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More than 80% of startups fail. And most of these fold because their creators misread the market demand.
These numbers are enough to make you dizzy, so I wanted to speak with Yannick Khayati, a digital native who, in his own words, is “somewhere in the field between marketing and innovation”.
Yannick loves innovation, so he decided to combine the two and launch what he calls an ‘actionable validation studio’.
“What we do is basically test ideas,” says Yannick of his agency, Cosmos Collective. “We want to see whether problems are big enough to be solved. We want to see if the solutions that entrepreneurs or companies have in mind are the right solutions for those problems.”
Yannick’s current motto is ‘test before you invest’. He believes that collecting data to confirm whether ideas have a market allows startups and corporations to make evidence-based decisions on whether to go ahead with – or kill – the projects they’re working on.
“I still see too few companies do that, and I think it’s one of the biggest pitfalls in innovation,” Yannick says. “There are a lot of examples of companies that launch new products or services without validating the market potential first.”
But what are the best ways to make sure your idea isn’t a dud?
Here’s Yannick’s advice, distilled from the podcast we recorded together on the fascinating topic of idea validation.
Keep the ‘3 buckets’ in mind
You have 3 buckets within idea validation, according to Yannick: the problem, the solution and the market.
“In each of those 3 buckets, you’re going to start from the assumptions you have,” the founder says. “You need to find out, ‘are a lot of people actually having this problem? How are they currently solving it? Are they paying to solve it?’
“All these kinds of questions will help you find an answer in the markets and to launch the product or service the company has in mind.”
During the idea validation phase, Yannick says you’ll often see a concept shifting to an entirely different proposition. But that’s the beauty of the testing process.
Don’t wait too long
Companies often have build cycles where it takes two or three years before a new concept actually sees the market – and Yannick feels that this is far too long.
“It’s something I really want to change,” the consultant says. “You can bring things to the market faster by setting up a continuous feedback loop with your end customer.”
That’s what Yannick’s agency aims to do: breathe life into ideas super quickly.
“I’ve seen a lot of examples of companies working on a concept, product or service for two to three years and once they launch it, it’s not even relevant anymore because the market has changed,” says Yannick. “Having no market need is still the biggest killer of companies that fail today.”
Focus on solutions rather than ideas
One of the biggest misconceptions when it comes to launching new products or services? Everyone thinks a successful company starts with a great idea. But, in Yannick’s opinion, it actually begins by solving a big problem that needs a solution.
“For me personally, it’s almost never about the idea – and there’s a simple reason behind that: because an idea is never unique,” Yannick explains. “It’s a combination of a series of things that you saw and drew together. You can be 200% confident that whatever idea pops up in your head, at least some other person in the world has had exactly that same thought.”
A good idea is always based on personal opinion, says Yannick, so you need to implement a validation process to make sure it can work. He refers to The Mom Test by Rob Fitzpatrick, which points out that your family and friends might just be telling you that your idea is good because they don’t want to hurt your feelings.
“Unless someone is giving you money for the idea or using the idea, then it’s actually not a good idea,” says Yannick. “The key is to find the problem you want to solve and then find people who have that problem.”
Test the idea in its simplest form
Yannick suggests taking steps back to the assumptions you’ve made about your idea and turning them into hypotheses. This will make your concept measurable and helps you to figure out what you want to test.
He gives the example of a time when he was working on an app to help people eat more healthily. The company that consulted him wanted to test the idea first – without building the application – so Yannick explained that what they needed to do was focus on people’s behaviour.
“We made a no-code chatbot using the tool Many Chat in just a couple of days and recruited people via social media with a landing page detailing the value proposition,” Yannick explains. “Then we took them through an experiment. We assessed those people and asked them all kinds of questions: ‘How many times a week do you eat red meat? How many times do you order food online or eat fast food?’
“Based on that assessment, we gave them a fully automated profile. They had the minimum viable app experience, but in the end, after three weeks running the experiment, we could easily say our idea or recommendations changed their behavior.”
Make sure your tests are extensive enough
You may see a lot of people on Twitter say, ‘I have a landing page with 200 signups. My idea is validated.’
But that’s not necessarily the case, according to Yannick.
“There should always be enough strength of evidence, and how we do it [at Cosmos Collective] is by actually running experiment sequences,” he says.
“So, let’s say you have one assumption or hypotheses. Then you start with a landing page with the value proposition and you have Facebook and Instagram ads going to that landing page. You see whether people fill in the form.
“Once they do that, you call them or email them and investigate further. Then you take them to another experiment – for example, the chatbot I mentioned. The more you learn through this continuous feedback loop with the end customer, the less fragile your idea is going to be when you launch it.”
It’s not rocket science, Yannick points out, yet only a few companies actually do this.
Co-create with your customers
Yannick champions the concept of building in public, giving the example of an app-only Belgian supermarket he’s worked with. Before they started building the application, the company opened up a waiting list by creating a simple landing page that explained the value proposition and let people sign up for early access.
“We automatically sent people a survey where the last question was, “Can we call you for a 15-minute interview on the future of Local?” says Yannick.
“A lot of the early adopters wanted to participate and share their opinion. And we got more insight on how they were currently shopping for groceries and how they felt about their weekly menu at home and these kinds of things. When we launched the application, we included a range of products that we initially weren’t going to add, so I think listening to your customer is always a really good thing.”
Launch with an MVP
The biggest mindset shift that should happen is that you can launch with an MVP, says Yannick. And thought leaders like Alex Osterwalder and Elon Musk agree.
“There’s a famous quote, ‘If you’re not embarrassed about your MVP, you waited too long to launch’,” says Yannick. “And this perfectly resonates with me because people should build things in public to collect the right feedback and create the perfect product in the end.”
You can also listen to the podcast episode here.