Validation: Will Your Business Idea Will Actually Work? Zero to One pt.2 | 014

Charles (: 00:22

everyone and welcome to the Unsexy Entrepreneurship podcast. I am your co-host Charles Harris and I'm joined by Seth Jensen. How are you today, Seth?

Seth Jenson (: 00:31

I'm doing alright. It's a good Wednesday. I thinking it's Thursday. It's one of those things where either somebody moved time while I was sleeping or I'm just off and I haven't decided which yet.

Charles (: 00:42

Yeah, it's definitely funny. I'm gonna be taking off Friday and so it always messes around at their weekend really makes things confusing Today we get to talk about a fun topic.

This is gonna be the second topic on the zero to one. If you came out with a good idea from episode one of the zero to one series, this is the next step involved. So we're gonna be talking about validation. So so far we picked out our idea. We like it. We learned that we need to start trying to do.

And so when we move on to validation, what are we talking about, Seth?

Seth Jenson (: 01:13

Yeah. So you've heard us already talk on this podcast a lot about rapid de-risking, right? And so this is that important step of like, Hey, I've got an idea of this something again, ideally in my wheelhouse, something I'm passionate about. think there's money to be made in it. If it's my goals, but we've still got to de-risk this idea. We've got to make sure that we're right about who we can sell it to and how much we can sell it to them for that they see the same value in it that we do. and the,

kind of number one risk is always going to be demand. Like are you able to...

serve a population with money in hand that's gonna fill all your financial needs, right? Have a cashflow that's gonna meet ⁓ kind of your monthly and yearly and lifetime goals. If the demand's not there, it's a tree falling in a forest and there's no one around to hear it, right? So that's the number one risk and you've got to make sure you attack it head on. And so the validation process is confirming that demand's existence.

And also there's kind of this secondary like sister risk that goes hand in hand with that is maybe the customers are there, but can you access them? Do you actually have access to the channels so that you can build processes within your business so that they keep coming into the door and giving you their money, right? So risk number one is the demand there. Risk number two, can you access that demand? Do you have the channels? And so think of this as your

your journey into the jungle to find out the answer to those two questions.

Charles (: 02:40

Yeah, so I really like the idea of can you find them? I've seen this issue in my own self and then in a lot of businesses as well. A great example, I think, is power washing or lawn care. These really easy to sell services that are high turnover in clients or high churn rate. It's easy to pick them up and what you want is you want the higher ticket.

jobs right so you want to go to service the really expensive homes the hard part though is getting in the door ⁓ and so i've seen a few businesses make huge strides in their business because one client brought them through the gate so that they could get into the community and then it's really easy to sell and they've got tons of opportunities then

Seth Jenson (: 03:05

Yeah.

Yeah.

Okay.

Charles (: 03:27

but it's hard to kind of get into that gate and I love that example because it's so, we can all see the gate, the difficulty of getting to the clients.

Seth Jenson (: 03:34

Yeah, it's a very physical manifestation. right.

Yeah, no, it's true. again, you know, your average entrepreneurship class online or YouTube series, they'll talk about that demand risk a lot. Like that's kind of intuitive. We understand that. But we don't talk enough about the channels and the risk of do you actually know what the channels are and are you well suited to use them? Right. Do you have access to that gated community, so to speak? Because the reality is

There's some entrepreneurs who build businesses just because they've got great channels. They're like, that's a mediocre idea, but I dominate this channel. So it's, it's definitely going to be profitable for me. And, and, you know, the easy example in our day and age are, you know, influencers that have 10 million followers of a very specific type. They've, they've got, they've invested so much time and really just crafting a beautiful channel. So they're just like, I'm just going to get a mediocre product and sell the crap out of it in that channel that loves, you know, my experience. So.

We're not all influencers. don't all have 5 million people trying to find out what we're doing next over breakfast. So we've got to make sure that whatever idea we're trying to bring to life has matching channels that we feel confident in. Whether it's gated communities, whether it's Instagram ads, whether it's door to door, whatever it is, you've got to be prepared to go the distance in that channel. so in these early moments, you're kind of testing these hands in hands. Who are my customers? Do they have the money in hand? Are they willing to pay?

and what are the ways that I'm going to access them and what are the processes I'm going to use to just kind of get this rinse and repeat customer flow coming in through the doors.

Charles (: 05:05

I like that explanation too. So I have a group of side hustling CPAs that we all started our side hustles at the same time. Some of us are full time now. And so we're often communicating and talking about different avenues of selling and advertising and growing our business. One of the guys I am shocked by has just crushed it on Facebook. ⁓

Seth Jenson (: 05:29

Good.

Charles (: 05:31

Personally, I don't understand Facebook I guess and I tried Facebook for a little bit and it just wasn't super my style ⁓ and So it's been really interesting to see because from his perspective he's thousand dollar clients a month on Facebook just from Posting and interacting and it just baffles my mind And then I don't know maybe two months ago. I started doing LinkedIn very heavily

Seth Jenson (: 05:38

Mm-hmm.

Right.

Charles (: 05:57

And that's been the same way for me as Facebook as for him. But Facebook, could never get to function, I think just because of how I communicate, who I am, LinkedIn fit me better. And so I think it's really, really important to find those channels, because it changes the trajectory of your business so much and so rapidly.

Seth Jenson (: 06:01

Right.

Mm-hmm.

Yeah.

And that's where you're going to live as an entrepreneur, right? Like you're going to be in those spaces, advertising, interacting. So you need to be familiar with them. And again, to your point, you got to be comfortable with them, right? Like, or be willing to stretch yourself and learn, right? And, ⁓ and I'll be honest, like in my consulting business, I'm a hundred percent.

Charles (: 06:28

Yeah, and learn, yeah.

Seth Jenson (: 06:34

limited by the fact that I don't play in certain channels and that's okay for me right now in this stage of my life I know there's all of these places I could be and it would boost my profits or my at least top line enormously but I'm not willing to do the work those channels require right now so you're right there's kind of this fit for you and fit for your customer and they both have to be there so

Charles (: 06:49

You

Seth Jenson (: 06:59

As we talk about this de-risking process, right, and this big risk of demand, big risk of channels, I love the de-risking framework because it puts the power in our control. Like we take responsibility for all the factors that are gonna lead to success. And as we go through this process, we wanna be as scientific as possible. Like we wanna face the music, we want to not necessarily go all gut all day.

but really be aware of the assumptions we're making in this process so that we don't trick ourselves into being somewhere we don't wanna be. And in fact, of the like bleeding edge science in entrepreneurship academic literature is all about taking a scientific approach. And there's some really cool studies that show that if you're scientific, which means, know, paying attention to the assumptions, testing your hypotheses.

like the revenue and profitability outcomes are huge. Like we actually have data on this that's really exciting. So this isn't just like, yeah, that sounds nice. It's like we can prove in terms of like the things that matter most for your business that being careful and scientific is gonna benefit it. So last time we talked about this kind of value hypothesis, this, if we do X, it'll unlock Y value for Z customers, right?

And this validation process is really spelling out, okay, that's my hypothesis, that's my value proposition. If I do this, it's gonna do this for these customers. Well, what are the sub-hypotheses happening here? What am I assuming is going to be true so that that value proposition becomes realized? So what's gonna be critical or necessary to unlock that value for these customers? So for example, I consult universities on building entrepreneurship centers.

And I'm assuming that that universities care about student entrepreneurial success. Like that is a very core assumption that I'm baking into that value proposition because that's really what I offer. And some do and some don't, right? Because it turns out some administrators are very happy just having offerings that look good, but not effective. They're like, no, I can continue to fundraise.

Charles (: 08:47

Do they?

⁓ yeah.

Seth Jenson (: 09:01

on this kind of superficial stuff. Like I don't actually need to do all the hard work it takes to make students successful. So not all universities do care, right? And so I had to go deeper and find out, what types of universities are oriented towards student success in the way that I can really assist them. Anyway, that's just one example of this assumption that's being made that I had to really go deep in order to ⁓ kind of my craft and hone my value proposition and understand my customer base.

And there's tons, every value proposition you have, there should be lots of assumptions that you're cognizant of and kind of actively testing in this validation stage. I'm curious, can you think of any assumptions you were making as you broke into your space?

Charles (: 09:43

Yeah, and I'll tell you some that I still, I cling to despite I think my clients not necessarily caring as much. So one thing that I love doing that I think is the coolest thing ever is every month I will give you your financials, but more than that, I'll go through in a video and talk through your financials for you. This can be a huge unlock for lot of entrepreneurs who I love you all dearly, but

don't understand a P &L in a balance sheet. ⁓ The problem is, is I thought everyone would care about that as much as I do. Because I think that's a huge value because I don't think they understand it. And then I had a bad month. I hired someone, had a bunch of taxes that I had to get done, and I didn't get to record some of the videos. Some of them I did. The clients who always are commenting on

Seth Jenson (: 10:13

Mm-hmm.

Yeah.

Charles (: 10:35

on or emailing me like, hey, I noticed you mentioned this, but I missed it for a few people. And do you know how many comments I got on that? Zero. ⁓

Seth Jenson (: 10:45

wow, yeah, yeah. So again,

there's an opportunity for actually to test that assumption. You think it's valuable, right? And theoretically, you're putting a of resources towards that. having to be a differentiator. And now you're learning some clients might and some don't, right?

Charles (: 10:51

Yeah.

Right, some

really want it. And I know those clients that really want it because they're the ones that are always reaching out after I send a video and saying, oh, thank you for this. This is what this number is. This is why this is this way. And so those clients, I will forever do it. I think it is awesome. I think it is beneficial for them. Oh, yeah.

Seth Jenson (: 11:10

Yeah.

too honestly you know if I was mentoring you I'd be like

yeah that's a that's a reasonable you know assumption to make go go explore it.

Charles (: 11:23

it's great. And I'm still

going to do it for my other clients as well. It's not something that I'm going to try and stop doing. Right. I still think it's really beneficial and I want the clients that care about that. And so that's part of it. Right. The value for some clients is going to be less than for others in some areas. But I think the value I thought I was giving in that the real value for it is that I respond to their emails, to their phone calls.

And so for those clients, even the ones that I'm not sending, I didn't send the video to that one month, they still appreciate that I respond to their emails. And so I think that that's the real value proposition. Part of that can look like a monthly rundown of their financials, but that doesn't always mean that that's what they're looking for. They're just looking for that communication.

Seth Jenson (: 12:12

Yeah.

I think that's, I love that. It's such a good example of what we're talking about. And, and you can see how this plays out, not just for the big ticket idea that you're trying to build your business around, but when you're choosing to launch new products, it's the same process, right? Like major firms, Apple is doing this for every product or even every feature that they're, they're adding to the iPhone. They're going into, and if they're being smart, testing these assumptions and breaking it down. ⁓ but it's especially critical. You can't skip this. You know, if, if you're, you know,

taking some liberties with some features, that's one thing, but if this is the core business that you're building your life around, can't risk just not testing these assumptions. And again, we think about de-risking. It's an expensive effort. It takes time, it takes energy. So there might be aspects of this that are basically costless assumptions or costless to test. And so you can just be like, you know what, it's easy for me to...

⁓ This isn't a deal breaker. I'm just gonna bake this assumption and not worry about it But those assumptions that are critical you've got to look at that list and be like, okay if I'm wrong about this I don't have a business like this isn't gonna work like if if I if this channel doesn't perform like I think it does I'm not gonna have you know, the scale that I need to be successful those are the ones you want to spend your time and effort in and and ⁓ really It's really investing in yourself in your own confidence because it's gonna supercharge your pathway if you know

Charles (: 13:16

Yeah.

Seth Jenson (: 13:32

Hey, I did my homework. I have every reason to believe I'm gonna be successful. So I'm gonna approach execution with that confidence. And it's just a game changer, right? So let's go talk about some concrete ways to start testing these assumptions that you've broken down in your value proposition. And the first is like so simple, but so important. And that's just like Google the shnuttles out of it. Like Google an AI like...

get chat GPT or Gemini or whatever like AI is your best friend right now and just have a long drawn-out research session with them across all of these assumptions you're testing. It's free, it's easy, it's infinitely patient with you, but yet so many entrepreneurs skip this step. It's crazy.

Charles (: 14:15

Yeah, so give us an example of what this would look like. Because I can, my assumptions are people want taxes done and that I hope that that's true for the majority of people, but that's not very helpful for our purposes here.

Seth Jenson (: 14:27

Yeah, absolutely. So I'll even give you a specific example that I saw recently. There's these three amazing entrepreneurs I work with. They're young, they're scrappy, they're just super competent and they were trying to decide amongst themselves between a few directions. And so I was actually there in the room with them as they basically had this long coaching session with ChatGPT where they're like, hey, here's the ideas we're considering. Rank them.

rank them in terms of revenue potential. Let us know which ideas are gonna be the most profitable. Then give us a breakdown of competitors in each of the space and give us a sense of how crowded the market is and how mature the market is. And then they said, hey, what are the major risks? know, rate these by risk with a likeliness to succeed and just over like question after question after question, more and more context until, they kind of use chat DBT to narrow down these ideas. Now, obviously AI is not infallible.

but it's also got this broad base of information. Like it's just pulling statistic trends from a lot of different places. And so it can be valuable even if it's not perfect, right? And so there's always that caveat in this process, but it was really cool to see them just trying to harness the power of the internet to pull data, pull, you know, again, trend insight, all of these different things, and basically go through this reasoning process with this.

with the whole weight of the internet behind them. again, there's really no end to how you can use this. And you'll be surprised how specific you can get, right? So we're going to have an episode on market sizing. These tools can help you market size. could just help you pull figures from databases and other sites around the internet and actually help you see, this is how much revenue potential there is for this idea.

They'll break it down by state. They'll break it down by demographic. Like it's incredible. So, and again, it's not just about the AI, obviously just classic Google searches, looking for competitors are also helpful. But we've kind of got this super powered search experience now with these assistants.

Charles (: 16:30

love about AI and what you're bringing up, right, is we can bring in our competitors and then we can say things like what differentiates them, why are people using them instead of this other product. ⁓

Seth Jenson (: 16:37

Exactly.

or even

what's unsatisfactory about the current experience with this competitor, right? Like it can go, mm-hmm.

Charles (: 16:48

because then they could go through all the reviews and pull out all

the information and you don't have to scroll through. ⁓ Interesting. Well, and that could be really beneficial.

Seth Jenson (: 16:54

Yeah.

So that's

where I always tell people to start. And it's so funny how often I get people coming into my office looking for help, excited about an idea. And they'll ask me a question that I don't have the answer to. But literally, I'm just like, let's just take two seconds and plug this into Google. And it's almost embarrassing for them because it's like, you came all the way here. You drove, found parking, which is always a nightmare at my university.

came into my office to ask me this question that Google could have given you on your bathroom floor, you know, like you'd be sitting on the toilet and Google could have given you this answer. And anyway, it's just don't underestimate the power of this. Google Trends data is incredible, right? You can see how often what people are thinking about. It's just such a rich source of information about demand and channels and any industry under the sun in those. So

Charles (: 17:32

You

Yeah.

Seth Jenson (: 17:51

I just can't emphasize enough, like don't skip it. Don't skip it. Like it's worth an hour, two hours of your time learning from these incredible tools, but don't stop there. You know, that's...

Charles (: 18:02

Yeah, so kind of on this and maybe this is going down a thing that we don't need at the moment, but are there markets that are too small? Like if you're looking on AI and it's saying there are 10,000 taxidermists in the United States, is that too small of a market to sell your, I don't know, flowers that you hang on antlers, right? Like, is that, does that make sense?

Seth Jenson (: 18:18

Mm-hmm.

Thank you.

Yeah, so no. You can make a great business with one customer, right? If it's the right customer, right? That better be a rich customer with big needs, but some of the best businesses in the world, like their only customer is like the US government, for example. ⁓ Or, you know, like if you find, if you're doing, we've used this example before, but maybe you have an uncle who or an aunt that owns a bunch of properties.

Charles (: 18:35

You

Yeah.

Seth Jenson (: 18:53

and they need landscaping and they're your only customer, but they've got 30 buildings and that pays the bills, right? Just that kind of monthly revenue of handling, you know, one real estate empire's landscaping, easy. So, no, I don't think there's a market that's too small, but there are some that are too small for what you're trying to accomplish with your business and in your life, right? So you've got to make sure that your goals match the

Charles (: 19:00

Yeah.

Seth Jenson (: 19:18

the thing and this happens all the time too. have entrepreneurs come in and say, man, my passion is crocheting and I'm really good at it. And I'm like, that's great. But you, there's only one of you. So you can only produce so many, you know, crocheted backpacks. And so if it's really the crocheting you love doing, it's not even necessarily a market constraint. It's a production constraint. And so you've got to decide, you know,

Are you willing to stay small or do you need to go through other manufacturing means and kind of scale out?

Charles (: 19:45

this could

be awesome for AI because right as soon as you said that I'm like ⁓ just I like crocheting AI what are some good business ideas that I can do immediately like sell your patterns right because you don't have to create it you can sell these patterns obviously one to many it's much easier sell it'd be smaller amounts but right you could sell more and I don't know if that's a winning business model I haven't looked at it I'm sure that's a

Seth Jenson (: 19:54

Mm-hmm.

Absolutely.

Charles (: 20:13

A saturated market to an extent and hard to get into, but it's doable. Right. And I think that's the key. And if, if you're good at your channels, if you can do Instagram marketing really well, I bet you could crochet a beautiful backpack. Get it on Instagram. It get tagged. It could go viral. And then suddenly your patterns are being sold. Right. And so there are definitely avenues. And, and I think that's kind what you're talking about with going to AI, going to Google.

Seth Jenson (: 20:16

Yep. Yep.

Mm-hmm.

Mm-hmm.

Charles (: 20:40

talking to it, trying to figure out exactly how this all fits.

Seth Jenson (: 20:43

Yeah. And what I love about bringing our, you know, co-founder AI early in the process is you're going to find that for the rest of your entrepreneurial journey, that silent, easy to work with co-founder is going to yield all kinds of benefits and fruits. And we'll get to that in step three. So this is kind of the first step in the validation process, but AI is going to rear its beautiful head again in step three.

to help us conduct some experiments. But once we've had that conversation with AI, this next step is to talk to real life people. Because as good as AI is, it might not actually know everything on the ground in reality and IRL. So get out there, use your social capital to talk to people that have the answers that you don't, right? That can help you know whether your assumptions are just your gut or actually shared.

So this means talking to your customers, the people that are going to be most obsessed with your product. It means talking to business owners that do something similar. It talks, it means talking to industry experts that understand the supply chains you'll need. It means talking to whoever it is that really has insights on specifically what you're trying to execute on. And we've had, we've talked a lot about social capital. So I, know, and networking and all of this. So we don't necessarily have to go too deep into this, but again, super essential. Don't let anything stop you from getting out and having these.

these conversations.

Charles (: 22:08

Yeah, I will say one of the first conversations I had after I started, um, was with, I guess you could say a competitor. He left the market. He's retired now. Uh, but it was a really helpful conversation because I was scared about marketing. was scared about finding. And he talked about, have to be constantly selling, which I agree with. Um, but I think more interestingly, um, one of his employees said,

if you want to sell, just let me know and I can find you 10 clients within the next month. And that was like, there's, there's a need, right. Right. And, obviously I haven't taken it's it's the wrong niche for me. ⁓ it's much more real estate focused. And so that wasn't what I was looking for, but it showed that there was a huge need. and so talking even with competitors or random people, I think works.

Seth Jenson (: 22:43

Yeah.

And again, all the same strategies we've talked about before. Take them to lunch, have a 15 minute Zoom call, make it easy for them to say yes, be super, do your homework beforehand. And again, this is where AI can play a great role. If you're intimidated by talking to people about things that maybe you don't have the answers to yet, use AI to structure your questions and kind of plan ahead and become familiar with the lingo and kind of what's important to these people and in this space so that you can come and ask really good questions when you're face to face with them.

Charles (: 23:03

Yep.

Seth Jenson (: 23:27

But you don't know what you're going to learn from this. And that's the point, right? Like you could find out some deal-breakers for you about this industry, or you could find out, be pleasantly surprised by, hey, this process is way easier than you even think it is. You don't know. And so you've got to go find out what you don't know. And then as we talked about last episode and always, you got to go out and do stuff. And this becomes like, let's actually test our assumptions.

Let's conduct some experiments if we want to keep that scientific language about these assumptions. And what I love about, we've mentioned Airbnb before, and again, they're just such a great example of this, where in those early days, Airbnb was able to be confident they were right when everyone else was telling them they weren't. Because they believed that if they could make people familiar with the spaces they were going to stay in, right, these random people's houses, if we could make them really familiar ex-ante before they ever show up.

they're gonna be willing to do this kind of online transaction and sign up to stay somewhere across the world with someone they don't know. And so to test that, they went and took these really high quality pictures of their first three apartments they were renting on Airbnb. And they just plastered the online page with all of these high res, professionally done pictures and they put them out there and saw. And sure enough, it started working. And there's no other way for them to have tested that.

built the whole platform and launched in 50 states or multiple countries, they could have been wrong and horribly wrong. And we never would have heard about Airbnb. But instead in those early days, they were very conscious to test specifically what they felt like were going to be deal breakers in their value proposition. And they kind of slowly made adjustments. And there were some things they were right about, there were some things they were wrong about. But they got out and did.

Charles (: 24:57

you

So this

brings up an interesting question. I'm curious your thoughts. So there's something called an MVP, or a Minimum Viable Product. I think that's what it's called, And this is usually just something you can throw out the door. Even in today, you can use a lovable or a replet and make an application completely with AI. It doesn't work.

Seth Jenson (: 25:21

Yep. Yep, exactly.

Yeah.

Charles (: 25:39

perfectly every time, it can be a viable product, at least at the start. How do you feel about doing something like that versus something more professional? Because you mentioned Airbnb, they took professional quality pictures. Honestly, I think that's probably a huge advantage if you can do that. But I'm curious on your thoughts, which one's a better path? Do you want to put down the money and do a really fancy?

Seth Jenson (: 25:40

Mm-hmm.

Mm-hmm.

Charles (: 26:04

photo shoot or do you want to just get something out the door?

Seth Jenson (: 26:08

Yeah. And again, all things considered, you know, a couple hundred bucks for an hour long session for, the professional wasn't going to break the bank for Airbnb even in these early stages. Cause again, they were, you know, they were approaching venture capital. This was a high stakes situation for them. So it was money well spent, but you're right for us sitting in our garage, not sitting, you know, going for venture capital. There are so many free ways to go about testing in the real world, our, our value propositions. And I'll just kind of.

Charles (: 26:15

Yeah. True, true.

Seth Jenson (: 26:36

give you a bunch of random examples from different industries. Like you say, in the software space, it's expensive to develop a full application or platform. ⁓ And so what's kind of became common in Y Combinator circles and other kind of fast moving tech spaces is they'll just make a landing page with a video of just like basic animations of a product that doesn't even exist yet.

Charles (: 26:45

Yeah.

Seth Jenson (: 27:02

but it kind of gives people a sense of what this app's gonna do. It's a calendar app and look at this cool functionality. It's just a video. They haven't written a line of code at this point. They're literally just making a landing page video with kind of a feature list and those types of things. And then they just have a bar launching November 22nd. Put your email in to be notified at launch or something like that.

Charles (: 27:12

Yeah.

Seth Jenson (: 27:25

And they just see, people interested enough in the product we're building that they're willing to give us an email address? Which is a smaller ask than the $15 a month we're gonna charge when this is right. But it's a test.

Charles (: 27:32

Right.

Well, that's what I love about it, right?

Like it's so minimal, it's easy for the clients. And then if you can create, I don't know, 500 person email list and then send them the email when you launch it, you're gonna get a customer from that, if not many.

Seth Jenson (: 27:41

Mm-hmm.

You got your ⁓

In the CPG space, the physical goods space, Kickstarter has been so powerful, right? Where it's like, even before you built the product, you have a crowdfunding campaign, give people the option to prepay for something that doesn't exist yet. Like that's ultimate validation. In other spaces, I've got... Yes, it's harder, it's easier said than done, but.

Charles (: 27:55

Yeah.

People run into issues with that, but that's why it's really cool

though too. Because even No Man's Sky, which has become rather big, had a huge fiasco at the beginning because they couldn't deliver on the promise that they had said, Which is why it's really cool, but they were able to sell it to millions of people, well maybe not millions, but they were able to make millions of dollars prior to even having a product, which is...

Seth Jenson (: 28:20

Yes.

Charles (: 28:30

crazy.

Seth Jenson (: 28:31

Yep. So, and again, it's kickstarting, you know, we've mentioned this before, but crowdfunding campaigns are difficult to do well. It's actually, it's a pretty big investment to do one that's successful, but it's a lot cheaper than actually building out a full product. Right. And so it's, it's a great way to de-risk. People that are starting restaurants, right. There's kind of a process right now in the restaurant industry where at first you're selling out of your home, you know, just to friends and family.

Then maybe you're at farmers markets. Again, it's a hundred bucks for a stall at a farmers market. You get a taste of are people stopping? I always tell people when they go to farmers markets to just change your prices as the day goes throughout, right? So, you know, the first hour you're selling, yeah, these cookies are five bucks a pop. If they're flying off your cart, be like, eight bucks a pop and then see if it slows down, right? You can literally do real time pricing right there at the farmers market to kind of validate, do people want it? Is this the price they want?

Charles (: 29:10

Mm.

You

Seth Jenson (: 29:25

And then you're hearing customer feedback as well. there's too many chocolate chips. Like I'm not really a big chocolate chip person or everyone's obsessed because they're thick. And like you find out people are really into like the thickness of our cookies or whatever. And so, and then once you've nailed it, the farmer's market, maybe you do a food truck and if the food trucks, you know, really successful, maybe you get a brick and mortar, but you're just constantly de-risking every step of the way ⁓ and testing the assumptions. And ultimately the reason for all of this

Charles (: 29:29

Yeah.

Seth Jenson (: 29:52

Step one, two and three, AI, talking to experts, running experiments. This whole process, you're becoming an expert. You're becoming a changed entrepreneur in this process. You know your customers, you know your product, you know your industry space, you know the issues and the opportunities. You're investing in yourself through this process. It feels not as much fun as the big flashy launch, but this is the groundwork.

to invest in yourself so that you are the right entrepreneur to bring this business to life. And I think that's just so critical for people to understand.

Charles (: 30:27

Well, and I don't know how many companies now succeed from a straight launch. think, I think that's maybe a little bit of an antiquated view because boy, I don't, I just worked with a client who just did their soft opening for about a week before they did their official opening. And even then, right? Like,

Seth Jenson (: 30:45

Mm-hmm.

Charles (: 30:47

They're they're opening then so that they can prepare for a festival that's happening in in two weeks. Right. And that's the real opening as far as they're concerned. I don't know if there are many businesses that just do a grand opening. And I think that's maybe a bit of an antiquated view because of what exactly you're talking about. Right. We need to know it works. We need to know what doesn't work. We need to prep. If you opened your doors like, for instance, if I just.

Seth Jenson (: 30:53

Mm-hmm.

Yeah.

Charles (: 31:13

tomorrow had a million people reach out, there's no way I could help that many people. I would flounder as a business and probably fail in a lot of ways.

Seth Jenson (: 31:21

Yeah.

Yeah, it's true. This does give you an opportunity to grow with the interest in your business, right? And again, when we say that the distinction I'd make to what you're saying is it's not that it's not all about the launch. It's about launching much smaller and faster, right? It's, you know, the best validation is launching, but it's not the full realized vision. It's your minimum viable product we talked about. It's selling the jankiest version of your product.

but seeing if people will pay for it, ⁓ And so, because the reality is you can't really know the demand risk or the channel risk until people are paying full price for it, right? And so you're trying to get to that as soon as possible without the trappings of a full-fledged business and employees and business insurance. And before you deal with all of that kind of structural stuff, you wanna make sure people are paying full price for the very simplest version of your product.

Charles (: 31:50

Yeah.

Seth Jenson (: 32:17

And so you're just trying to get there as soon as possible, right? And do so in a way that you understand not just, yes, they'll pay for it, but why they'll pay for it, right? You've done the work to test those assumptions and know, yep, they're gonna pay 12 bucks per cookie. And the thing that sells them is that it's thick, right? Like that's differentiates us. That's why they're willing to pay so much for my cookie as opposed to, you know, whatever, name all the million cookie places that exist now.

Charles (: 32:31

You

Seth Jenson (: 32:44

So, I hope you can see that process again. You're investing in your own expertise. You're testing the assumptions. You're de-risking demand and channels. And the way you're doing that is by learning from the power of the internet, Harness and AI. You're learning about people that have been there, done that, or are planning on buying your product. And then you're running real world experiments that involve money exchanges. Ultimately, right? Like not every experiment needs to do that, but eventually you've really got to prove that.

full price demand. And by doing all of this, at the end of the day, you're ready for execution because you know your stuff. You've done the work necessary to become an expert. And so when you go and try to hire a team, try to invest in a marketing strategy, you know what's going to work and not work because you've been there, done that. And that confidence is worth, it's priceless.

because it's gonna be such a trying journey that execution never goes how you think it will. So you need to approach it with the confidence of yes, I know how to get answers and I know my stuff.

Charles (: 33:34

Yeah.

You

Thanks for listening to the Unsexy Entrepreneurship Podcast. hope you learned something today. Validation is so important for our businesses. Please join us next week.