Validate Your SaaS Idea FAST (Step-by-Step SaaS Validation Process)💡✅

Summary

In this video, Rob Walling outlines a step-by-step process to validate a SaaS idea within 30 days. He differentiates between idea evaluation and validation, emphasizing the continuum of validation. Walling discusses two primary methods: using landing pages for low-touch funnels and conversational validation for high-touch funnels. He also shares his experience with a third approach, combining both methods, which he finds most effective. The video offers practical advice on building email lists, driving traffic, and conducting valuable conversations to gauge interest and secure pre-sales commitments.

Takeaways

• 📈 Rob Walling, an experienced entrepreneur, discusses two primary methods for validating a SaaS idea: verbal commitments or pre-sales and landing pages.
• 🔍 Idea evaluation and validation are distinct processes; evaluation uses criteria to assess an idea, while validation involves steps to confirm market interest.
• 📊 The 5 PM framework is a tool for evaluating SaaS ideas, which is detailed in episode 628 of the podcast 'Startups for the Rest of Us'.
• 💡 Validation is not a binary outcome; it's a continuum that helps gauge the potential of an idea without reaching absolute certainty.
• 🛠️ Landing pages are effective for low-touch or no-touch funnels, aiming to build an email list to gauge interest and facilitate early conversations.
• 🗣️ Verbal commitments or pre-sales are suitable for high-touch funnels, involving direct conversations to secure commitments before development.
• 👥 The 'curse of the audience' is a pitfall where an audience's bias towards the creator can skew feedback, potentially leading to misguided validation.
• 🔗 Building a network or having an existing one provides an advantage for validation, as it allows for more meaningful and directed conversations.
• 📱 Cold and warm validation strategies differ in approach; cold involves reaching out to new contacts, while warm leverages existing relationships.
• 💼 The 'Mom Test' book offers guidance on asking questions to avoid leading responses and to genuinely assess the viability of a SaaS idea.
• 🌐 A combination approach, using both conversations for initial validation and a landing page for broader interest, can be highly effective, as demonstrated with the validation of Drip.

Q & A

What is the main focus of the video?

The video focuses on providing a step-by-step process to validate a SAS (Software as a Service) idea in less than 30 days, discussing two common methods and introducing a third approach that the speaker finds even better.

Who is Rob Walling and what are his qualifications for discussing SAS ideas?

Rob Walling is an entrepreneur who has started six companies, written three books on building startups, and invested in over 100 SAS companies. He is also the host of the podcast 'Startups for the Rest of Us'.

What is the difference between idea evaluation and idea validation according to the video?

Idea evaluation involves running an idea through a set of criteria, while idea validation is about taking steps to find out if people are interested, if you can gather traffic, and if it's a reasonable idea to pursue.

What is the 5 PM framework mentioned in the video?

The 5 PM framework is a method for evaluating SAS ideas, which is discussed in detail in episode 628 of the podcast 'Startups for the Rest of Us'.

Why does Rob Walling suggest that validation is a continuum?

Validation is considered a continuum because you can never be 100% certain about an idea's success. Even with significant validation, such as having a large email list and预售订单, there's still a level of uncertainty.

What are the two most common ways to validate a SAS idea discussed in the video?

The two most common ways to validate a SAS idea are through verbal commitments or pre-sales and using landing pages.

What is the significance of the 'curse of the audience' mentioned in the video?

The 'curse of the audience' refers to the tendency of an audience to tell creators what they want to hear, which can lead to false validation of an idea because the audience is trying to be supportive rather than critical.

Why does Rob Walling recommend building an email launch list when validating an idea with a landing page?

Building an email launch list is significant because it helps gauge interest and allows for direct communication with potential customers, which can guide product direction and generate early revenue.

What are some strategies for driving traffic to a landing page for validation purposes?

Strategies include discussing the idea on social media, engaging in entrepreneurial groups, using platforms like Beta list, Reddit, and even employing pay-per-click advertising.

How does conversational validation differ from validation via landing page?

Conversational validation, also known as customer development or getting pre-purchases, involves direct conversations with potential customers to gauge interest and secure verbal commitments. It is more suited for medium or high-touch funnels.

What is the third approach that Rob Walling suggests for validating a SAS idea?

The third approach combines both verbal commitments or pre-sales and landing pages. It involves having initial conversations to gauge interest, then building a landing page to create an email launch list while the product is being developed.

Outlines

00:00

📊 Validating a SAS Idea: Methods and Strategies

In this video, Rob Walling discusses the process of validating a SAS (Software as a Service) idea within 30 days. He differentiates between idea evaluation and validation, emphasizing that validation is an ongoing process to gauge interest and gather traffic. Rob shares his experience with validating various SAS products and highlights the importance of the 5 PM framework for idea evaluation. He introduces two common validation methods: verbal commitments or pre-sales, and landing pages. The video also mentions a third, more effective approach that combines elements of the first two methods. Rob discusses the 'curse of the audience,' cautioning against relying too heavily on an existing audience's feedback, which may not accurately reflect market demand.

05:00

🌐 Landing Page Validation for Low-Touch Funnels

Rob Walling explains the use of landing pages for validating SAS ideas, particularly for low-touch or no-touch funnels. The goal is to build an email launch list to gauge interest and capture potential customers' contact information. He suggests various methods for driving traffic to the landing page, such as social media, entrepreneurial groups, and even pay-per-click advertising. The key metric for success is the percentage of visitors who opt-in to the email list. Rob advises that a high opt-in rate indicates potential interest in the product. He also mentions that reaching out to people on the list can provide valuable insights and help guide product development.

10:01

🗣️ Conversational Validation: High-Touch Funnels and Pre-Sales

The third paragraph delves into conversational validation, also known as customer development, which is suitable for medium or high-touch funnels. Rob describes two approaches: cold validation, which involves making unsolicited calls to potential customers, and warm validation, which leverages an existing network or audience. He shares his personal experience with warm validation, reaching out to a network of founders and speakers to gauge interest in a new tool. Rob emphasizes the importance of honest conversations that aim to understand whether potential customers would be willing to pay for the product. He also recommends the book 'The Mom Test' for guidance on conducting these conversations effectively.

Keywords

💡SaaS

SaaS stands for Software as a Service, which is a software licensing and delivery model in which software is centrally hosted and made available to customers over the internet. In the context of the video, SaaS is the main theme as the speaker discusses strategies for validating SaaS ideas before investing significant resources into development.

💡Idea Validation

Idea validation is the process of confirming the viability of a business idea by gathering evidence and feedback from potential customers. The video emphasizes the importance of validating a SaaS idea to ensure there is market interest before proceeding with development, which is crucial for reducing risk and increasing the chances of success.

💡5 PM Framework

The 5 PM Framework is a tool mentioned in the video for evaluating SaaS ideas. It's a systematic approach to assess the potential of an idea based on certain criteria. The video suggests that while the 5 PM Framework is useful for evaluating multiple ideas, it is not the focus of this particular discussion, which centers on validation methods.

💡Prototype or MVP

A prototype or minimum viable product (MVP) is an early version of a product with just enough features to satisfy early customers and provide feedback for future development. The speaker advises against building a prototype or MVP as the first step in validation, suggesting instead that it should come after initial validation through landing pages or verbal commitments.

💡Landing Page

A landing page is a standalone web page, designed for marketing or advertising purposes. It is used to capture leads or gauge interest in a product or service. In the video, the speaker discusses using a landing page to validate low-touch SaaS ideas by building an email launch list to measure interest and potential customer engagement.

💡Email Launch List

An email launch list is a group of people who have opted in to receive updates about a product or service before it launches. The video highlights the importance of building an email launch list as part of the validation process, as it helps to measure genuine interest and provides a platform for future communication and potential pre-sales.

💡Verbal Commitments or Pre-Sales

Verbal commitments or pre-sales refer to expressions of interest or intent to purchase a product before it is officially available. The speaker discusses this as a method of validation for higher-touch SaaS ideas, where having direct conversations with potential customers can provide valuable insights and commitments that indicate market demand.

💡Low-Touch Funnel

A low-touch funnel implies a sales process that requires minimal human interaction, often relying on automated systems and online marketing. The video explains that validating a SaaS idea with a low-touch funnel is appropriate when the product is likely to be sold through automated means, such as through a website or app.

💡High-Touch Funnel

A high-touch funnel involves a more personalized and interactive sales process, often requiring direct sales efforts and customer engagement. The video suggests that for SaaS ideas that will be sold through a high-touch funnel, validation might involve more direct conversations and potentially pre-sales to gauge interest and gather feedback.

💡Cold Calls

Cold calls are unsolicited phone calls to potential customers or clients. The video references the use of cold calls as a method of validation, particularly for SaaS ideas that require a more personal sales approach. It mentions a case study where a founder made numerous cold calls to validate their SaaS idea.

💡Warm Validation

Warm validation involves reaching out to people within one's existing network or audience for feedback and interest in a product or service. The video contrasts warm validation with cold calls, suggesting that leveraging existing relationships can provide more fruitful and less challenging validation experiences.

Highlights

Rob Walling introduces two common methods for validating a SaaS idea and hints at a third, better approach.

The distinction between idea evaluation and validation is clarified, with evaluation being criteria-based and validation being about gathering interest and traffic.

The 5 PM framework for evaluating SaaS ideas is mentioned, with a reference to episode 628 for further details.

Validation is described as a continuum, with no absolute certainty but rather a series of steps to gauge interest and feasibility.

Rob shares his experience validating various projects, emphasizing the importance of pre-validation before development.

The State of Independent SaaS survey data is presented, showing the most popular methods for idea validation among SaaS founders.

A critique of building a prototype or MVP without prior validation is offered, suggesting it could lead to wasted effort.

The 'curse of the audience' is introduced as a pitfall of relying too heavily on existing audience feedback for validation.

The strategy for validating a low-touch or no-touch funnel using a landing page is explained, focusing on building an email launch list.

Various methods for driving traffic to a landing page are discussed, including social media, community engagement, and paid advertising.

The significance of email list opt-ins as a validation signal is highlighted, with examples of success rates.

A case for conversational validation, or getting verbal commitments/pre-sales, is made for medium to high-touch funnels.

The difference between cold and warm validation approaches is outlined, with examples and strategies for each.

Rob recounts his personal validation process for Drip, combining early conversations with a landing page strategy.

The importance of not leading potential customers during validation conversations is emphasized, to ensure genuine feedback.

A recommendation for the book 'The Mom Test' is given as a resource for learning how to ask effective validation questions.

The video concludes with a call to action for viewers to like and subscribe for more SaaS validation and growth content.

Transcripts

in this video I'm going to walk through

a step-by-step process to validate your

SAS idea in less than 30 days in fact

I'm going to walk through the two most

common ways to validate a SAS idea and

if you stick around until the end I'll

tell you a third approach that I think

is even better I'm Rob Walling I've

started six companies I've written three

books on building startups and I've

invested in more than 100 SAS companies

so I want to start off by talking about

the difference between idea evaluation

and idea of validation so evaluation is

where you take an idea and you run it

through criteria and I actually have a

framework called the 5 PM framework for

evaluating SAS ideas and if you want to

hear about evaluating an idea and you

want to hear about this 5 PM framework

head to episode 628 of the sister

podcast to this YouTube channel it's

called startups for the rest of us where

I walk through this framework of How to

Think Through evaluating an idea and

this is really helpful if you have 10

ideas 20 ideas you can't validate all of

them right validation is where you start

taking steps to find out if people are

interested if you can gather the traffic

and if this is going to be a reasonable

idea to pursue validation is a Continuum

you're never going to get to 100 with a

ton of validation a bunch of people on

an early access email list and 20 30 40

people who have committed to pay for it

you're still at what maybe 60 70 that

this is going to work you're just never

gonna get to 100 validated and in my

career I validated a lot of things so I

validated a SAS app called drip before

we wrote a line of code I validated my

first book start small stay small with a

landing page I validated our conference

microcomp that you know this YouTube

channel is named after the company

microcomp I validated my SAS accelerator

called tinyseed before we did anything

we put up a landing page because we

wanted to see if there was interest from

Founders and interest from investors and

lastly I validated an online community

that started about a decade ago for

early stage startup Founders by putting

up again a landing page finding out if

people were interested in this video I'm

going to focus on two approaches to

validation but I did want to talk about

kind of the gamut of approaches that we

see in the independent SAS space so

microcomp runs a state of independent

SAS survey where we survey hundreds of

bootstrap and mostly bootstrap really

non-venture track SAS Founders and we

put together a report every year and in

the 2022 report we asked folks how did

you validate your idea and from most

popular to least popular the options

were 33 percent built a prototype or an

MVP 20 asked Their audience 18 combined

got verbal commitments or pre-sales

seven percent copy to competitor seven

percent put up a landing page now what

I'm going to do in this video I'm going

to talk about the verbal commitments or

pre-sales and I'm going to talk about

landing pages and which you use depends

on the space you're going into whether

it's high touch or low touch if you look

at this list of approaches to validating

really the Prototype or MVP in my

opinion should come after you've set up

an ending page or you've done your

verbal commitments or pre-sales I feel

like just building a prototype or MVP is

probably a recipe for really not

validating because you're putting in

work before you go have these

conversations in addition asking your

audience which is also a popular one I

think can be pretty dangerous there's

this thing I call the curse of the

audience and it's where your audience

really likes you and if you say would

you like a new tool that does XYZ they

often will tell you what you want to

hear because a they like you they're

trying to support you they're not trying

to make you feel bad and B an audience

no matter how big you're gonna Plateau

I've seen it firsthand I've seen it

secondhand a lot of folks with small to

medium size audiences launch that SAS

and they get up to a thousand 5K maybe

10K a month and that's it and then they

Plateau so today I'm not going to assume

that you have an audience and the other

one I'm not going to cover is copying a

competitor I think that's interesting

validation I actually don't think that's

a terrible way to go as long as you have

some type of differentiation but we're

not going to cover that in this video as

I said we're going to cover landing

pages is for low touch funnels and I'm

also going to cover having conversations

and getting either verbal commitments or

pre-sales so with that let's dive into

validation via landing page so you want

to validate via a landing page when a

it's really a low touch or no touch

funnel if you're not sure what those

terms mean we have a companion video on

the best SAS funnels to use and you can

search this Channel or just look in the

description of this video and we'll link

to it but essentially what you're trying

to validate here when you have a low or

no touch funnel is can I drive enough

traffic to make this make sense that's

kind of your first risk the other risk

is can I build something that this

traffic will want to buy but

realistically then you have to go build

it because let me give you an example if

you're building something that's going

to be ten dollars a month twenty dollars

a month going out and building that and

trying to have conversations with

individual people I question if that's a

great use of time I actually think

there's a bigger risk and can I just

Market this thing can I get people to a

site and in the end if you do get a

thousand or ten thousand people a month

coming to some site a landing page or a

full-blown blog if you get folks coming

to that looking for something the odds

are reasonable that you may be able to

spin that into something that these

folks actually want and are willing to

pay for and the idea with building a

landing page is to really build an email

launch list because just having people

coming to a site is fine but getting

them on a launch list getting them to

opt in is really the measure that you're

looking for if you're sending 5 000

people a month via these traffic

channels I'm about to mention and no

one's signing up for your email list you

have a problem the typical approach to

getting traffic to that landing page is

to talk about it a lot to talk about

your idea to go on social media you can

ask for advice or you can tell people

what you're building you can talk about

it in entrepreneurial groups like

microcomp connect the SAS community that

is connected to this YouTube channel or

Community like Indie hackers or even

like show Han which is Hacker News you

can go to Beta list and add your idea

there you can go to Reddit you can do

podcaster YouTube tours q a sites like

quora and stack exchange I've seen folks

build pretty amazing launch lists or

even an actual product you know do

marketing on those sites or you can even

use pay-per-click I did this when we

were validating drip I drove traffic

from Facebook ads and Google AdWords to

our landing page to see if people were

interested in a new type of email

service provider and the idea behind

this list is a to gauge are people

interested and B to start having

conversations with folks on that list

you can guide your product Direction you

can get early Revenue when you launch

and really it's a mechanism to have this

tightly knit audience even if you

already have an audience whether it's on

social media or something else getting

people to opt in to want to hear about

the that particular idea or who at least

are acting like they're interested in

that particular idea can have a lot of

value and so those are the ways that I

would send traffic to the landing page

and the question is you know how do you

validate an idea by doing this and I

said it earlier but if no one's signing

up for that email list it's probably not

a great idea if you're getting 10 of

people five percent of people who hit

your your landing page to sign up for it

that's interesting you know it depends

on the type of volume you're sending I

had a landing page at one point where I

got 30 opt-in like that the traffic was

so tightly connected to the message it

was such a good fit that 30 of people

who visited opted in that's a pretty

high number if you're having more cold

traffic sending Facebook ads or whatever

you're probably gonna get in that five

percent 10 range and consider it a

success now this doesn't fully validate

the idea you're not at 100 but at least

you have a signal you have one more

signal than you had in your evaluation

that 5 PM evaluation framework and from

there I'd start reaching out to people

on the list what might you be willing to

pay for it what exactly do you want me

to build and from there it becomes

conversations and once you have some

initial commitments and your idea is

roughly validated it may be time for you

to build a prototype or an MVP if you're

not a technical founder or you're

looking for an experienced developer to

help you build that mvp you should check

out this video sponsor lemon.io cut down

on hiring Time by working with vetted

developers at competitive rates get 15

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their Engineers by going to lemon.io

slash microcomp that's lemon.io slash

microphone so now let's switch it up and

talk about conversational validation

this again is also called customer

development it's called getting

pre-purchases or just verbal commitments

this is not something that you're going

to drive traffic to you know a website

later on and people are going to convert

automatically even if it's not

Enterprise maybe it's a one call close

you do a demo and you you know you get

folks to sign up this is a really good

approach to validating ideas that are

have more of a medium or a high touch

funnel and I've seen folks do this in

two ways you can do cold or you can do

it warm and to hear the story of a

Founder who made 70 cold calls to find

and validate their SAS idea check out

episode 589 of startups for the rest of

us and you'll hear how the founders of

senior Place validated their startup

idea it's a great story but it involved

making a bunch of cold calls and saying

I have this idea would you buy it and

what he found out was people weren't

interested in the idea he was thinking

about building they were are interested

in a slightly different idea and so

before they wrote new code they had

already pivoted into this other idea and

they've had pretty amazing success since

then so that's cold validation let's

talk about warm validation this is where

you look at your network or at your

audience and I know I talked earlier

about asking your audience can be

dangerous but realistically for asking

them in aggregate I think there's more

danger there if you're having individual

conversations with people it can be

interesting like you can learn a lot

from them and so the idea is like look

for advantages when you choose ideas if

you have a network or an audience

launching into that space you have a

unique advantage that other people don't

have now I like to say if you're

launching SAS build a network not an

audience so if I didn't have either I

would start by trying to build a network

in this space if I already had one or

the other it's an unfair advantage and

you can use it because you can go to

your network which is what I did when I

validated drip and I emailed a bunch of

Founders that I knew speakers at

microcomp folks we'd hosted over the

years and I asked them would you be

interested in a tool like this or if you

have an audience you can obviously start

talking about it and either Drive folks

to a landing page or invite people to

connect with you directly and then have

those one-on-one conversations and these

conversations are not a sales pitch in

fact in my calls when I've validated

ideas I would lead with you know I'm a

developer not a sales person I have this

idea and I'm curious if you'd be willing

to pay fifty dollars like is this worth

fifty dollars a month to you and then I

would describe the value prop and kind

of how it would work and when I

validated drip I had 17 phone calls and

I wanted to get to 10 yeses that my goal

was 10. now Jason Cohen from WP engine

you can look them up he's an amazing

entrepreneur he validated WP engine I

believe he got 40 yeses before he was

going to set out to build it for me I

wanted 10 yeses and at that point I told

my developer start building this idea if

you want to hear the full story of how I

validated drip and even see the content

of the emails I was sending out to my

warm Network check out the YouTube video

on this channel called how to validate

your idea and launch to 7K in recurring

Revenue in addition if you want to go

deeper on this there's a book called The

Mom test that talks about how to ask

questions during this phase in a way

that doesn't lead them you're not

pushing them you're not trying to sell

them on this you really are trying to

find out would they pay for this you

want the honest answer would they pay

for this if you built it in a minute I'm

going to tell you about the third

approach that I think is an even better

option if you've been enjoying this

video it would be amazing if you could

hit the like button and subscribe to

this channel we're putting out videos

like this every week tactical deep dives

into validating building launching and

growing your SAS company so this third

option I want to talk about is actually

what I did with drip and I did both of

the above I had conversations early on

to find out if people were interested in

paying for it then once they were the

developers started working on it and I

built a landing page and then I went and

did all the marketing approaches that I

talked about above and I wanted to build

that pre-launch list you know I didn't

just want 10 people interested in the

end we had I believe 3 400 people on an

email launch list that were interested

in our product and it made our launch

day pretty incredible thanks so much for

joining me today hope you enjoyed as I

walked through how to validate your SAS

idea in less than 30 days I'll see you

in the next video

[Music]