When did you know that your startup idea was viable?



10 paying customers


I've brought a handful of different products to the market and I think there were different moments along the way where I thought the idea was viable, but the 3 things that have stood out as the most important:

  • The first time I pitched the idea and it resonated with a person who would be a core buyer (when you see the "light bulb" go off)

  • 10 paying customers

  • 1M dollars

Those I think are the big 3, but if I had to choose 1 I would say it is the 10 paying customers, at that point I know I have something that can scale.


- Adam Weber, Co-Founder and CPO, Emplify




Bootstrapped for 3.5 years


I never was trying to create a startup, I was trying to create a professional services lifestyle business for myself. Our product (dbt) was a tool that I wanted to use in order to deliver services, and I honestly never believed at the outset that there would be many other folks in the world who wanted to use it. But it turns out that there are. So it took a full 3.5 years from launching dbt and watching its growth before I felt confident that we had a real shot at being a "big" company. This is one of the main reasons we waited for so long to raise capital--we bootstrapped the entire way until we felt like we had that confidence.


It's an unusual approach and I'm not sure it would work for every situation and every founder, but our path has had a ton of really unique benefits for us and I wouldn't trade it for anything.


- Tristan Handy, Founder and CEO, Fishtown Analytics




Breaking even from a Thanksgiving promotion


Honestly, I knew it was "viable" ever since I started the company - otherwise I certainly wouldn't have started it :)


When I knew we'd hit the inflection point of growth though is when we ran a promotion one time, I think it was a Thanksgiving day promotion - and we sold enough in those couple days that paid for the monthly expenses at the time. That single even made us breakeven and I knew we had something that people would pay for, and that could grow quickly.


- Zeb Evans, Founderf & CEO, ClickUp




Scalable + Repeatable + Margins


When we had a scalable and repeatable sales motion with acceptable margins and a large enough addressable market. I realize that’s kind of an obvious answer but I’m not sure how else to answer - this isn’t the part that’s rocket science :)


- Geoff Schmidt, CEO and Co-Founder, Apollo GraphQL



First renewal and large contract upsell


There wasn't an aha moment when everything clicked, rather it was a gradual realization that things were working when looking backwards. There were early indicators around 12 to 18 months into Tonic when we started signing up customers who were paying real amounts. They were putting up with our buggy early versions and eagerly asking for when certain new features would be available. Over the next 6 months we had our first renewal and a large contract upsell, that's when things realized things had been viable for a while.


- Karl Hanson, Co-Founder COO, Tonic





Open-source project with organic adoption


It wasn't a hard question for me. It was because my startup was built around an open-source project. The project was adopted organically by multiple enterprises, and developers (who are our main users) gave us pretty positive feedback. So it was clear that idea was viable long before we started thinking about founding a company.


- Maxim Fateev, Founder, Temporal Technologies




Positive feedback on prototype


When we started Animoto in 2006 our first priority was to create a video creation product that we wanted to use ourselves. Before Animoto, it was too difficult and time-consuming to create great-looking video. Cloud-based video rendering had never been done before so we gave ourselves three months to create a prototype that would both prove out the technical concept and allow us to get user feedback. While entrepreneurs always have to be optimistic, it was only once we proved out the technical concept and got positive user experience feedback from family and friends that we knew our idea and product was viable.


- Brad Jefferson, CEO & Co-Founder, Animoto




First enterprise customer on annual contract


In my startup Qwiklabs when we had a first enterprise customer sign an annual contract I knew my product/startup idea was viable. At this point we had a minimalist product addressing the critical user journey. It was unclear at that point if there was a product/market fit (that is: if we had a great product for a large market). But it was clear that our idea and MVP were unique and useful enough for a large enterprise to pay for it. We established product/market fit a year from then when over a dozen enterprise customers were paying for the full-fledged version of the product. In my view founders have an inkling/gut feeling about an idea; founders should bring that idea to a minimalist life and very quickly start validating it.


- Jitesh Shetty, Co-Founder, Infinichains



The first dollar


I have a very simple answer... it was when the first dollar came through the door. At that moment I remember thinking that if one customer was willing to trust us and pay us, there are likely many more out there and we have a viable idea. To me it was completely eye-opening and even unexpected that someone was willing to pay for a product we had just built and was still incredibly raw. I knew that if we kept building, kept learning and improving we would reach many more people. Honestly that first payment we received was a really emotional moment and the energy it created to forge ahead was enormous.


- Michael Balyasny, CEO, Attendify




You never know until it is (but there are milestones)


the honest answer is you never know until it is, and even then you question it, or at least i do. however, i think some milestones might include:


1. when we got our first ever contract

1.5 when we raised our first seed round

2. when companies that previously had said "oh, what a cute idea (im paraphrasing)"

actually starting using the technology

3. when we got our first enterprise contract


i realize these all have to do with money, which is not really why i became an entrepreneur - however, viability as a for-profit enterprise involves selling your product so... that's my answer.


- Frida Polli, CEO and Co-Founder, pymetrics




Customer requests and usage despite drawbacks


I don’t think there’s any particular framework. You feel the pull of p/m fit when customers come to you to ask for more things in your product or willing to use yours despite all the drawbacks.

- Vivek Ravisankar, Co-Founder & CEO, HackerRank




When others can sell consistently without founder involvement


I knew it was viable when other sellers were able to consistently sell licenses of Suzy without me being involved in any way :)


- Matt Britton, CEO, SUZY




Personally knew the problem to be solved


I personally knew the core problem we were trying to solve with Fictiv b/c of my background and time at Ford. From there, you have to listen to your early customers and challenge all of the hypotheses you have while staying true to the vision or disruption you know the market needs. For us, that's building a virtual CM that doesn't own a single machine or factory. It's been an amazing 8yr and we're only getting started!


- Dave Evans, CEO and Co-Founder, Fictiv




First customer renewal


I would say I knew the idea was viable when we renewed our first customer for an additional 1 year term. You can't really know if your product is adding value until a customer pays and renews.


- Michael Smalls, CEO, Hoopla




Profitability


I knew my business had a chance to be viable from day one, but I really knew it was viable when the P&L statement showed that we'd be profitable with our available cash.


- Ken Accardi, CEO, Ankota




Growth is easy


PostHog pivoted a lot. We changed what we were doing a total of 5 times in the first year - working on products ranging from a 1:1 tool for sales leaders, to a tool to monitor technical debt. The biggest thing that we knew we'd finally got it right was how it felt to grow. We published our open source product analytics platform on a big developer forum and it has grown organically ever since, at an increasing rate as we've focussed on the product. Every other idea we had, I was pushing very hard just to get one user at a time to try it out, whereas after just the first month of building PostHog, it just suddenly felt like running downhill. If you're not finding it easy to grow, then you probably aren't quite there yet. The end result was after we got the idea right, we were able to build a community of thousands of developers and to raise $12M within less than a year.


- James Hawkins, Co-Founder & CEO, PostHog




Gradually


As with the business of growing old, there is not one moment but a gradual, inevitable realization. Incrementally surreptitious.


- Avinash Misra, CEO and Co-Founder, Skan.ai




Reactions from potential users


quick answer is by talking to a lot of potential customers and seeing their reactions to my proposed startup idea.

- Sanish Mondkar, Founder and CEO, Legion Technologies




The early technology and team


I knew it was viable once I felt I had assembled a core of very good technical people and once I saw that the early technology could do things I thought were very valuable and could not be done with existing tech. This, of course, was a big gamble because we did not have concrete client interest in our tech—so it was mainly based on what I thought could happen given what I saw at the time and the caliber of the people working with us.


- Anonymous




Not all great ideas, or businesses, are the same


I think it's easy for most mythology around startups to be about "product market fit" which is true to a certain degree - this idea that you know viability when you hit clear mark of demand for some feature/service offering you have that clearly satisfies a sizable audience.


The trouble with this is that it misrepresents what a "great business' can be. By that I mean the tech industry in particular over romanticizes the idea of venture backed, hyperbolic growth unicorns. In reality few businesses achieve this.


However, many of the businesses that I admire most employ ~30 people, have been running for 50+ years and you'll never hear of them - yet they provide steady income for a great group of people, dividend/return to their shareholders and a healthy tax to the exchequer.


The reason I say this is that a mentor of mine who's now in his late 70's reminded me many years ago that great ideas aren't always rocket-like growth, some are slow burn before they grow and others are permanently modest but perfectly healthy businesses.


This may all sound like I'm hiding from a real answer - I'm trying to do the opposite - point out that great businesses, or "viable startup ideas" as you put it can mean an idea that can sustain $3M in revenue for the next 50 years. If you never raise venture capital and have no external shareholders, that's an incredible income. Conversely if you raise venture and go down that road, you need to strike ideas that have the possibility to scale rapidly.


So if I were trying to give good advice, I'd start first by telling you to ask yourself, what kind of business are you trying to build?

  1. One that you control the destiny of and can pay you handsomely?

  2. A "big" business in the traditional silicon valley sense, where you own a slice but you're beholden to investors?

If it's the former, then the idea doesn't need to be revolutionary. It can be very marginally better than an existing service - like laundromats that use less water - they're not setting the world alight, but we all should care enough to use that service so it's a solid business.


If you're looking to build the next venture scale business then your ideas need to have clear traction and velocity. That is to say, a visible demand for the problem and a proof that more than a statistical aberration will pay for it (e.g. more than 100+ individual or more than 20+ companies); then you know you have something.


- Anonymous, Series A startup




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