SaaS companies reach their toughest growth milestones.
[00:00:22] Speaker A: All right, Kim, let's get into it.
But I actually, I do feel like marketing right now has been easy for me and it hasn't felt super.
It hasn't felt so hard. And it's not like I've been less busy. I feel like I've been the same amount of busy. Also. Life has been lifing. Yeah, you've been very busy. Yeah, Two funerals in a really short time. Short amount of time as well. That's been crazy. And then.
But, yeah, no, it's. It's felt actually good to create things. And dare I say it, it's actually been kind of cool seeing what AI prompt tracking has been bringing to the table. Most of our pipeline right now is coming through chat GPT or actually it's. Sorry, it's more Claude perplexity than chatgpt. I don't ask which AI people are using to find us, but which LLM, but they are. Like, when I look at the prompts and like, the tracking, like, it does seem like it's a lot of. It's a lot of perplexity and chatgpt, but only because we're not pay for Claude, because if you, if you pay for, like the Claude connection, it's so expensive, their API, which makes sense, but you have to be like, on the enterprise plan to track Claude or whatever. I digress. It's pretty fascinating. And then, oh, I also, in the Tiny Seed chat, in this, in the Slack group, there was a question about AI actually, and I was like, I actually have an answer.
And. And Craig reached out and was like, hey, do you want to. Do you want to talk about, like, what you're doing with AI and AI search and how you're thinking about it? And I was like, I mean, it's literally chasing dragons. Like, let's be honest, it's chasing. You're chasing a dragon. If you have bandwidth and energy to chase a magic dragon, go for it. But if you don't, like, I don't think you have to think about this depending on your audience. But all that to say it is still kind of fun because it's new. It's like a new channel and I've never. I've actually never felt compelled to learn a new channel, like in a long time. Like when TikTok came around, I was like, I don't need to learn this.
Like, I'm gonna use it. I'm gonna swipe, you know, swipe and cultivate my feed. But beyond that, I don't really care about learning the algo. But anyway, no, it's felt easy and I actually have been having fun, but I also kind of have been like, I have things to say and I want to. I want to share those things. I also think too, it's been. It's been easier to take this content that we create here and turn that into something that is a bit more one evergreen, but also more like repackageable. And this, the podcast being kind of like the hub. And now we get to spoke out into blog, YouTube and social and an email as well. Like, that has felt.
I remember thinking, ah, like it really should just be this for us, because that's my most natural.
This is really my most natural medium. And I think it's worked.
But tbd, hold on, Zeke, at all going from speaking being the primary thing to now being like, oh, no, like, I'm really creating my own stage virtually all the time. That I think that was the right strategy for me. But yeah, it could change. Yeah, it could change.
[00:03:33] Speaker B: And there's only so much speaking you can do.
[00:03:36] Speaker A: Yeah. Gosh. I was talking to Will Reynolds. This was like a year or two ago, but I remember he was like, I get on 10 to 12 stages a year, and basically like every month he's traveling and he's got two beautiful boys that are, you know, growing like weeds, of course, because that's what boys do. And he's just like, I need to be home. And I was like, yeah, but. And his wife too was like, yeah, but yeah. It just is like, I just can't imagine speaking every single month. I mean, it's. And it's not like he's doing different talks every time. It's like relative. It's kind of the same talk. Ish.
But. And Will Reynolds is like a heavy hitter in the speaking world. And April, I think, was similar. April Dunford, I think there was a time where I feel like she was speaking like a similar amount every year for like a few years now. She's calmed down a bit, I think now, but I remember like, there was like a.
That was the same year too, that I think we were both like on the same speaking tour schedule. And I saw her like, five times in one year, which I loved, by the way. April is a blast. If you ever get to hang out with her or do karaoke with her, that's also a blast. But, yeah, like, it just was that speaking schedule. Like, I almost died that year, and I only spoke five or six times.
I almost died. I was like, I. How am I gonna live? I. I don't know. But going from that to mostly this has. It's not been a bad transition, but it's been like an unknown. Like, I don't really know what the next channel is going to be because I'm not speaking as much these days for no other reason than just.
You really can't.
You really aren't able to speak at every conference every year within the SAS world consistently, unless you're someone, like. Unless you are, like, April Dunford, and then you can grace any stage at any time. But I don't have that. I don't quite yet have that status. So I.
Yeah, like, I kind of cycle in and out of speaker world primarily just because of, like, there are only so many SaaS conferences. I can only speak at so many every single year. And then the chances of, like, getting invited back every year are kind of small. Like, you might do it a few times, but anyway. And then the next, you know, super popular, famous person pops up and then the wheel turns and then. And then you resurface in, like, 10 years and everyone's like, oh, my God, where? Where have you been? And it's like, I've been here.
Playbook.
Unless you're like, super famous. And then like, like I said, like, Rand Fishkin. Like, if you're like Rand, like, you can speak at any, anywhere, anytime you want, and people will always have you. Maybe the goal is to be like Rand, actually.
[00:06:07] Speaker B: All right.
[00:06:08] Speaker A: Just literally speak at any conference. Okay, we actually have a topic for today. Sorry, guys.
[00:06:12] Speaker B: We do.
[00:06:14] Speaker A: I got on a very big tangent. My bad. It was the adhd. So this is a topic that, in my AI LLM prompt tracking research, I kind of realized, like, no, this is a good.
Two things kind of validated this topic for me. The first was doing some of that research, but then also trolling through some of the subreddits about SaaS or. And also, like, you know, B2B SaaS, et cetera, and how much discussion there is about product validation and idea validation and early product market fit. And there's a lot of pervasive ideas around this that still frustrate me and then others that are, like, super smart yes, do this.
And I kind of wanted to talk through the masterclass, so to speak of how to validate your product ideas if you have budget and also if you don't have budget.
So that's the, that's the topic for today.
[00:07:16] Speaker B: I like this. Now to set the scene is this the core product is working selling and now these are additional add ons or what is this looking like?
[00:07:30] Speaker A: Yeah. What's the scope, the stage? I'm thinking pre mvp, pre product. So before, like early, early now it's interesting. We, most of our clients have a product that they're selling, they have customers and they have relatively stable churn. Like relatively stable churn Monthly. I say relatively because we have worked with clients that don't have stable churn and that's why they hire us, because they want a fixed churn.
That's going to be a future episode by the way.
But there are some companies that we work with and have worked with that were pre product. So funny because people ask like what's the right stage to hire demand maven? And I'm like it's not about the stage, it's about the problem.
And this is a sticky problem and if you have the budget to solve it and if this is a, if this is a large enough problem for you and also a large enough opportunity for you, it's worth the risk, then hiring a firm like ours to help conduct the research makes sense.
Sometimes it's not, you know, like a bootstrap founder with a full time job already. Sometimes it's more like there are corporations out there that want to invest in SaaS, they want to build a SaaS for some reason but they've never done any type of, you know, market research or product, market fit analysis or idea valid validation.
And they hire a firm like ours to do it because they have the money to spend, they have the resources and it's worth for them to figure it out and understand it. So anyway, I digress. So this has come up a few, we've done projects like this before where someone, sometimes it's a founder who's about to go and get like a bunch of VC money.
I'm thinking of thinking of the bank that we worked on. So the, the digital bank that we worked on.
[00:09:15] Speaker B: Yep.
[00:09:16] Speaker A: I actually don't know if they ever went to market and if they did, they, they rebranded. But they were about to go and raise like a lot of money and what they needed to do was validate their ideas and show that they had done the work, so to speak. Putting that in finger quotes for all the VCs and all of the investors that they were going to go and talk to and try to, you know, secure funds from.
And the process is.
It can be very rigorous, and there are things that I think are just kind of a waste of time.
But I know that there are going to be people who will fight me on this, and I welcome that debate.
Okay.
Yeah. Okay. So when it comes to idea validation, and again, your mileage may vary based on the resources and time, energy, money, and also people based on the resources that you have and. Or have access to.
But what I find is there are a few paths that are most effective and a few that I think I just don't. I just don't think it works today.
I'm going to start with the most outdated method that I know of. And so let's say you have a product idea and you're like, I want to build this. Or maybe you've already built it.
That's possible, too. Sometimes it's particularly technical. Bootstrap founders, sometimes they get really inspired by something, usually because it's a problem that they're experiencing or that they. That they know someone directly is experiencing, and they want to just build it. And so then they do. And then what ends up happening is they. They build the product first and then they're like, okay, now who was my market? Where is my market?
And I find this is a pretty risky way to go, in my opinion, because you don't know how big the market is or how big the opportunity is, or even who you're actually building for until you do the research.
And it's really hard, I find, to build something first and then be like, who wants this? Than it is to say, who do I want to build for?
And then build something.
So it's kind of like putting the cart before the horse a little bit.
But there are businesses out there who have made it, who have become successful, or whatever you want to call it, however you define success by building something first and then being like, okay, now who wants it? There are certainly cases where businesses have. And founders have been successful in that scenario. But I find if you want to reduce the risk of that flopping, then ideally you would start with, okay, who do I want to solve this problem for and what problem do I want to solve? And actually, you might even reverse that. You might say, what problem do I want to solve and for whom?
And then you decide, okay, here's what I build. Yada, yada, yada.
And both of those scenarios the outdated method that I mentioned earlier that I kind of buried the lean on a little bit is it has to do with like, okay, you have this idea, you either build it or you don't, whatever, but you have the idea. And if you want to test this idea, it's really common to recommend running ad campaigns, building landing pages and running ads to test the idea.
And the test is if I can build an ad campaign, run a bunch of traffic to it and get leads, then that is proof that my idea is a good one.
And I am here to say that it actually doesn't prove anything except for your ability to execute that channel.
[00:12:53] Speaker B: Question, does this apply to B2B and B2C or are you thinking in just a B2B context?
[00:13:02] Speaker A: In SaaS, this is largely. I would say this is more true for B2B than B2C. I think for B2C SaaS, which is a different ball game.
I do think you can relatively quickly test certain ideas if you're doing B to C. But when it comes to. But there are still. It's still like a. Your mileage may vary scenario. I find more often than not all doing like all using ads does for you is just tests your ability to execute that channel. Well.
It's basically like you, you're.
You ultimately don't know how people will sit with your product long term to know if it's going to be a good enough idea or not.
Just based off of the channel alone.
But there are lots of issues because
[00:13:57] Speaker B: what you're saying is like you basically can attract anyone to any product if you're good at executing in that channel. Like paid wise.
[00:14:04] Speaker A: Yeah. You can get traffic to any landing page.
It's actually really easy. It's extremely easy. A lot of it will be bots, but it's actually really easy to get traffic on a page.
What's much harder is getting people to convert, getting people to. And that's off the landing page or whatever the funnel is.
Then when they're actually in the product, getting them to pay for it.
And then even after they pay for it, they still have to stay.
There's a blog post I wrote a million years ago and it talks about the eight customer yeses.
Customers have to say yes seven to eight times just to be a long time paying customer.
And ads don't, they don't even get past the second or third yes. They just, they can't actually validate your idea. And April Dunford actually talks about this. I talked about April earlier. She actually talks about how the risk with ads is you are making the assumption that you're going to execute this flawlessly in order for you to know if this is an idea that is worthy of pursuing. And what she meant, what she means by that is you have to have the right copy, you have to have the right, if it's visual, you have to have the right creative asset, whether that's a graphic or a video.
Then you have to have the right call to action, you have to have the right segmentation and targeting, you have to have the right funnel or landing experience.
And that has to have the right messaging and copy. And then you have to ha, like, and it just keep. It continues to stack and stack and stack. So you have all of these variables bundled into one small experience, which is seeing an ad, clicking it and then entering the funnel and then hopefully possibly potentially becoming either a user or a customer or even just like a wait list. And I think the, this is a really popular approach because you can wait list things for sure. Like, you can create landing pages that are like, oh yeah, like, let's get the wait list going. And you know, like, and then when we launch, we'll launch into the list.
But what I find is it's such a low, low, low conversion rate. And also too, if you're not super clear on who you're building for, you end up wasting a lot of energy on people who just aren't ever really going to be good fits.
And you won't know that though. And you wouldn't know that, you know, obviously, unless you did it. But it's one of those scenarios where it's like, if you build a product and you're trying to find a market for it, this is why this is so messy, because it could take you years to find the right person just by going through this process.
And also too, it kind of makes the other assumption, if you're doing this like list building thing, it makes the assumption that you're going to be excellent at user story mapping, interviewing these potential customers. Like, you're going to have to do customer discovery extremely well for you to know. Okay, out of this list of randos that we generated based off of some early hypotheses, great, but now who's actually going to be a good user?
And what we tend to see is like, people who go, go this route, they'll end up building like lists of like hundreds, maybe sometimes even thousands of people. And then what usually ends up happening is they spend all this energy and effort, they end up with like five people that actually like, use the product that in a meaningful way.
And sometimes, very rarely I've seen this, sometimes they actually do become paying. Most of the time they don't. Or if they do, they pay for like a month or two because they're just trying to be nice and then they churn.
So all of that energy and all that effort and it's like, even if you were to get people through any experience or any funnel experience, at the end of the day, you may never actually have, like, any real paying customers and you may not even have people who stay.
And that, to me is like such a. It's. It's like, yes, let's get 10,000 people through my funnel, but maybe only one actually matters. And it's like finding a needle in a haystack.
[00:18:22] Speaker B: Yeah, it's just that the playbook just doesn't work.
[00:18:24] Speaker A: That playbook for sass, there was a time when it did, and I, I want to give credit where credit is due. I think it. It did work for a while, but it is so expensive now and so competitive now that it really is like finding a needle in a haystack. And the other issue with it too, that I, that I personally have, that I've seen a lot of teams fail with, is Google and Meta really can't optimize anything until it has a certain amount of volume, until you spend a certain amount of money, and until you know, you, the user, the customer, until you know who your target audience is and like, until you can give Google a list of like, find more people like this.
And this happens automatically now through you know, various API connections and things like that, like, where you can literally pipe in, like, your customer base into the platforms and have it go find like your ideal customer. Like that. That's like the norm now. Until you have that, though, Google and Meta can't operate efficiently or effectively for you anyway. So I think, and again, your mind may vary. There are certainly teams that have figured out how to make this work, and there are certainly founders who have had success, but I would say, though, that they're outliers. They're actually not the norm. Most founders won't have success this way. It's very frustrating, but it's the most. It's the most popular, I think, methodology, and it's the most popular recommended approach. Like, if you were to go through Reddit or anything, a lot of what they'll. A lot of what they'll recommend is like, oh, get like a thousand to five thousand dollars, run some ads on Meta or Google, and then you, you'll have a sense for if your product is good or not. But my issue with that is, again, it's all those variables.
It's all of the unknowns. And then it's also, you're really playing with the algorithms themselves. And you, in order for it to be efficient and effective, you kind of have to have examples of paying customers anyway.
But if that's the case, you might as well do the work of go to market in the first place. Like, that's my argument. Like, if you're going to go and spend some money on ads to try to get, like, to try to build a list or whatever, well, one, that conversion rate is going to be incredibly small. There are certainly founders who have had a lot of success, like we're talking to one right now that use the Facebook Google Playbook or whatever.
They had like tens of thousands of users, like, in their launch list, and then they actually did it, like, walk away with like a hundred or two hundred of their very first customers.
But they have the issue of churn. They have, it's like, I don't know, 40 to 50% churn, like every month. Like, they're not. They have to continue to pay more, do more to fill their leaky bucket, basically. And so they're trying to, they're kind of panicking. I don't wanna say panicking, but they're trying to figure out, like, how do we mitigate churn? And it. Well, it's like, okay, well, when you built the product, who were you really building it for?
Because my guess is whoever it is that you're trying to target on these ad channels, like, it's not, it's not computing into anything that is real. And so, and I remember they gave me like a very general, oh, well, we're targeting founders.
We're targeting founders on the globe. And I was like, any and every founder, because that's a huge market that you're.
You're gonna have hard. Like, especially bootstrapped, like, you're gonna have a hard time.
So then I was like, okay, well, like, let's get more specific. And they're like, okay, okay, okay.
Founders in tech. And I was like, not specific enough. We need to get way more specific than this. Yeah, super. Not helping. So really, like, if you're gonna go that route, you might as well just do the work of go to market.
So there are a couple of other ways that we can validate our product ideas.
I'm gonna go through ones that I think are far more effective. Now, the fundamental Question is going to be, well, how do you get in front of the right people?
And that is always going to be the tough question.
What most founders start with, they start with their friends, they start with family and they start with friends. Immediate, relatively like immediate network. If you think about like the degrees of people that you know or whatever, a lot of people, if it makes sense to start with like their first degree connections so like their families, they're like super close friends.
If you're building something that appeals to those people, great. Usually though, I think I find like most founders kind of go to that second degree or second level and that ends up being like colleagues, your personal network people that you may have exposure to in some kind of way.
And ideally you are directly talking to those people before you ever build anything.
Some people, they'll get excited and they want to build it immediately and that's fair. Like if you go through like RSAs, like the subreddit SaaS or there are a couple of other subreddit. There's, there are several technical founders who are like, like they're building something relatively niche and it's, you know, they're like, I'm just going to throw this on GitHub and just see what happens and on. And like sometimes like that's enough that works. But if you're building something that requires it's an audience maybe outside of yourself, like you're not targeting like other use basically or you're, you're building something that's a bit more, I don't wanna say substantial, but you're building something a bit more complex. We'll say and maybe it is more like B2B. It could certainly be B2C. Still you're gonna need a little bit of a, you're gonna need a better process and ideally you are talking to.
If it's not your direct prospect, if it's not something, if it's not someone that you're like, oh, you'd be the perfect buyer. Ideally it's like a proxy for that perfect buyer. So proxy in research world means this is someone who isn't like the exact person we target. But they're, they either know who that prospect type. So like let's say you're targeting CMOs. A proxy would be like the CMO's executive assistant.
Or a proxy might be like a VP of marketing, maybe in a smaller organization.
That's, that's the type of like proxy that we're thinking about. If you're targeting founders.
Well, one we gotta get more specific about like well, what type of founder?
But you might find like maybe your ideal buyer is someone who is like a SaaS CEO.
Maybe a first time SaaS CEO in the United States of tech companies that have gotten like a series A. And maybe you're focused on like fintech or health tech or something that's a lot more specific than founders. Maybe that's your ideal buyer, but maybe you can't get to that person yet because maybe you don't know anybody who knows that guy. So maybe instead you talk to Maybe other founder CEOs that you know or are could like maybe get more connected to. But maybe they're not in fintech. But maybe they're in like some other like tech world. Maybe they're actually not tech founders or CEOs, maybe they're like CEOs of agencies that sell to those guys. Like that could be like a proxy. So like who do you know or who can you, how, how close can you get to that person who knows either that buyer or potentially could be the buyer that you're thinking of?
That's the ideal scenario. And a lot of that happens through talking to people, asking for connections, asking for, hey, I'm building this, I would love to talk to these people.
Is there anyone that you put me in front of and there are more people in the world who'd want to help you than not.
This can be really intimidating for the technical bootstrap founder who hasn't talked to anyone in 10 years.
You know what I mean? Like you've been, I don't want to say like under a rock, but like you've not been like building your network. That can be really intimidating for a lot of people.
I think in those scenarios I think a couple of things have to happen. I think you either start building that network, you either start building up that muscle, or you can think about building and launching maybe in a more covert or quiet way and slowly building up your, slowly building up your like user base.
But ideally you still end up talking to someone to validate these ideas. I do think though it depends a little bit on the risk. Like if it's a relatively low risk product for you to build and just like throw up on GitHub and like call it a day, do that. But if it's, again, if it's a higher risk thing, like if it's going to be something that's going to require you to become full time or require you to put up 200k to build or whatever it is you're going to want to do, the work to try to get in front of someone before you actually commit to building the thing.
[00:26:48] Speaker B: Yeah, it's like networking.
[00:26:52] Speaker A: I know. Yeah, yeah.
[00:26:54] Speaker B: Start having conversations and seeing who can connect you and, and thinking in proxies is a, is good advice. Like sometimes if you're drilling in. And the same goes for networking. Like, I need to talk to this person specifically. It's like, like, how can other people refer you to that type of person? And what does that proxy look like?
[00:27:12] Speaker A: Totally. And sometimes it's, sometimes it's also like, what communities can you participate in? Sometimes like just like reaching out to people and talking to them is intimidating. And then there are also, there are some founders who they build very quietly. They very quietly build like a little bit of a following. Like, and maybe they don't do any immediate like upfront networking, but they, maybe they commit to the mvp. They, they, they launch it in whatever way and then their whole process really becomes more of like a creative feedback process where they start building in public and that, that kind of attracts their buyer to them or that attracts people who know people.
Super connectors is what we call them. So there, like, there are many different ways to go about this that don't require ads. And building in public is actually one of my favorite ways. Even before you even build anything, even like talking about the problem that you want to solve and publishing that in a, in, in places that you feel like your ideal buyer is or like the person, like, you know, people maybe who can lift you up or people who can help distribute, like your message can help. And I like this way more than spending a much a bunch of money on ads. Now I will say it's slower. So that, and that's the trade off. Right. So it's going to be slower. But to be fair, kicking off a bunch of ad campaigns isn't necessarily going to guarantee success either. Which is why I always say like, yeah, I mean ads can be a great way to spend a lot of money fast and set it on fire, but it could also, again, your mileage may vary, but you still have to kind of weigh the pros and cons of like, you might come out on the other end of this having no answers, having no customers.
But anyway, so those are a couple of ways to think about whether you build first and then go to market later or whether you define the go to market process first. And then, and, and again it's gonna be very early go to market because you don't actually know. You're not ever gonna know until you start Charging for the thing, to be honest, if you have decent part of market fit. But you can at least get a feeling for if this is going to be a viable opportunity for you or not.
But there are a couple of steps I'm going to add to this after, but I'll pause here.
[00:29:30] Speaker B: I'm just. When you said that people on Reddit are On the R SaaS are saying, yeah, throw up ads, I'm just surprised by that because it feels outdated to me and all I can think of is like Tim Ferriss four hour work week in the early 2000s, like that type of hacking. Now granted, he was specifically talking more of like a consumer product.
Like, you know, so tech and SaaS is different whether it's B2B or B2C. I don't know, I guess I'm just, I just feel like it's a little bit of a. I'm just surprised.
[00:30:05] Speaker A: I. Yeah, I, I guess I'm not. There are. I am and I'm not. I guess I'm not. But just because there are just so many pervasive myths about product market fit, idea validity, validation, go to market strategy and definition. Like I, I had a call with a founder, we had a call actually with a founder like not too long ago where they were like, oh, I didn't realize go to market was like product strategy and pricing strategy and not just channel strategy or even I thought go to market was just customer acquisition. Like that's what they really thought. And I was like, oh my God. It. So there's a lot of incomplete information. There's also a lot of like just super pervasive myths. And this is one of them where interesting if you want to, if you want to test or validate your product idea, run ad campaigns. And I'm like, actually don't, don't waste your time. Don't waste your time. If you, if you have money to burn and you want to go fast, but you also have the resources, the skills, the experience, even the team to help you make the most of that, then it could work. But if you don't, if you're someone who's like, actually no, I kind of suck at interviewing people or like, actually no, I'm not the best at building super effective marketing funnels. Like, you're probably gonna have a hard time, you're gonna have a bad time, um, and you're gonna be money like cash poorer for it, and that's gonna be frustrating. So kind of talk through a few different ways. There are a couple of other things too I'll add to this. What's a requirement to me in this product idea validation process? There are really two things. The first is you really should be talking to actual humans the way that you should be talking to them, though, because it's not. It's not enough to just be like, okay, I've talked person.
There is a book that I highly recommend called the Mom Test by Rob Fitzpatrick.
It is still one of my favorite resources for early, like, early stage founders, entrepreneurs, people who want to build, but they don't know quite yet how like, or what they want to do or who even they want to work with or serve at the end of the day. Because if you're, if you're building a product, the assumption is that you want to build something that helps people. Who do you want to help, and what do you want to help them with? Those are the two most fundamental questions that you can ask at this stage. And what I loved about the MOM test is it gives you real conversations or at least reading through what they will sound like. And what I love about it is it gives you, like, here's what, like, a bad interview sounds like, oh, I noticed you do this. Do you want this? What if I built that for you? And it's like, okay.
And then of course, like, you do it. And then they're like, but I don't want to. I don't need this, actually. And I don't want to pay for it. It's like a waste of time.
That's what a bad interview sounds like. But then on the flip side, the MOM Test also does a really good job of outlining, here's what a good user story sounds like. And it's. It sounds like not directly asking someone, hey, I'm thinking of building this. Do you think it will be valuable? But actually going through the process of, well, what are they trying to accomplish? And talking about how they try to accomplish it and asking them, are there any issues or challenges that you have with this?
And if you observe something that you perceive to be a challenge, that you test that assumption, that you actually validate that assumption or invalidate it, either one. But ultimately there's a better way to talk to people about your ideas that doesn't just be like, I made this, do you want it? Or I'm gonna build this, do you? Well, do you think that will help you? It's like, that's such a leading question. That's. And most people are nice and are gonna lie and be like, yeah, I would love that. I would love it. If you built that for me, please do. And then you do. And then you're like, damn, I was kind of hoping that they wouldn't remember that I said that.
And then you have to, like, do like, the awkward shimmy of like, oh, I don't. I don't. I'm sorry. This isn't what I. Sorry. Bye. Like, so you want to avoid that scenario.
And I think the mom test is still, to this day, one of my favorite primers on how to think about doing customer discovery and also what really are user stories.
But Rob describes it in a way that I think is really effective and also useful. And I still, to this day, I'm like, this is still one of my favorite resources, actually, for early stage founders, particularly ones who are in that MVP stage.
[00:34:27] Speaker B: Yeah. And you can read it in a sitting.
[00:34:29] Speaker A: Literally. Like, I think it's like an hour. Like, it's like, you can read that book in an hour. It's super short.
It's. It's also hot pink.
[00:34:37] Speaker B: Right. I'm trying to remember because I've read it. Is it. Does the mom test refer to, like, he was like, oh, I built this thing. Like, mom, will you use it? And she's like, yeah, yeah. Like, that doesn't count. Was that the impetus for the title?
[00:34:53] Speaker A: It's kind of like you have to kind of treat customers as if they're like your mom.
Or prospects, I should say. Cause they're not. They maybe not aren't customers yet. But he gives a story of talking to his mom, though, as a good example, because mom is gonna lie all day long to you about. Because they're your mom, they love you, and they're like, yeah, I think that's a great idea, sweetie. I think you should build that because that's, you know, that's what moms do. They're usually.
Not all the time technically, but usually they're your number one fan. And so at least I know my mom is.
Like, the mom test is, how do you get your mom to give you brutally honest feedback without.
With. Without the brutality of it? So, like, you get the feedback that you need. And also, what I like about. What I like about the book is Rob does a really good job of teaching you how to listen for opportunity versus this is not. This isn't really an opportunity. Like, it's all about training your ear for, Ah, there's something here versus, like, oh, that's going to be a waste of my time. If I were to do. If I were to do that. That's what I Also, love about the book. And it's like I said, it's like Kim said, it's super short. You can. You can read it an hour, but you learn so much. And that, to me, is still, to this day, one of my favorite primers. I think it's a requirement. So if you are.
If you haven't jumped straight to building, then you have the opportunity to build user stories, ideally with people, again, who could be your buyer or at least are close enough to your buyer. But even if they weren't close enough to. Because I've actually done this before, too. Again, they could be proxies, but it also could be people who are just experts in the industry. It doesn't even have to be people close to your buyer. I actually did this recently where I was curious about.
There's a huge company called McKinney's. I think they're based in Atlanta.
It's like a huge manufacturing company. They do, like, a ton of. Well, right now they're building, like, a bunch of data centers, if I'm not mistaken. But they also build, like, a lot of.
What are they called? Like, stadiums. Like, they're like one of the number one builders or creators of stadiums, I think, in the US or something. I actually can't remember.
And I remember I was talking to someone about, oh, like, does McKinney's. Like, do they have software? Like, is that like a thing that they're invested in or.
Because I just was largely. I was curious, but also because I was like, I wonder if manufacturing.
There's certainly software in the manufacturing space, but I just wonder, like, what that world looks like.
And this is more out of pure curiosity than anything, but I. I ended up talking to someone who was like an. Like a manufacturing, like, expert, but on that side of the fence. Cause there's also many different, you know, sub manufacturing verticals and all that. But it was pretty cool. And I. I kind of was like, oh, this is like a really cool way to learn about the industry without necessarily, like, I don't have to talk to the CEO of McKinney's to know, like, here's what the space looks like. You know what I mean? So I'm about to say, even if you can't get to, like, your exact buyer, you might be able to find someone who's an expert either about the company or about the industry that you're trying to enter into. Like, there's all kinds of things there. And then, of course, a lot of founders rely on their own experience. I've talked About Roaster Tools. I think before Roaster Tools, the founder John, he, he, he used to be a coffee roaster. If I'm not mistaken, he was a coffee roaster, but he was also technical and he, I, if I recall correctly, he shut down his coffee roasting business but in return he started up his software like his, his coffee roasting software for roasters. And I, I love that story so much but just because of how it's a story I think a lot of people can relate to of like oh yep, I experienced that problem. I built a solution for me really.
But I, I felt like there were enough other me's to build a business and, and for it to be, you know, I provide value and my customers feel like it's worth paying for, you know, which is the ideal scenario. So talking to people I think is a requirement.
The other thing I'm going to say is a requirement is at some point you are going to have to prove their level of engagement in some kind of way.
The ideal way is to build and charge. That's the most ideal, like charging real money. Like that's how you really know if what you've built is worth it.
But there are other ways to kind of validate if what you're gonna build or what you have built is worth it maybe before you start charging.
And there are a couple of things that I've seen people do that I think works a little bit better. So the first is sometimes you can actually offer it as a service first.
So if you have an idea, it's a product idea. So software SaaS is software as a service where the software is doing the service.
But before software you can manually do the service and you might have a product idea that can be executed manually before you ever build a huge giant platform.
And what you can do is a lot of times you can validate ideas by manually executing the thing first. And if you're technical, you're probably going to build some type of like little micro SaaS or Microsoft for anyway to do this because no technical founder I know ever wants to do anything manually.
But if you don't have non technical. Exactly, they don't have to. Especially not with like cloud cowork and all these other things or sorry, cloud code and all that. But what I find interesting though is if you're non technical, you can actually deliver your idea manually and validate it that way. My favorite story about this is actually Rachel McCrickard from Motivo. So Motivo is a clinical supervision platform slash marketplace that connects up and coming therapists with clinical supervisors to help them get their supervision hours so they can actually become a therapist. In most states in the United States, you can't just like get your therapy degree and be like, okay, I'm gonna go do a service now, I'm going to go and like deliver care to patients.
Usually you have to get anywhere from like, it could be as low as 50, but it could be as high as 200 hours from a clinical supervisor, basically a grown therapist who's made it already. Like kind of watch you do your work for a certain number of hours until you're like ready to be out on your own. And some states, every state has different rules. I don't think any state, I don't think any state has no clinical supervision, but I do think, I think every state does, if I'm not mistaken. But every state is different. Again, some of it's like high, some of it's low. So Motivo connects clinical supervisors with therapists who want to get supervision hours, which they have to pay for out of pocket, by the way. This is not like it's like, it's like they call it like the third degree after you get your main degree or like your, the second degree that you have to pay for. Cuz it is expensive. But this is also part of why we don't have as many therapists in the world. Just, you know, just as a heads up, it's kind of fascinating how it works.
It's one of like the number one reasons why people don't actually become a therapist. Because they graduate and they're like, I have to do clinical supervision too.
[00:41:58] Speaker B: And then yeah, for those to do those hours, they have to pay the person supervising them.
[00:42:05] Speaker A: Yeah, and it's expensive. It can be anywhere from like a hundred to 275 an hour. And if you have to do 200 of those hours, it could easily like block you from ever doing it anyway. So Motivo is the marketplace that connects people. And what I love about Rachel's story is that before she ever built the product, before she ever built the marketplace, before she ever went and got funding, she actually did it manually.
She threw up a website. She had some forms, one for clinical supervisors and one for therapists. And she just focused on, I think it was Georgia, if I'm not mistaken.
Just focused on the state of Georgia and manually was like, hey, if you're a therapist and you want a clinical supervisor, I have a database of supervisors.
And then she'd go to the supervisors and be like, hey, I'm building a database of therapists who want clinical supervision. If you provide clinical supervising hours, I can put you in my database and I can connect you with people based on like, who applies. She literally delivered it manually and this was before they ever built software.
And she got actually pretty big before she ever like got funding, if I'm not mistaken. Like, I feel like I don't even think they had a seed or a pre seed. I think it was just like, if I recall correct, I could be wrong, but I'm pretty sure Rachel literally just was like, I'm just gonna see how big I can make this thing until I need to go and like, you know, get real money.
And when she did go out and get funding, she didn't, I don't think she went, I don't think she went super big vc. I'm pretty sure she went more like.
I don't think it was indie funding either. I can't remember the type of VC that she got. But she did end up getting some type of funding and then she eventually did like build a full blown platform, but she had already had like hundreds of buyers.
And so at the time, it's different now, I think, but at the time every clinical supervision hour that was bought and paid for like through her manual process motiva would take like a little bit of a cut. But anyway, I digress. She validated this idea by delivering the service without software actually. I mean technically it was still software, just not like a full platform yet. She didn't really build anything quite yet. She just used landing page, a couple of forms and just, you know, through the sheer force of her will and networking and talking to people, got it up and going that way, which is pretty cool. That's a cool story.
Yeah, I, I love that story for one, because I have never forgotten it. But also two, your SaaS might be something that you can deliver manually first to test it.
Not always. I think there are a lot of, there are a lot of technical experiences where like you just gotta build the thing, but there might be scenarios where you don't have to immediately build the thing, you can deliver it manually first, which I appreciate.
[00:44:50] Speaker B: Yep. Yeah, I like that.
[00:44:52] Speaker A: So there's, there's certainly the, you know, set up a landing page and like there's let it go. So maybe like you've built the MVP already and you're like, I don't know if this is gonna work, but let's see.
And there are products where that makes sense. So for example, I mentioned Rand Fishkin earlier, he's launching a. He's launched a product actually called Alert Mouse. So in. In the brand tracking world, this is still a problem today. And it's kind of wild that it is, but it is. In the brand tracking world, if you want to track your brand, there are a couple places that you'd go. The first is Google Alerts. It's like, if I want to track Demand Maven as a brand, I could go to Google Alerts and I could put in, you know, Demand Maven and maybe I do some alternate spelling, but that's the first way. But Google Alerts isn't the most reliable, I would say. And also too, it doesn't seem to do a good job with like, mentions in rich media. So if someone mentions Demand Maven in a podcast or a YouTube video, it doesn't know that.
And there are other types of mediums that it struggles with. So the alternative would be like a brand tracking platform that costs a bajillion dollars. There are a few out there, there are a handful that I like, but those are also imperfect as well because sometimes they'll pick up on your own brand even though you've suppressed your brand. Like, sometimes, like, if you're. If I'm tracking Demand Maven, but then if I publish on like The Demand Maven YouTube, the brand tracking app will be like, demand me if it was mentioned, yeah. And I'm like, but it was me.
And you can suppress yourself, but it actually doesn't always work. It's actually kind of flimsy a little bit. So anyway, so Rand has also recognized that this is a problem. Rand is also a really good marketer, to be fair. So he's like, I gotta check my brand and he's gotta track SparkToro and some of the other things he's working on. Snack bar studios, etc. He built this little product called Alert Mouse. And Alert Mouse is exactly what it sounds like. It's basically, it's a brand tracking app and it's a pretty powerful little tool. And what I like about this is, you know, Rand really understands data. And he understands like, he has a really great mind for not just fact finding, but like sifting through large amounts of information and kind of figuring out like, okay, here's the thing, or here's the trend, or whatever.
And he had been struggling with tracking his own brand. And what I love about this is he's kind of applying a lot of his, like, data mindset to, you know, how do you sift through piles of data like of brand mentions and kind of figure out what are the most critical ones that you as a marketer need to know about or you as a founder need to know about. So anyway, so what I like about this though is he kind of just built it for himself and then was like, I would. I feel like this is a big enough problem where other people might be interested in this and there really aren't that many great competitors. So like there are a handful of tools that are very large. Like they're very. But they're again, they're pricey. There's not a whole lot of middle ground stuff that's like quality. And so he sees the opportunity to build something again, middle ground priced, but quality.
And what I love about how he's been launching this is, I would say it's a little different for him. He already kind of, he already has a following, but it started out so simply. He. It was a low risk for him to build it. He needed it anyway. He did it. But then at the same exact time gave it a landing page and did more of like the beta route, which was, I'm gonna launch this out for beta if, if you pay for it, cool. But like, I don't really care if you pay for it. I just want to see if it's valuable and if you think that this is useful or not.
And what he's eventually going to do is, if I'm not mistaken, I could be wrong. He could change his mind. But at the time I believe the plan was get enough users, learn from them as much as possible, and then figure out what's worth paying for versus not. It's still worth it for him to host and to invest in, at least from his perspective, because he has a. He has several brands that he's working with and tracking that he's building and investing in on his own. So it's still worth it for him to have Alert Mouse. But eventually he's going to start to figure out okay, pricing and then also to where does it go next? And that's gonna take time, but he's not in a rush. He can also afford to not be in a rush. To be fair, not every founder is like this or in the same position some of. But to, but I guess like to put it into perspective, if he were in a rush, he would just be a lot more aggressive about, okay, like let's do research, let's talk to people, let's, you know, blah, blah, blah, blah, blah. But what I like about what he's done so far is he's talked enough about the problem, so he's emailed lists. I don't think he's talked as much about it. Like on LinkedIn, he might have. He talks about it, I think, a little bit like on LinkedIn and various channels. But what I like about how he's been kind of building this is he's basically like soft launching it to his network and, you know, emailing certain folks and kind of being like, hey, like, what do you think about this? So, for example, he just emailed a list recently and was like, hey, I'm like putting Alert Mouse, like on, you know, totally, like open beta. I just want to see if it's useful, great. But if it's not, you know, let's talk about it. So he's taking a bit more of a.
It's more of a. I think it's a more sustainable approach, of course, but it's more of like a. It's like not quite like building in public, but a little bit more of like quiet launching slash. I'm, you know, I. He has a network already. He's putting in front of those people. He's going to figure out monetization and pricing later. They actually might already be charging. But he. Yeah, again, he's taking a bit more of like a pot, like a calm approach.
[00:50:22] Speaker B: Yeah, it's very.
[00:50:23] Speaker A: For sure.
That's another way to do it. And it's perfectly, perfectly valid, I would say. I don't know if Rand did as much customer discovery before he built Alert Mouse. He already knew he needed it, but I think that's a pretty common scenario. I think a lot of founders are in that boat where they're like, I need this. I know I need this.
I'm going to build it for me and then see if anyone else wants it. And I think that's perfectly valid.
Yep.
There are a few other things I've heard of. Sometimes it involves putting prototypes in people's hands, actually.
But let's say, let's say you do already have an mvp. Like, let's say you're committed to a vision for, like, product.
The last way, and this is the way that I think is also really interesting, would be actually getting the prototype in people's hands, but not just letting them have access to it.
You don't just, like, give them an account and be like, okay, if it's useful, great. Here you go.
This is a really great way actually to get no information at all because most people may not tell you to your face that it's not valuable. You know what I mean? Like, I feel like it's really common to be like, oh, yeah, I'll get you a login, and if you use it, cool. And if you don't, that's cool, you know, let me know, or whatever. Let me know what's wrong with it. But I find most people never actually tell you what's wrong. If you do, though, you. You've gotten lucky. What I find is maybe a little bit more apt, would be instead of building or committing to one thing, maybe you have the primary idea, but maybe there are like two or three ways that you could execute it. So let's say, for example, Rachel, I mentioned motivo earlier. Let's say instead of maybe like a marketplace, let's say she was considering maybe some other thing.
Like, maybe instead of hooking up therapists with clinical supervisors, maybe, I don't know, maybe she could build, like, this is not real at all. There's no way this will work. But it's the first thing that came to mind. Maybe she builds like an AI clinical supervisor that could, like, deliver clinical supervision hours. And like, that's the thing.
Now, I don't know if that will work, but. But like, let's say, like, that's the idea. And so she's like, oh, I don't know if I should do a marketplace or if I should do, like, maybe there's just like an AI clinical supervisor that is adjusted for every state that therapists can, like, I don't know, get work from, whatever, get clinical supervisor hours.
Probably not a good idea, but maybe that's one of her ideas. Maybe, who knows? What I love about this opport, like, this methodology is instead of building out, like, the full thing, you could just create prototypes. And they can be varying degrees of working. I say working, it could not function at all. It could also just be like, here are a couple of screens.
It could be something that's like, okay, it's kind of. It's like there are a couple of buttons you can click, but for the most part, it's like, not like a fully functional comp or application, but you have a few different prototypes for what it could be. And my favorite application for this would be if you have access to your prospect or your ideal buyer, actually putting each of them in front of them. Now, the assumption here is that you've talked to some people already.
This is hard to do, like, totally cold, but getting their feedback on, okay, which of these best resonates with you? And also, like, what's your impression of what this does for you based on what you're seeing and how does, like, what do you think about that? Tell me more about, you know, you don't want to ask. Cause you think that's valuable. Cause that's like so leading. But getting their feedback and their perspective on each of those screens is also usually very eye opening because you kind of get a feel in a sense for, oh, they're leaning towards this or, oh, this is, you know, like they seem to be gravitating towards these things or what have you. And I love the idea of.
They call them design sprints at Google, but you're basically doing like a design sprint on like. But you're prototyping ideas and getting feedback on them very quickly before you actually commit to like fully building them out or what have you.
Prototyping is a lot of fun. I love prototyping. I actually worked with Rand on a couple of prototypes for SparkToro and it's just, I don't know, I think, I think it's really cool. I think it's like before you even scope out the requirements and build the PRD and like, do like. You could also just throw up some prototypes. Basecamp actually has a book called Shape up that's a really good read. And they talk a lot about prototyping their ideas and Shape up, or. Sorry, is it Shape up or Shaping Up. It's one of those two titles. I think it's Shape Up. Shape up isn't gonna work for every SaaS. There are some SaaS companies that I like. They're like the way that they're structured. Like, they're kind of, I had to say, like traditional product management model, but like traditional project management. Product management, I should say, is a bit more appealing, I think in certain scenarios. Shape Up, I think works best really for bootstrap bootstrappers who have maybe more fleshed out teams or who are very early and want to learn how to do design sprints, but not like in the super stodgy Google way, because design sprints and design sprint thinking comes from. It originated from Google, if I'm not mistaken.
[00:55:34] Speaker B: And.
[00:55:34] Speaker A: But it has kind of evolved as it's trickled out into the SaaS world. But also like the consulting space has like, there are consultants out there who use like design sprint methodology and things like that.
And it's so funny too, because when I was on the board of MOZ and I was with Tara Reid, we actually talked about how design sprints and sprint thinking is.
It's a. It's not like a newfound thing. It's. It's actually quite old because design sprint thinking came from, like, another thing. But it was just really interesting because the idea of mocking something up, prototyping it and putting in front of someone within a week is like, mind blowing to a lot of teams. They're like, I can't even write a, I can't even get a PRD approved in a week.
Like, let alone having a pod or a team of people, like, build something, prototype it, and then, like put it in front of a human. Like, that is bonkers.
But that is the whole premise of design sprints. And also it's a huge part of shaping up. Or shape up. I can't remember. Sorry. It's shape. It's shape up. It's shape up. Okay, cool, cool. I remembered correctly. For some reason I was like, shaping up. Okay, no, shape up. So that's a huge core element of shape up and also design sprints. And it's one of my absolute favorite ways to get feedback on ideas very fast without committing to building out the whole thing. You really just need the, you don't even need like a good comp. Although I would, I would push for having like as high of a fidelity of a comp as you possibly can. It doesn't have to be working though. It just needs to be like, this is the screen that someone would see. Or these are the screens. It could be several screens. Maybe it's not like clickable, but it's like, although with, with figma, you can kind of make anything these days in cloud code. But all that to say you can make something that is like, this is what it would be. What do you think? And here's another version of that same idea or a different idea completely. And I, I just, I love that level of engagement because you run the risk of like, if you do build the thing and you just give someone a login, you may never hear from that person ever again about, like, their thoughts and you just run. It's just such a big risk to me to, if you have a relatively captive audience, to let them be, like, go willy nilly, like in a playground that you have no control over oversight into. And you may never ever get them on the phone ever again.
I'd rather hear from them, oh, this is confusing as hell. Or like, what is it supposed to do? Or I'd rather kind of hear that live and asking them the questions, what do you think this does?
And tell me more about what your thoughts are on this. Like what? Like, what are Your very first reactions as you see this and how do you think this would be used?
And then tell me why it works and tell me why it doesn't work. Actually, like, I, I want to, I want to hear like the argument for and then the counter argument against and actually do that thinking exercise with people because they may come, they may shock you and totally open your eyes up to something completely different that you didn't anticipate. But at the same time, they may validate a lot of what you thought.
And then similarly they may not. And you'll get a good feel for. Like, I gotta pivot away from this. Or actually, no, I was right, this was a good thing. But maybe I gotta tweak like these things or maybe, you know, whatever.
So anyway, that's my primer on idea validation. I will say to kind of close out and wrap it up.
You're never gonna feel like it's perfect and like you're a hundred percent ready. I think there are.
I've actually, I've. And this is, this is, you know, just from all of my speaking in the. Over the past few years, but I've spoken at various accelerators and incubators where the founder never feels ready to build or they never feel ready to commit to an audience. There are some founders who spend years interviewing and doing no building. And I will say you're never going to feel like it's perfect.
But what I'd rather you do is I'd rather you feel like you're 60 to 70% confident based off of real data than be a hundred percent confident based off of no data and you're 50k out or 100k out, that is a much worse position to me.
Even if you don't actually, Even if that 100% confidence isn't warranted yet because it's based off of no data, you're just confident. It's like blind optimism. So that I would rather you not take that approach. I'd rather you take the.
I'm 60% confident, but it's based off of real data. And I, and maybe even possibly some prototypes before I've ever actually spent the money or spent the energy or whatever to build the thing.
And then of course, if you're, if your idea is small enough that it's no real big issue. If you just build it and do it, you take the RAND approach, you, you just, you build the alert mouse and you call it a day. Or, or maybe you take the like, you know, like, maybe you do do the, like, I'm gonna put this on GitHub, throw it up there and just call it a day. Like, if that's, you do that, you're not building like a giant, huge B2B platform. Like, you're good, um, you can just do whatever you want and see where it goes. But yeah, I, I, those are all the different routes to take and kind of how to think about how to validate getting real information and real data from people and not just depending on ads, which I, you know, I've already kind of mentioned is such a, it's such a crapshoot in my opinion. And I think it's just such a waste of time. It's way too competitive and just too expensive, to be honest.
[01:01:10] Speaker B: Yeah. And then I guess just to add to what you're saying, I like the 60 to 70%, because you also don't need to get to a hundred percent with data.
[01:01:19] Speaker A: Nope, get to 16 to 70.
Exactly. And I would say, like, if you're a technical founder, that's gonna feel so uncomfortable because a lot of technical founders in particular wanna operate with a hundred percent or 90%. And the reality is there's never ever gonna be a time ever in your entire journey of being a founder where that's gonna be true. So get used to 70 to 80%. That's the norm. And otherwise you end up spending so much energy on fact finding that it doesn't, that's not gonna pay off. Like, the delta is not gonna be worth it. Like, you're gonna waste more time and energy. And sometimes you won't execute anything at all, which is even worse, in my opinion.
A great CEO is able to operate with 70% of the information and make decisions without perfect information. And, well, what's important is that they make the decision and that they take an action, even if it's no action, but it's intentional. So that's my perspective at least.
Cool. All right, we did it. Product idea validation. There are other ways. There are other ways for sure. Those are my favorites.
And maybe there'll be a part 2 if. Depending on how people react to this one. Yeah.
Great. We have some past episodes on product market fit that we'll try to cross link in. This one that I think would also be worth listening to because you can, you can also validate your product market fit. But in the meantime, thanks again for listening and thanks again, Kim, for joining me. Yeah, thanks, Asia.
