- Dude.
- [Jared] Dude.
- Dude, I almost went for it,
and then you said you weren't ready?
(upbeat music)
How to test your software idea.
Look, I get calls all the time from people that's like
this is my first time and I wanna get it right.
Or I don't know anybody in the tech space.
Or I wanna make sure I don't waste my money.
I think, I get it.
Those fears are right, okay?
Those are challenges that are absolutely correct.
But what I wanna share with you in this framework
is really the quickest way to test,
and my promise is no cost.
Can you imagine that?
At no cost, and you're talkin' software,
I'm saying no cost.
And with the highest probability of succeeding.
Now, the first thing you need to understand
is that the probabilities are low, and it's okay.
I think there's different levels of failure.
And, you know, I think that it's okay
if you don't figure it out right away,
but you keep swinging, right?
You only fail once you get out of the game.
It doesn't matter what inning you're in
as long as you keep getting at bat and swing,
you're gonna win.
I learned this in a big way in my company Flowtown.
We went through a ton of different iterations,
but we got to a point where we built the wrong product,
brought it to market,
it was a landing page app of all things.
It was called landingpag.es,
it was like .es with a G before it.
Long story, not getting into it.
But, the next iteration changed everything.
We decided to focus on a core feature,
and when we tested it in the market,
and we found customers to pre-buy, get involved.
And that eventually helped prove and fund
the further development to get our customers to the point
where we got ramen profitable.
Now, I'm gonna share with you guys
some key areas and aspects that I kind of extracted
from that process and I've used for my next company Clarity.
Literally at this point almost thousands and thousands
of startups I've helped advise to build product.
The first thing is to start off assuming you're wrong.
I think most founders have a hard time doing that,
because it seems schizophrenic.
In one sense I need to feel like,
I call it exclamation mark.
I'm gonna take over the world and this is gonna work,
and this is amazing.
'Cause they almost need that internal motivation and energy
to do something.
But at the same time, you gotta be humble and honest
with yourself and say you know what,
there's probably some aspect of this strategy
and the ideas that I've put forth
that are probably gonna be wrong.
And I think if you start at that level,
it's just a way easier conversation to move in
to the following steps I'm gonna share.
The second thing is to list all of your assumptions.
I think when you build a business there's unexpressed,
you didn't express them,
but there's assumptions you're making
that if those things are wrong it could be around marketing,
you know, how do I get in front of the customers?
It could be about getting customers.
Who is this right for?
It could be around the tech, the technology, the API's,
how you're actually gonna build it.
Or it can even be around the cost.
I think it'll cost X to build,
or I could sell it for whatever Y price.
And those are huge assumptions.
So step one is make the list,
everything you could possibly think about your idea,
and how you think it's gonna be in five years.
Make that list of assumptions,
and start thinking about those different categories.
The next step, which is the third step, well one sec,
we are at assume you're wrong, list all assumptions,
look at the different categories.
Sorry that's step three.
Four is to prioritize, okay?
And I do prioritize like this,
'cause I don't know if you've ever seen like the sort button
in the tool bar, you know, in like Word or whatever.
It's like these two arrows, one down one up.
So sort the right order of the assumptions,
starting with the riskiest assumption.
That's the framework name which is
what is the riskiest assumption that if I prove
to be wrong the whole business doesn't work? Right?
For example, if I'm Uber, and my idea is that people
are going to use an app to request a car,
and I test will anybody use their mobile phone
to hail cab, and nobody does that part,
the rest of the business doesn't work.
So there's like fundamental changes in human behavior
that you're assuming that people are gonna do,
that they may never do, that would cause the whole thing
to be wrong.
One of my favorite stories around this was one time
I was asked to sit down with these kids,
these entrepreneurs from middle school,
and they had a ton of different ideas.
One of the entrepreneur groups, these kids,
had an idea to build what I call an energy park.
Essentially it's a park for kids
that as the kids play on the park, right?
I don't even know how it would work other than the swing,
but like, swing on the swing, or do the teeter totter,
or whatever other mechanical type of toys
they could put together, spinning things that make noise,
they would capture the energy from the kids playing,
and it would get fed back into the grid.
Now, there's a lot of assumptions there.
Especially living, I mean,
just starting off with the climate.
I live in Canada where it's freezing and cold,
so could you even manufacture the gear in a way
that would work for seasonality, right?
So there's a ton of assumptions.
The other assumption is, could you generate
enough electricity with the median range
of usage of a park to actually have some kind
of meaningful impact back to the grid?
Could you produce the gear in a way
that would be ROI positive from an upfront cost
versus energy production?
And could you create the toys or the park elements
in a way that would be interesting
to a two, and three, and four, five, whatever year old kid?
Those were the assumptions.
And when I asked them to rank them,
oh and could you sell it to the government?
Which if you've ever sold to government or K12,
those are very tough markets.
It's possible.
I have a lot of friends that have done it.
I've coached some entrepreneurs on making that attack plan,
but tough.
If you didn't make the list of assumptions
and start thinking about validating it,
then you're gonna have a hard time.
That is the fifth step in the whole process,
which is validation.
There's two ways that I'm gonna share with you.
This is the absolutely fastest way to validate an idea.
One is to reach out to an expert. Right?
So, for example, I'm sitting there with these kids,
and I say, "Have you reached out
"to an engineer that builds parks,
"that designs parks for municipalities
"or neighborhoods or whatever?
"Have you talked to anybody that designs parks?"
They say no.
Okay, that's interesting,
'cause I'm sure if you reached out to them
they would have some ideas around cost, product, materials,
regulations, requirements for maintenance and
other aspects of a park design.
And to me, experts that are in the field are the fastest way
to start validating some of your riskiest assumptions.
The second one is to run experiments,
and running experiments is saying okay,
it's with no code,
it's saying this is what I think people are gonna do.
How do I simulate that behavior
and see if out of a hundred people
that I put that in front of,
they take action and do the right behavior.
Or directionally speaking, enough people do it.
But the key is to define the parameters
and the expected outcomes before you run the experiment,
which is a hypothesis.
So, experts, experiments.
That is the fifth step in really truly testing your idea.
So starting off, you need to make sure you start
with the assumption that you're wrong.
And then I'm gonna share with you guys a big myth,
and something you have to stop doing.
The second thing is list all of your assumptions
that you might have.
Try to group them into categories.
Number three, the categories are marketing, customers,
the technology, the cost of things.
So just start thinking about that.
Then prioritize them, like this,
to make sure that they're put in the right order.
And then finally, validate using one of two strategies.
One is the experts, the second is to run experiments.
And the thing, the tip that I need you guys to do
is get out of the building.
Too many people hide behind email, blog comments,
Quora threads, Twitter discussion.
The true validation happens H to H,
human-to-human interactions, conversations, in-person.
Yes, you can schedule a meeting over the phone,
but get in the car, drive there.
Ask your parents to drive you if you're one of those kids.
And I thought it was fascinating.
I didn't wanna poo poo their idea, but I mean,
take a few steps to really get to the crux
of the business model.
So, with that, I wanna challenge you to live a bigger life,
and a bigger business,
and I'll see you next Monday.
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