Validation: Can I Build a Business Around my Product?

You are reading the Startup Lore - Deyan's guide to creating successful startups.

Table of Contents:
  1. Introduction to the Startup Lore
  2. Understanding Startups
  3. Building the Startup Organization
  4. Achieving Product/Market Fit
  5. Conclusion

Version 0.3 (alpha, i.e. still needs lots of work). Last update on 7/13/2014.

Summary: You need to validate your startup's business model feasibility and scalability through trial and error or pivot to a different customer/product mix.

The second question that you need to address to achieve product/market fit is "can I build a business around my product?" which has to do with finding a business model. There are two ways to examine this question:

Many startups with ambitions to have massive impact and easy access to venture capital postpone such business model questions for quite some time. There are a number of reasons why this can be a good idea including trying to become dominant in a new market before competition comes in and inability to monetize small audiences (especially for ad-based business models). This can be a scary gamble because it exposes the venture to the substantial risk of crumbling under its own weight if there is no sustainable business model. This is an example of one of the many leaps of faith that entrepreneurs sometimes have to make when trying to create a world-changing company.

On the final page of this section, I discuss other common issues that entrepreneurs encounter on the path to achieving product/market fit.

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