Running through the blood of every new startup venture is one singular theme known as “fail fast” and, while startups would be wise to adhere to this mantra, Startup Studios have bet their entire existence on it.

The main goal of a Startup Studio, also called a Venture Builder, is to rapidly test new startup ideas and either validate them or kill them with no mercy. The innovators working within a Startup Studio do not fall in love with “ugly babies”. Instead, you’ll find a group of ambitious entrepreneurs putting logic before emotion to quickly validate or destroy new venture concepts.

Within the first 4 weeks of inception, a startup must meet strict user demand and market size requirements in order to survive. Due to the pace and rigorous process, most startup ideas don’t make it. In fact, Pioneer Square Labs- a Venture Builder out of Seattle, WA- keeps a running tally of successful and unsuccessful ventures.

To date, they’ve only moved forwards with 12% of their ideas.

Although PSL is one of the only Venture Builders who are transparent about this particular statistic, I can tell you from experience that this ratio is the norm. I might even go so far as to say PSL spins out more ideas than most others do- making their 12% on the high end of the spectrum.

Stop wasting time on ideas that don’t have potential.

When you’re looking to solve problems rather than starting with a solution, you’ll find it easy to stop wasting time on ideas that don’t have potential. The key to this is identifying a problem and then moving through a specific series of steps to validate or invalidate a potential solution.

Step 1: Prototype (Weeks 0–2)

There are two parts to this step. The first is developing a tangible prototype, the second is developing a hypothesis about what will happen when potential customers come in contact with your prototype. Most often, the prototype takes the form of a landing page or a social media advertising campaign.

As far as landing page tools go, there are a variety and they’re all pretty good. Personally, my favorite is Instapage because its drag-and-drop interface lets non-techies develop a landing page in minutes. Each template is perfectly designed by their landing page experts, so there’s no guesswork as to how the page should look. You just fill in the content and publish the page. I also like that Instapage has built-in email marketing capabilities which make it easy to follow up with users who have submitted their email addresses.

After you design and publish a landing page, you need to make a prediction about what will happen when you put that solution out into the world.

Will people sign up to get on a waitlist? Will they want to see customer testimonials? Will they want to see pricing?

By making a hypothesis, you have a concrete way to tell if you were right or wrong about this idea. If users do what you thought they would, the project gets a green light, if they don’t do anything- it should likely be killed off.

Step 2: Talk to Customers (Week 3)

As you approach week 3, you should have an understanding of customer demand. This is vital to the Startup Studio process. Remember: without proven customer demand, you shouldn’t pursue the idea any further.

You don’t need to run focus groups or walk up to people in a Starbucks to talk with customers these days. Instead, you should design a really thoughtful survey using a digital-first tool like Typeform. Your goal is to engage your potential customers in a conversational way.

For one week, you should focus on nothing but getting high-quality responses to your form. While you don’t need to run any paid advertising, you do need to put in the time to figure out where your customers exist online and how to get your survey in front of them.

How to Get Users to Take Your Survey:

My first tip is to be honest rather than “salesy”. If you tell people you’re conducting user research and would greatly appreciate if they would take your 5-minute survey, you’ll likely get a positive response.

Secondly, you need to be careful about the information you ask for in your survey. As someone who has run many survey tests, I can tell you that people tend to drop off once you ask for their email and even if they don’t exit the survey entirely, they are likely to give a fake email. It’s best to just keep the survey questions simple, focused, and relevant.

You should aim to gather roughly 30 responses.

Step 3: Conduct Market Analysis (Week 4)

Market analysis is core to the execution of an idea. Without understanding the current landscape, you can’t possibly know what to improve. You may have some ideas about the value your product/ service will add to consumers and your industry in general, but until you conduct thorough market research you can’t definitively know what people want to see built.

This step is core to the Startup Studio validation process because Studios are startup creation entities- they must not waste time on projects that the market doesn’t want or need. Studios are financed by VC firms (usually) and as such, they have investors to pay back. You can bet this money will vanish if a Studio doesn’t have data to back up their hypotheses about what the market wants.

Time, money, and creative energy are resources that are too precious to waste.

My favorite tool for market research is SEMRush. I’ll be transparent and tell you that it’s $99 per month. For a solo founder, this subscription might not make sense but for a Startup Studio, it’s a small price to pay for a fantastic amount of insight and time savings.

If you’re looking for a free tool with some of the same capabilities, try UberSuggest.

For an in-depth look at SEMRush and its capabilities, check out this article I wrote last year (2019).

This step isn’t all-encompassing and it doesn’t prove there is demand for your product or service, it just helps you listen to the market.

SEMRush helps you figure out how popular your idea is and what the market needs and wants in your industry. So, for example, if you’re looking to start an online fitness program you would type the keyword string “online fitness program” into SEMRush.

The platform will then show you (among other things):

• The keywords that people search alongside that phrase (free, home, Instagram, male…)
• The top keyword strings searched that match that phrase (best online fitness programs, best online diet and fitness programs…)
• The average number of monthly searches for that keyword
• How hard it is to rank for that keyword on search engines

What you’re looking for here is a high monthly search volume, a high KD% (keyword difficulty %), and an increasing trend line. These insights tell you that people are searching for something similar to your product/ service right now which shows demand at a high level.

It’s important to be careful and read these data together, rather than in silos. Meaning, while there may be a high search volume for the keyword phrase “best online fitness programs” it may also be the case that the phrase “best free online fitness programs” actually gets more searches.

This step isn’t all-encompassing and it doesn’t prove there is demand for your product or service, it just helps you listen to the market.

Outcome: Build Beta Product or Kill Idea?

In roughly one month, after following the steps laid out, the decision to greenlight or kill a project/ idea should be clear.

If there was proof of some real customer demand (landing page and surveys) and there was an opportunity in the market (market research) you should move into the next phase of startup creation- which is gaining traction.

If there wasn’t significant demand or the market didn’t seem to need this type of innovation, consider how you might change the product or service to better meet the actual demands of the market.

It’s always hard to “throw out” ideas- especially when you can see their potential. But in the Venture Builder world, this is a crucial part of the process. It helps your entire team get better and more focused + it ensures that you don’t waste time on ideas that ultimately won’t succeed.

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