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Close five or learn nobody will pay: how to validate demand before building a product

Sunny Ray · · 5 min read

Offers Strategy

Building is cheap now. The only expensive thing left is not knowing if anyone will pay.

On July 31 I was on a call with a partner in a side venture that had stalled. They'd been refining the product, the positioning, the pages. Their advisor had told them something that summed up the mood: "it's kind of like we're starting to float here." Lots of motion, no ground under it.

My answer was the same one I give every founder who's floating. Stop building. Point the outreach machine at 100 people this week and ask them to buy.

100 people this week: two answers, both useful

When you put a real offer in front of 100 real buyers, one of two things happens.

Either nobody buys the entry offer. That feels like failure, and it's the most valuable information you can get, because you learned it in a week instead of after six months of building. Now you know the offer, the price or the audience is wrong, and you can change one and run it again.

Or five people buy, and two of them go up the ladder to the bigger offer. Now you have a business, revenue while you learn, and five people who'll tell you exactly what the product needs to be.

Both outcomes beat floating. The only bad outcome is the one most founders choose: not asking, so they never find out.

The $1 test before you incorporate

Earlier that month, on July 7, I'd given a version of the same advice to a different partnership that wanted to incorporate before they'd sold anything. My litmus test: find someone willing to pay even $1 before you incorporate. We held off on incorporation until the product crystallized.

The dollar isn't about the money. It's about the difference between "that sounds interesting" and a person reaching for their wallet. Everyone says your idea sounds interesting. Interest is free. Payment is a decision, and decisions are the only data that matter at this stage.

Lawyers, entities, logos and websites can all wait until someone has paid. If nobody will pay a dollar, none of them matter.

Use outbound to sniff demand before building

This isn't a theory we made up for clients. On our July 21 team call we talked about using our own outbound system exactly this way: to sniff out demand before building anything. Charles has done it personally for years. He tests an idea with outreach first and only builds what people already said yes to.

The reason it works now in a way it didn't a few years ago is the cost of each side. Building a product used to take months, so it made sense to think hard before you started. Today a working product can be built in days. Meanwhile, the cost of reaching 100 buyers with a real offer has collapsed too, if you have the infrastructure. The expensive, slow part of starting a business flipped. It's not the build anymore. It's finding out whether anyone cares.

I saved a post in June arguing that when anyone can build the product, distribution is the moat. I'd put it more bluntly for an early founder: when anyone can build the product, demand is the only thing worth testing.

What the machine looks like when it's working

To make "point outreach at 100 people" concrete, here's what our own July looked like on the day of that call. My calendar was booked three weeks out with more than 100 meetings. One campaign had produced nine interested leads before noon.

That's what demand testing at speed means. You don't wait a quarter for a signal. You launch on Monday and by Wednesday you know whether the angle has life. For a stalled venture, one week of that is worth more than another month of refining the pitch deck.

Make money while you learn

The rule I keep coming back to, the north star I gave partners that month: prove the business works while making money. Don't prove it with a prototype, a waitlist or a survey. Prove it with sales.

That means every test has a real offer with a real price. A waitlist tells you people are curious. A paid entry offer tells you they'll act. And the revenue from the first five buyers funds the next round of tests.

On a call earlier in July I told a prospect how we operate: "We believe in firing and then aiming." It sounds reckless. It's the opposite. Aiming without firing is how ventures float for months. Firing at 100 people tells you where to aim.

What floating looks like from the inside

If you're not sure whether you're floating, here are the signs I hear on calls. The pitch deck has been rewritten more times than it's been pitched. The website is on its third version and nobody's bought anything from the first two. Meetings are with advisors and friends, not buyers. Every week has progress and no week has a sale.

None of that is laziness. It's the opposite. Floating is what hard-working founders do when they're afraid of the answer. The fix is to make the answer arrive fast enough that it can't hurt for long.

How to run the test this week

  1. Write one entry offer with a real price. Small enough to say yes to, real enough to mean something.
  2. Pick 100 people who should want it. Not friends. Buyers.
  3. Reach them directly, with outreach that asks for a decision, not feedback.
  4. Count the yeses at the end of the week. Zero is an answer. Five is a business.
  5. Change one thing and run it again, or start building what the five asked for.

If you want the outreach side of that test running for you, with the mailboxes, lists and invitations already built, you can apply.

Frequently asked questions

How do I validate demand before building?

Put a real offer with a real price in front of about 100 buyers in one week. If nobody buys, change the offer, price or audience; if five buy, you have a business and five people to build for.

Can cold email validate a startup idea?

Yes, if the email asks for a decision rather than feedback. Charles has used outreach for years to test ideas before building, and we use our own outbound system the same way.

When should I incorporate a new venture?

After someone has paid you, even $1. Until then, interest is free and incorporation, branding and legal work can wait.

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