The Essentials: Validate — Software Publishing & SaaS

How do I validate the problem?

Interview 15-25 people in your target role about how they handle the task today, how often it happens, how long it takes, what it costs, and what they have already tried. Ask about past behavior, not opinions about your idea; Rob Fitzpatrick's book The Mom Test is a good guide. If they describe the problem as annoying but not costly, or have not looked for a fix, willingness to pay is likely weak. Record and tag each interview by pain level, current tools, budget owner, and buying process, and look for patterns, not one enthusiastic person.

How do I test pricing with real money?

An email waitlist shows curiosity. A pre-sale, deposit, paid pilot, or signed letter of intent shows intent. Put a pricing page or a checkout link, such as Stripe Payment Links, in front of qualified prospects, and ask for a card or a deposit. Card processing usually costs about 2.9% plus 30 cents per transaction in the US. Test two or three price points, and ask what they use now and what they pay for it. If nobody will commit even a small amount before the product exists, be skeptical they will convert to a paid subscription later.

What is the smallest MVP that tests the risk?

Find the riskiest assumption: usually that customers will pay for one core workflow. Build only that. Use no-code tools, spreadsheets, clickable Figma prototypes, or manual back-end service, often called concierge MVP, to deliver the outcome before you automate. Set a success measure, such as 10 paying customers or three signed pilots at a specific price within 60 days. Many successful products started by doing one thing well and leaving obvious gaps.

How do I use the product-market fit test?

Sean Ellis's survey asks active users how they would feel if they could no longer use the product; if at least about 40% answer very disappointed, that is a common sign of fit. Use it with users who have tried the product enough to judge it, and pair it with retention data, such as how many customers are still active after 30 and 90 days, and qualitative interviews about why they would miss it. A low score means learn more before spending on growth, not scale acquisition.

How big does the market need to be?

Do simple math. If your price is $100 per month, you need about 833 customers for $1 million in annual recurring revenue ($1,000,000 divided by $1,200 per customer). At $500 per month, you need about 167. Then ask how many companies or people in your segment fit the profile, and what share you could reach in three years. A painful problem in a tiny niche can still be a poor business, while a modest price in a large market may work only if acquisition cost is low. Check that your target segment has a reachable channel.

How do I validate the distribution channel?

A validated problem still fails if you cannot reach buyers affordably. Test at least one channel: outbound emails to 100 target buyers, a small paid search campaign around problem keywords, a content post in a niche community, a partner or marketplace listing, or founder-led demos. Measure response rate, demo booking rate, and cost per qualified lead. A common rule of thumb is that customer acquisition cost should be recovered within 12 months of gross profit, and lifetime value should be around three times acquisition cost; treat these as targets to check, not promises.

What compliance issues might change my plan?

If your product touches health data, financial data, children's data, or personal data of EU residents, learn the obligations early: HIPAA and business associate agreements, GLBA or PCI, COPPA, GDPR, and state privacy laws such as California's CCPA. Enterprise buyers often ask for SOC 2 reports or security questionnaires before they sign, which can take months and real budget. Decide whether you will start in a lower-risk segment, use a compliant vendor stack, or delay regulated features until you have paying customers.

What is the difference between a vitamin and a painkiller?

A painkiller product solves an urgent, costly problem, such as missed revenue, compliance penalties, or hours of manual work each week, and buyers act quickly. A vitamin is a nice-to-have that needs more selling and a longer cycle. Test this by asking prospects what happens if they do nothing, who feels the pain, and what budget line would pay for the solution. If you cannot name a budget owner, or the problem is not on anyone's top-three list, validate a more urgent use case or target a different buyer before you build.

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