How I validated a fintech startup in 1 week
In my last startup I worked without validation for 18 months straight.
I had zero revenue. It was a mistake of gigantic proportions.
So I took things differently with my new project, Autofatura. I went from start to finish in one week. Here's how.
🔍 Began by picking a suuuuper niche problem
Bureaucracy: the #1 favorite hobby of entrepreneurs and makers.
Since it's such a funny endeavor, Portugal decided to gift SaaS and e-commerce businesses. My product wanted to make that gift a bit easier to handle 🇵🇹
You see, whenever you receive a Stripe payment you need to issue a new invoice with certified software. Stripe's invoices have no legal value. You also need to send this invoice to your client.
This takes five, maybe ten minutes.
Now multiply this by 10, or 100, or 1000 🤯
It's an incredibly stupid bureaucratic process. And I would automate all of it, saving businesses hundreds or thousands of euros in automated processes.
🧪 Validating with a landing page and interviews
Everybody says you need to validate by putting a [BUY] button.
And I agree. With an asterisk ✳️
I built a landing page on Unicorn Platform clearly demonstrating the process. You can see it. It's here. Translate with Google if needed. If you submitted your email you would go to a thank you page.
Once that basic page was ready, I did one thing: talk with potential users. SaaS owners and e-commerce owners.
And from their feedback I understood it was not going to work 🚫
Even though I didn't put a price on it, it was easy to feel it wasn't going to work. The facts were out.
Look: if it was my first startup I wouldn't have done it. I would be stubborn and assume eventually it would work. I know this because it was exactly what happened.
But as they say: fool me once, shame on you; fool me twice, shame on me 💭
Check the facts:
- The problem was too niche. Portugal has 10 million inhabitants, about the same as North Carolina, USA. Only a tiny percentage of businesses use subscriptions or recurring payments. The market is just too small.
- Accounting software pricing is restrictive. They charge 10€ to 20€ a month, so my pricing would have to fall in that bracket.
- Accounting apps already had ecommerce integrations. Woocommerce, PrestaShop, etc - this took out half of the market.
- And big SaaS companies eventually integrated Stripe with accounting to speed their operations up.
- Another nail in the coffin: Zapier. There was already an integration for InvoiceExpress, one of the most popular accounting choices. Why pay me when you can use Zapier?
- Scalable acquisition. Since this was a very very very niche market, acquisition was difficult. There was no easy way to reach my target audience.
In short: it was not worth it to build a product with such a small probability of reaching meaningful revenue.
🎯 Take your shot. Then try again
That's the maker life: you build, you test, you fail, and repeat. Don't linger on a product that won't go anywhere.
I got this tweet stuck in my head ever since I've read it. Levelsio wrote it.
If only 5% of ideas are successful, then you need to ship fast.
So don't linger. Check the facts. If chances are small, don't do it. Invest very little, get feedback quickly, and keep moving.
I'm already building my next idea with dozens more in the backlog.
Let's keep shipping. And I hope this post helps you out.
By the way, if you want to follow my journey, I build in public on Twitter.