Bootstrapped Founder #58: Avoiding the Validation Trap

Dear founder,

If you prefer listening over reading, you can listen to this episode of The Bootstrapped Founder on my podcast.

When founders talk about validation, we often engage in wishful thinking. We say that we want to validate an idea, an audience, or a problem, but in reality, we hope to find a way to be sure. We hope to discover a guaranteed win—a surefire way to build a successful business.

There is no such thing.

A business is always a risky undertaking. That's what entrepreneurship is: an undertaking, an attempt to do something new, trying to create something from nothing.

Entrepreneurship involves the risk of failure at all times. We might start with an idea that attracts no attention, or we might create the wrong product for the right audience. That uncertainty is why we focus so much on trying to validate our assumptions.

But we approach validation the wrong way. We try to find statements, figures, and opinions that agree with our assumptions. We try to make sure that we are right. If we see enough agreement and confirmation, we think we must be doing the right thing, that our theory is correct.

Here's the catch: theories can not be proven. Even if you find a million reasons you're right, it only requires a single valid counter-example to disprove the whole theory.

Karl Popper, a German philosopher of science, calls this falsification. A theory has to be falsifiable and can not be "verified" completely. We can only claim it to be valid because rigorously attempted falsification did not yield any results.

What does that mean in business terms? You can spend weeks or months trying to find people who — maybe — want to buy your product. Or, instead, you could try to find out why people don't need it. You can dive into prior attempts by other founders who ventured to solve the same problem and failed. You can build a functional prototype and ask people to try and pay for it. These actions will produce real results compared to the nebulous "feeling of validation" that asking people if they like your idea would create.

You're better off trying to quickly invalidate your assumptions than to validate them. Every theory that you can invalidate is one less mistake waiting to happen. If you fail to invalidate a theory, however much you try, then you're left with something useful to work on.

The secret of validation is understanding that you can never be sure. You can only become less uncertain. For an entrepreneur, that is an important distinction, as it impacts how we weigh the risks of our actions. If you knew something was guaranteed, you'd likely skip building safety mechanisms or looking at alternatives.

That is precisely why founders who misunderstand validation still fail even though our validation results are promising. We often mistake promises for assurance, which leads to some form of entrepreneurial tunnel vision. Assumptions that were "validated" that way are not questioned anymore. Products are built on shaky foundations. Businesses crumble because we only looked at "the happy path" but forgot to consider all the things we don't want to happen.

Validation through invalidation is like taking a block of marble and carving away at it until the statue emerges. Eventually, the statue will emerge. It might just be a different statue than the one you set out to carve.

Interesting Links I Found

Talking about validation: here's the Indie Hackers conversation around a Tweet by Jason Fried that triggered my thoughts on that issue.

The folks at StaySaaSy wrote about unlimited plans. They don't recommend them. They call unlimited a Ponzi scheme. In the Hacker News discussion, you will find a lot of horror stories. Josh Pigford of Baremetrics wrote about this back in 2014. He recommended not doing it then, and it holds strong today.

I've never been great at cold emails. Not a fan of cold showers, but that's another story. When I read this article about The 94% opened cold email template that landed 20+ partnerships in 3 months by Lachlan Fea, I saw a founder who understood how customer relationships work. Particularly with a SaaS, the overture to the forever transaction determines how the relationship with your customer will pan out. The melodies you strike in your cold email will set the tone for what customers expect in the future. Apparently, fellow indie hacker Mustafa Khundmiri is writing a book about cold emails. I pre-ordered that one immediately.

Adam Doppelt shared his Million Dollar Domain Hobby in a very insightful blog post. More and more, I consider domains to be an alternative asset, as pointed out in Episode 41 of Trends.vc. The article contains a photo of a domain registration manager on the beach. There is a LOT to learn from Adam's approach to building equity with domains — and how much work goes into that before you can make a solid profit.

Thank you for reading this week's edition of The Bootstrapped Founder. If you like what I wrote about, please forward the newsletter to anyone you think would enjoy it too.

You can find my book Zero to Sold at zerotosoldbook.com. It is being sold on Amazon and Gumroad.

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See you next week!

Warm Regards from Berlin,

Arvid