Validation (4)

Purpose

“In the Validation stage (4), your startup begins its work on seeking Product/Market Fit: validating all business model hypotheses. This stage is the most difficult for many startups. At this level, you keep proving the assumptions of your business model until you can show the first signs of traction, growth, and revenue. You learn everything you can about your customers while trying to burn your cash as slowly as possible. You spend most of your time tweaking, patching, and sometimes pivoting, creating high-fidelity Minimum Viable Products that steadily evolve from early prototypes into near-finished product releases.

In the Validation stage, you validate not only the success of the product but also the size of the market. You have completed this stage when the product is well-received, and the market turns out to be large. However, because this level is by definition a search in unknown territory, it might take several additional rounds of funding to get there. At the end of this stage, you have addressed the first challenge of Product/Market Fit: you have built something that customers want, something that they use, and something that they happily recommend to others. Also, you’ve probably cut corners in many ways to get confirmation as early as possible that you are heading in the right direction.”