How Little Can You Spend to Find Out?

One of the easiest things to do with a new idea is get ahead of yourself.

Build the website.

Design the logo.

Form the company.

Buy equipment.

Rent space.

Maybe even hire someone.

All before knowing whether anybody really wants what you're selling.

I’ve become a much bigger believer in doing the opposite.

How little can you spend to find out if an idea has legs?

Sometimes the answer is surprisingly little.

Sell the service before building the infrastructure.

Make ten instead of a thousand.

Borrow or rent the equipment.

Use someone else’s space.

Put up a simple landing page.

Call five potential customers.

Build the ugly prototype.

Ask someone to pay for it.

There’s a term for some of this—bootstrapping—but I think of it more simply as reducing the cost of being wrong.

Because most new ideas won't work exactly the way we imagine.

The customer might be different.

The price might be wrong.

The problem may not matter enough.

Or something you thought was a small part of the idea may turn out to be the real opportunity.

The less you've committed, the easier it is to learn and adjust.

I've always liked businesses that can start small.

A customer funds the first job.

A prototype leads to a licensing conversation.

A side project generates enough revenue to fund the next step.

You learn before you scale.

There are certainly businesses that require significant capital upfront.

But a lot of ideas don't.

Before asking, “How do I fund this?”

I think there's a better question:

“What's the cheapest way I can find out if this is worth funding?”

Sometimes a few hundred dollars and a real customer can teach you more than a hundred-page business plan.