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The Startup Idea Rollercoaster

I recently had a session with a client who had a startup idea. Let’s call him Mr. Believer. He was convinced his idea was the next big thing and was ready to invest heavily in its development, even planning to take out a private bank loan. He even had a business plan!

Impressive, right?

Well, not so fast. When I started asking Mr. Believer about the evidence supporting his idea, he was a bit stumped. Sure, he had some general industry data, but nothing concrete to prove his idea would actually work in the real world. Uh-oh, red flag!

The Reality Check

I gently explained to Mr. Believer that it’s wise to start small and gather evidence before diving in headfirst with a big investment. After all, we don’t want to end up with a fancy business plan that’s just a collection of wishful thinking, do we?

I shared the concept of breaking down assumptions into testable business hypotheses. By identifying the underlying assumptions and testing them, we can validate the idea before going all-in.In fact, I once wrote an extensive article exploring what assumptions are and how to break them down into actionable business hypotheses. Understanding this is essential because our ideas often stem from assumptions that need to be validated.

Learning Point

The key takeaway for Mr. Believer was this: in the process of developing a new idea, the only thing that matters is checking how our assumptions relate to reality. E.g.: do people actually want to pay for our services?

So, if you’re a budding entrepreneur with a brilliant idea, remember: start small, test your assumptions, and gather evidence. Then decide.
It may not be as exciting as dreaming about the great success that is just around the corner, I know, but it’s the smart way to ensure your idea has legs before you invest a ton of money.

Trust me, your future self will thank you