This is a great question because it highlights the common desire for product development to be a pure science when - more often than not - it’s an art. For every best practice I can share around developing and validating a strategy, there’s a successful startup we can point to that’s the exception to the “rule.”

So my first bit of advice is this: your mileage may vary. There could be a hundred serendipities that unlock insights for you that no framework would ever catch. Lean into the idea that startups are chaotic, progress is often not linear, and the goal should be to increase your decision-making skills and confidence over time.

Okay, with that said, let’s look at some ways to make things less chaotic and ambiguous!

Pre-launch startups are the ultimate test of System 1 v. System 2 thinking (Kahneman). That is, it’s very easy to let your automatic thinking brain go into action and just keep moving forward without much thought. That’s the opposite of what you want to do. Instead, you need slow down your brain and engage in effortful decision-making so that you then have an easier time downstream debugging which parts of your strategy are working or not.

This is easy, but not simple. Let’s walk through it.

Use System 2 thinking to Articulate, Evaluate, and Validate your strategy

As an early stage startup, you’re trying to assess many different interconnected things at once:

• Value prop: What is the core problem you’re solving for, and how are you differentially solving it? Do you have a solution people actually want?
• Audience: Who really has this problem? Which audience are you starting with and why? How high value or urgent is this need / value prop for this segment?
• Business and growth model: Are people willing to pay for you to solve this problem for them? Is this a business that scales with customers, or can create a defensible moat? When do unit economics start to make sense? How will you acquire customers?
• Market readiness: Why now? What’s true about the world that makes this problem for this audience and this solution the right fit?

You can think of these as pieces to a puzzle that all need to fit together. If one piece doesn’t, the whole picture may not make sense together. And, like a puzzle, things may almost fit together, but not quite, and you need to go searching for the slightly-different piece that makes it come together.

This means you need to:

1. Actually articulate your strategy. Write it down as a list of hypotheses (framing them this well helps you remember that they still need to be proven). Clarify the different strategic components (value prop, audience, etc) so that you can see how they all connect with each other. Name alternative strategies and why you’re not pursuing them.
2. Evaluate which components of the strategy are riskiest. Puzzle pieces are interconnected, but some are more flexible than others. If Airbnb customers were unwilling to spend a night in a stranger’s home, or Lyft customers were unwilling to get in a stranger’s car, it wouldn’t matter how awesome the value prop or growth strategy was. Clubhouse had a killer acquisition strategy, but dropped the ball on finding the right fit for audience and value prop, causing a huge volume of their acquired users to churn. Some markets are too small, or you don’t have the right type of expertise to execute on a solution. Decide which components are going to be required to win so that you can assess them honestly.
3. Validate each component part, starting with the riskiest. Once you’ve named what your strategy is and articulated which ones are riskiest, you need to actually validate (and de-risk) the component parts. Udemy needed a critical volume of supply of course content to see if there was demand that would buy it, so they first created their own course rather than relying on organic supply, but then they needed to prove they could find potential instructors and convince them to create their own courses on the platform. This was fundamental to the mechanics of the marketplace dynamic they were hoping to build, so they had to prove it early. There are myriad different ways to validate each component of your strategy, from surveys to product launches to prototypes to prospective sales conversations to false door tests. The power of separating out your component parts and validating each separately is that you often don’t need to build an MVP. Instead, you can validate bit by bit with smaller tests.

Once you’ve done these three things, you have your work cut out for you to piece them all together and debug the debunked hypotheses. If a single piece doesn’t fit, don’t just pretend that it does. Get honest with yourself about what you learned and then find a better puzzle piece fit. If distribution really matters to your business success but you haven’t gotten that flywheel right…it’s not time to scale it! If the audience isn’t responding and retaining well…don’t just assume another audience will! Slow down, pause, and get honest with yourself about whether all the pieces fit together well before you go on to build a company on shaky strategic foundation.

Decrease latency between hypothesis, decision, and insight

Pre-launch means a lot of different things.

You don’t want to try to bake the absolutely most perfect product before ever putting it out in the world and getting real market data back about its value. (Spoiler: oh crap, you’ve built the wrong thing!)

But you also don’t want to throw pasta at the wall and put somethings out there that isn’t back up by tested hypotheses and real insights. (Spoiler: oh crap, you’ve built the wrong thing!)

Without knowing where your specific startup is on that continuum, I’d encourage you to focus on decreasing latency between hypothesis, decision, and insight. You need to be building value for customers before anything else, and you do that by generating insights about what people need, why they need it, and how you can give it to them. Ensure you have solid insights for each component of your strategy.

Let’s walk through a brief example from my time building a new business line at Quizlet.

In 2018, the UGC platform expanded to offer paid content to students. Our strategy was to partner with well-loved and recognizable brands to bring their content to Quizlet (which already had huge distribution among students, thus being an attractive lead gen source for publishers). We recognized that the biggest risk was getting students to pay something when they were used to paying nothing, and we needed to evaluate how much additional value we had to bring to the platform to enable a transaction.

• Value Prop Hypothesis: College students are willing to pay for hard-to-create study content with no new Quizlet features if created by a recognizable and reputable brand.
• Decision: Sell content from verified publishers to students studying college-level anatomy and physiology.
• Insight: Students perceived Quizlet as a free product, so even though they might buy similar content elsewhere, they were unwilling to spend even $10 without additional value prop.

We were able to get to this insight quickly by focusing on debunking that hypothesis as quickly as possible (rather than waiting a year to ship a fancy new product experience only to realize that the value prop was off). We then went on to use this insight to build more value prop into the marketplace product because content brand alone wasn’t enough value for our existing audience.

In early stages, you should be focused on speed to get to these meaningful insights as efficiently as possible.

Telltale signs you’re on the wrong path

Sometimes it’s helpful to pause and diagnose if you’re on the right path, so let’s look at some common failure modes to see if any of these apply to your situation.

• You haven’t articulated your strategy in a way that’s easy for anyone in the company to understand.
• You have a strategy, but it’s not actionable.
• You’re not clear on what decisions you need to make next because each path seems viable.
• Your decision-making process is opaque, so you’re struggling to reason where you went wrong or which part of the strategy doesn’t work.
• You’re running out of time or money, so you move forward with a mediocre product so you can start scaling it for your next raise.
• The feedback loop between decision and insight takes quarters or years.
• You spend most of your time defining MVP versus debunking components of your strategy
• You default to fully-built product experiences versus smaller strategic component tests.

If any of these apply to you, remember to pause so you can structure your thinking as much as possible:

• Articulate your strategy and its components.
• Evaluate your riskiest components (and write a decision journal about each of them)
• Validate each component separately, which includes debugging anything that you’ve debunked to assess why it didn’t pan out.
• Remember: a good strategy is like a puzzle: all the pieces need to fit together well, not just “good enough.”

Good luck, and have fun!

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