The Bootstrapped Founder 283: Business Validation Traps
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Jan 5, 2024 In this podcast, the host explores business validation traps, such as confusing users with customers and listening to the wrong segments of the user base. It discusses the importance of actively searching for reasons why an idea might be wrong and prioritizing paying customers. The speaker also shares their decision to focus on infrastructure maintenance, rethinking the free tier, and the possibility of selling their business. The advantages of using acquire.com for selling a business are highlighted.
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Limits of Business Validation
- Validation in entrepreneurship is never absolute; it is about not being invalidated yet.
- We tend to seek confirmation rather than disconfirmation, which biases our perception of business signals.
Seek Disconfirmation Actively
- Actively search for reasons why your business idea could fail.
- Only pursue it further if you cannot find convincing reasons to invalidate it after real attempts.
Convert Free Users to Customers
- Having many free users does not validate a business model or ensure success.
- Focus on converting free users to paying customers to validate profitability.