Startup Idea Validation 5 Successful Examples

Startup Idea Validation: 5 Successful Examples

Every business idea or startup idea has to be tested.

Startup idea validation can save you time, resources and point you out in the right direction so that you take the right decisions and reach the best target audience for your startup.

Many successful startups had validated their ideas long before they decided to build a minimum viable product.

Simply put, they answer the “how do I validate my startup idea” early on — and in their own way — and decided to move on building a minimum viable product

In this article, we are going to present five key examples of startup idea validation, along with useful learnings that will help you understand how you can put your business ideas into test.

So, if you are wondering how to validate your startup idea, just keep reading.

Contents

Example 1: Drift

Example 2: Buffer

Example 3: MailChimp

Example 4: Hootsuite

Example 5: Hubspot

Last Thoughts

Example 1: Drift

Drift is a startup that made the term “conversational marketing” popular.

It is a bright example of how successful a SaaS can become by using customer feedback to build a stellar product.

The CEO of Drift David Cancel is a serial entrepreneur and investor who has founded 5x startups and worked as a CPO in Hubspot.

David is a problem-solving genius who always puts customer validation at the top of his list.

Along with his Co-founder (and Drift’s CTO) Elias Torres, they decided to start Drift in 2015 to change the way B2B businesses communicate with their customers.

With more than 100,000 businesses using Drift in just three years from launch, it is only natural that Drift is doing something right —

It is without a doubt that part of Drift’s tremendous success is David Cancel’s profound knowledge on building products that help people solve real problems.

Drift Home Page

In an interview he gave to Chad Pytel from thoughtbot, Drift’s CEO and Co-founder talked about the early days of Drift and how they startup idea with the help of their early adopters.

As David remembers:

David Cancel

“We had an idea, a product concept of what we were trying to do, the kind of change we saw in the world and we were basically validating that, from working since day 1 with a handful of groups of customers.”

He continues saying that they were so busy investigating and looking for answers to key questions, that they didn’t have the time to build a website or even a single landing page.

Only after a long period of investigating different target groups and finish with the validation process, they launched a minimum viable product.

It is evident that in the beginning, the two startup founders didn’t care for the messaging, the value proposition, the positioning statement or the back-end of their product —

All they wanted was to validate their business idea, based on the interviews and the customer feedback they were gathering.

And, from Drift’s tremendous success, we can say that they managed to do it pretty well.

Next, we’ll see how Buffer managed to validate their startup idea.

Example 2: Buffer

If you are using social media for business purposes, then chances are you’ve heard of Buffer.

Buffer is a social media management (SMM) platform that allows you to compose and schedule posts for social networks like Facebook, Instagram and LinkedIn.

It generates over $15 Million in ARR, and it’s users sent 325,279,525 posts through Buffer in 2017 (+24.4% than 2016).

But, how did Buffer’s founder managed to validate their startup idea and attain such exponential growth?

As Joel Gascoigne, Buffer CEO explains, validation played a crucial role in Buffer’s success.

In Joel’s words:

Koel Gascoigne

“My failure with the previous startup combined with the ideas around the Lean Startup gave me a key realisation: if I wanted this idea to be more than just a hobby and tool for just myself, I needed to test whether other people would find the idea useful.”

Taking a lean approach and using the principles of the Lean Startup by Eric Ries, Joel decided to build a 2-page website:

Buffer Website

Up until that time, he didn’t invest any time creating a minimum viable product or any other assets whatsoever.

People who visited the landing page and put in their Email then received a personalised Email that asked for their feedback on Joel’s idea.

The outcome of these conversations and initial feedback was critical and made Joel understand that real people found the idea to be solid —

All that Joel needed at that time was to test if people would be willing to pay for his product.

Thus, he built a third landing page and shared it in his Twitter account.

People responded, and this time Joel got more Emails than lead to conversations —

These conversations were mainly focusing on figuring out the perceived value of the product and whether or not real people would be willing to pay for it.

The feedback was excellent and helped Buffer form it’s messaging and value proposition.

The rest is history, but these were the early days of startup the met tremendous success afterwards.

Example 3: MailChimp

MailChimp is the biggest and most popular Email marketing service provider in the world.

Would you like to know how MailChimp managed to validate its startup idea? Here is how.

As of January 2017, MailChimp served more than 14 Million users in more than 200 countries.

Would you be surprised if you knew that MailChimp started as a side project?

In 1999, Ben Chestnut, MailChimp Co-founder and CEO, founded an e-greeting website which shortly after proved to be a failure.

A while after that, along with his Co-founder Dan Kurzius, they started a web design agency.

MailChimp Founders

While doing client work, they came to a realisation — that realisation was that people needed Email marketing services.

According to MailChimp CEO, this is what the majority of their clients asked them at that time:

“This is a great website you are building, but can you help us with this thing, Email marketing?”

After helping quite a few clients and having the codes and everything from their failed project (the e-greeting company), they realised that they could build something out of it.

The tool they built was MailChimp.

Freddie - MailChimp Mascott

For several years, MailChimp remained a side-project, but in 2007 Ben & Dan decided to go all in for MailChimp and shutter the web agency once and for all.

The rest is history, but the lesson I’d like to instil here is this:

By taking customer feedback from real people, people who were paying for their web design services, MailChimp founders managed to validate their business idea;

Besides, seeing the growth potential that this idea had related to a web consulting agency made them realised how fast this whole thing could grow.

In a nutshell, Ben and Dan managed to find market validation from a failed side-project.

Let’s move on to the next one. 

Example 4: Hootsuite

The 4th example we are going to present is Hootsuite.

If you are a startup founder or marketer, then you probably have heard of Hootsuite.

It is a Vancouver-based social media marketing and management dashboard that can help you manage your social accounts and grow your online presence.

With more than 16 Million businesses as customers and $50 Million in growth capital, it is a success story that started the early days of social media.

So, what’s the story behind it and how did Hootsuite manage to validate its initial startup idea?

In 2008, the digital agency Invoke Media ran by Ryan Holmes, released a tool called BrightKit.

BrightKit

They released it to help Twitter users manage multiple Twitter accounts from one dashboard.

As Ryan remembers:

“Logging in and out of different clients’ social networks was a headache, so my team created a tool to monitor multiple accounts on one dashboard.”

However, was that enough to validate their business idea?

In 2007, a year before BrightKit was officially launched, Techcrunch France Ouriel Ohayon ran a poll asking his readers how many Twitter accounts they have.

He was surprised to see that 53% of Twitter users at that time used more than one Twitter account.

Even though the sample size was small, this was a validation signal for BrightKit — and, along with Invoke’s client needs, it was the green light for a tool that would help Twitter users manage multiple accounts at once.

In 2009, BrightKit changed to HootSuite (with S instead of s) and — once again — the rest is history.

Hootsuite managed to validate their product idea by identifying a need and by using feedback from real people who had a problem their minimum viable product could solve.

Example 5: Hubspot

I saved the best for last.

Hubspot is a marketing, sales and service software that started in 2006 by Co-founders Dharmesh Shah and Brian Halligan.

Nowadays, Hubspot has more than 48,000 customers in 100+ countries and 1,960 employees on its premises.

Hubspot and “Inbound” is almost synonymous, as Brian Halligan coined the term “Inbound Marketing” back when Hubspot was starting.

Inbound nowadays is an annual conference with over 24,000 attendees in 2018 that represents 104 different countries.    

But, how Hubspot — as a startup back then — validated its startup idea?

With one word: content.

Before Hubspot as a product — as a SaaS, there was Hubspot as a blog that covered topics around inbound marketing.

Hubspot Blog

The two ingenious founders used a blog to validate their idea (besides from having fun with what they were doing) and understand the needs and interests of their visitors.

In the pre-social media age, a blog was the only way to generate awareness about a product or idea and to let people (your potential customers) know about it.

Hubspot Interest Over Time

Hubspot managed to validate their product concept, which was not even written at that time through their blog.

It is in fact that content is one of the best ways to validate an idea and build an audience long before you have a minimum viable product in place.

Last Thoughts

I hope this article helped you answer the question:

“How to validate a startup idea?”

According to Paul Graham:

“The most common mistake that startups make is to solve problems no one has.”

Here, we could add that:

The 2nd most common mistake that startups make is that they are not validating their startup ideas before building something out of them.

The process of market validation, startup validation or idea validation is mandatory if you want to increase your chances of success.

The examples presented above paint a clear picture: there isn’t a better way to start a startup business, by testing your idea before deciding to build an actual product.

Truth been told, today’s entrepreneurs have all the means to test and validate their ideas before launching a business.

Channels that you can use as validation tools include Facebook Groups, Facebook Ads, LinkedIn Groups, Quora, Reddit, Google Adwords and even Amazon.

Use them wisely, and the results will come.

About the Author: Aggelos M

I have over 8 years experience in Digital and Growth marketing. Currently, running Growth Sandwich, a London based Growth hacking Lab. Before turning in Growth hacking and viral marketing, I had the chance to pass by head marketing and head digital positions in Athens and London, work with numerous tech startups but also build and run companies. In my spare time, he is consulting ambitious startups about their Growth and Business strategy.