{"id":19997,"date":"2015-03-05T05:00:02","date_gmt":"2015-03-05T12:00:02","guid":{"rendered":"https:\/\/tested-neuron.flywheelsites.com\/?p=19997"},"modified":"2015-04-12T13:27:27","modified_gmt":"2015-04-12T19:27:27","slug":"evaluating-your-startup","status":"publish","type":"post","link":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/","title":{"rendered":"Are You Sure You Have a Startup? Two Ways to Validate Your Business Model"},"content":{"rendered":"

As we are gearing up<\/strong> for the launch of our inaugural accelerator cohort here at Singularity University, I had the pleasure of reading through literally hundreds of pitch decks and business plans from the startups which applied for our program.<\/p>\n

For the startups we rejected, one of the things which stood out to me was the lack of a proper bottom up vs. top down validation in their business model.<\/p>\n

Let me explain:<\/p>\n

Take your assumptions and validate those against real business needs (turn conjectures into actuals).<\/i> Tweet This Quote<\/a><\/span><\/p><\/blockquote>\n

In a bottom up validation you take your assumptions and validate those against real business needs (turn conjectures into actuals<\/a>). Say for example your startup idea is to build a way for individuals to very easily set up a website to showcase their skills, achievements and interest. In the bottom up validation part of the process, you go and speak with as many potential customers as possible, take their feedback and iterate until you find a solution which your customers consistently love.<\/p>\n

In a top down validation you look at the overall market and see if your solutions has a viable market opportunity. You look at market data, trends and changes that might favor you and your solution (or not) and try to figure out if you have a solution that has a big enough market (for the price point your selling at\u2014if you\u2019re selling $10M software installations you obviously only need a few customers to make it work whereas if you\u2019re selling a $0.99 iPhone app you better have millions). You also try to figure out how hard it will be for you to get these customers\u2014one thing to have a big market in front of you, a completely different thing if it will cost you more than you can make per customer to acquire these customers. Lastly you look at the competition\u2014here it\u2019s important to not only look at people doing the same thing as you but everyone who competes for the same mind-share and share of wallet.<\/p>\n

Spend some time validating your business model. It\u2019s worth it and will make you a better entrepreneur.<\/i> Tweet This Quote<\/a><\/span><\/p><\/blockquote>\n

A good pitch deck and business plan makes me see that you did this work and that you have figured this out (again: conjectures trump assumptions). Sadly a bunch of entrepreneurs get so carried away in either the bottom up part (they believe so much that they have an amazing solution that they ignore the fact that their market might be minuscule) or the top down part (they see the huge market ahead of them but haven\u2019t figured out if their solution makes sense).<\/p>\n

Spend some time validating your business model. It\u2019s worth it and will make you a better entrepreneur.<\/p>\n

\n

This post originally appeared on Pascal\u2019s personal blog<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

As we are gearing up for the launch of our inaugural accelerator cohort here at Singularity University, I had the pleasure of reading through literally hundreds of pitch decks and…<\/p>\n","protected":false},"author":18,"featured_media":20086,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[476,403,1516],"tags":[2247,1870,210,690,383],"class_list":["post-19997","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-article","category-invest","category-starting-up","tag-article","tag-business-model","tag-investment","tag-finette","tag-starting"],"acf":[],"yoast_head":"\nAre You Sure You Have a Startup? Two Ways to Validate Your Business Model - UNREASONABLE<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Are You Sure You Have a Startup? Two Ways to Validate Your Business Model\" \/>\n<meta property=\"og:description\" content=\"Serial entrepreneur, venture capitalist, and director of Singularity University's accelerator program gives two clear ways for entrepreneurs to make sure their startup is providing a real business need in a viable marketplace.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/\" \/>\n<meta property=\"og:site_name\" content=\"Unreasonable\" \/>\n<meta property=\"article:published_time\" content=\"2015-03-05T12:00:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2015-04-12T19:27:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2015\/03\/PascalVlidate.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1400\" \/>\n\t<meta property=\"og:image:height\" content=\"500\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Pascal Finette\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@https:\/\/twitter.com\/pfinette\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Pascal Finette\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":[\"Article\",\"BlogPosting\"],\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/\"},\"author\":{\"name\":\"Pascal Finette\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/7366a9154d4679625f0369d071410492\"},\"headline\":\"Are You Sure You Have a Startup? Two Ways to Validate Your Business Model\",\"datePublished\":\"2015-03-05T12:00:02+00:00\",\"dateModified\":\"2015-04-12T19:27:27+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/\"},\"wordCount\":492,\"commentCount\":11,\"image\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2015\/03\/PascalVlidate.jpg\",\"keywords\":[\"Article\",\"business model\",\"Investment\",\"Pascal Finette\",\"Starting Up\"],\"articleSection\":[\"Article\",\"Investment\",\"Starting Up\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/\",\"url\":\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/\",\"name\":\"Are You Sure You Have a Startup? Two Ways to Validate Your Business Model - UNREASONABLE\",\"isPartOf\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2015\/03\/PascalVlidate.jpg\",\"datePublished\":\"2015-03-05T12:00:02+00:00\",\"dateModified\":\"2015-04-12T19:27:27+00:00\",\"author\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/7366a9154d4679625f0369d071410492\"},\"breadcrumb\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#primaryimage\",\"url\":\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2015\/03\/PascalVlidate.jpg\",\"contentUrl\":\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2015\/03\/PascalVlidate.jpg\",\"width\":1400,\"height\":500,\"caption\":\"Photo from Creative Commons\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/unreasonablegroup.com\/articles\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Are You Sure You Have a Startup? Two Ways to Validate Your Business Model\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#website\",\"url\":\"https:\/\/unreasonablegroup.com\/articles\/\",\"name\":\"Unreasonable\",\"description\":\"We believe in the power of business to drive lasting, scalable change.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/unreasonablegroup.com\/articles\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/7366a9154d4679625f0369d071410492\",\"name\":\"Pascal Finette\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/64707a7afafae97680afd451f49df2ca3c35f3bd9d75cc691ea621c978e6951e?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/64707a7afafae97680afd451f49df2ca3c35f3bd9d75cc691ea621c978e6951e?s=96&d=mm&r=g\",\"caption\":\"Pascal Finette\"},\"description\":\"Pascal is the Managing Director of Singularity University's Startup Lab. He is also an entrepreneur, coach, and speaker who has worked in Internet powerhouses, such as eBay, Mozilla, and Google, and Venture Capital\u2014starting both a VC firm and accelerator program.\",\"sameAs\":[\"http:\/\/finette.com\/\",\"http:\/\/www.linkedin.com\/in\/pfinette\",\"https:\/\/x.com\/https:\/\/twitter.com\/pfinette\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Are You Sure You Have a Startup? Two Ways to Validate Your Business Model - UNREASONABLE","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/","og_locale":"en_US","og_type":"article","og_title":"Are You Sure You Have a Startup? Two Ways to Validate Your Business Model","og_description":"Serial entrepreneur, venture capitalist, and director of Singularity University's accelerator program gives two clear ways for entrepreneurs to make sure their startup is providing a real business need in a viable marketplace.","og_url":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/","og_site_name":"Unreasonable","article_published_time":"2015-03-05T12:00:02+00:00","article_modified_time":"2015-04-12T19:27:27+00:00","og_image":[{"width":1400,"height":500,"url":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2015\/03\/PascalVlidate.jpg","type":"image\/jpeg"}],"author":"Pascal Finette","twitter_card":"summary_large_image","twitter_creator":"@https:\/\/twitter.com\/pfinette","twitter_misc":{"Written by":"Pascal Finette","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":["Article","BlogPosting"],"@id":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#article","isPartOf":{"@id":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/"},"author":{"name":"Pascal Finette","@id":"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/7366a9154d4679625f0369d071410492"},"headline":"Are You Sure You Have a Startup? Two Ways to Validate Your Business Model","datePublished":"2015-03-05T12:00:02+00:00","dateModified":"2015-04-12T19:27:27+00:00","mainEntityOfPage":{"@id":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/"},"wordCount":492,"commentCount":11,"image":{"@id":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#primaryimage"},"thumbnailUrl":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2015\/03\/PascalVlidate.jpg","keywords":["Article","business model","Investment","Pascal Finette","Starting Up"],"articleSection":["Article","Investment","Starting Up"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/","url":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/","name":"Are You Sure You Have a Startup? Two Ways to Validate Your Business Model - UNREASONABLE","isPartOf":{"@id":"https:\/\/unreasonablegroup.com\/articles\/#website"},"primaryImageOfPage":{"@id":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#primaryimage"},"image":{"@id":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#primaryimage"},"thumbnailUrl":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2015\/03\/PascalVlidate.jpg","datePublished":"2015-03-05T12:00:02+00:00","dateModified":"2015-04-12T19:27:27+00:00","author":{"@id":"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/7366a9154d4679625f0369d071410492"},"breadcrumb":{"@id":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#primaryimage","url":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2015\/03\/PascalVlidate.jpg","contentUrl":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2015\/03\/PascalVlidate.jpg","width":1400,"height":500,"caption":"Photo from Creative Commons"},{"@type":"BreadcrumbList","@id":"https:\/\/unreasonablegroup.com\/articles\/evaluating-your-startup\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/unreasonablegroup.com\/articles\/"},{"@type":"ListItem","position":2,"name":"Are You Sure You Have a Startup? Two Ways to Validate Your Business Model"}]},{"@type":"WebSite","@id":"https:\/\/unreasonablegroup.com\/articles\/#website","url":"https:\/\/unreasonablegroup.com\/articles\/","name":"Unreasonable","description":"We believe in the power of business to drive lasting, scalable change.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/unreasonablegroup.com\/articles\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/7366a9154d4679625f0369d071410492","name":"Pascal Finette","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/64707a7afafae97680afd451f49df2ca3c35f3bd9d75cc691ea621c978e6951e?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/64707a7afafae97680afd451f49df2ca3c35f3bd9d75cc691ea621c978e6951e?s=96&d=mm&r=g","caption":"Pascal Finette"},"description":"Pascal is the Managing Director of Singularity University's Startup Lab. He is also an entrepreneur, coach, and speaker who has worked in Internet powerhouses, such as eBay, Mozilla, and Google, and Venture Capital\u2014starting both a VC firm and accelerator program.","sameAs":["http:\/\/finette.com\/","http:\/\/www.linkedin.com\/in\/pfinette","https:\/\/x.com\/https:\/\/twitter.com\/pfinette"]}]}},"jetpack_featured_media_url":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2015\/03\/PascalVlidate.jpg","_links":{"self":[{"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/posts\/19997","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/comments?post=19997"}],"version-history":[{"count":7,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/posts\/19997\/revisions"}],"predecessor-version":[{"id":20085,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/posts\/19997\/revisions\/20085"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/media\/20086"}],"wp:attachment":[{"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/media?parent=19997"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/categories?post=19997"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/tags?post=19997"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}