The Tuesday Roundup
Last week, I continued the idea validation series with a post on validating your market. Today, I’d like to share some additional context and resources.
This story from the founder of Retool demonstrates why validating your market is so important. David Hsu knew that his problem was real — the need for internal tools was a major hurdle for developers. But his initial assumptions about the market were disproven by his engagement with real potential customers. Validating the market and pivoting accordingly propelled him to massive growth. Read David’s story for inspiration and a reminder to validate, validate, validate.
Rather than throwing spaghetti at a wall to see what sticks, Hsu always started off with a strong hypothesis — a starting point that he could pressure test and re-shape as needed... To get into the minds of his potential target users, Hsu “infiltrated” several LinkedIn groups for FileMaker developers and conducted extensive outreach. “We sent out a few hundred cold emails, received like three replies back and got one person on a call. That developer pretty much said that Retool is a horrible idea and wouldn’t ever consider using anything other than FileMaker.”
The first step in validating your market is calculating the Total Addressable Market (TAM). This should be a fairly straightforward exercise. You can use this resource to calculate the TAM. Remember, you want a sufficiently large TAM and sufficiently large niche within that TAM to validate your market.
When validating customer reachability, you should discern whether you’d be selling into a new or existing market. You’ll have a much harder time reaching your customer in a new market. This article from April Dunford explains why. If you’re entering a new market, you’ll probably have to educate them on why they need a solution in the first place. It’s not impossible, but should impact your overall assessment of customer reachability.
One of the key factors in evaluating customer reachability is gauging the availability of mature marketing channels. This newsletter from Emily Kramer is a guide to understanding and leveraging marketing channels for content distribution. Note the emphasis on customer/channel fit — your validation process should ensure that you’ve got this when you’re actually ready to distribute content.
The idea validation series will continue on Thursday. In the meantime, let me know what you thought of this newsletter here, on Twitter, or on Instagram.