Discover five practical ways to validate demand, test willingness to pay and avoid costly mistakes before committing your time, money and resources.

Almost every entrepreneur I meet believes they have discovered something the market needs. They can explain the product, describe the features and quote the size of the industry. Their conviction is impressive. But I often ask a question that changes the conversation: Who has actually agreed to pay for it?

That is not the same as asking who likes the idea. Friends will encourage you. Survey respondents may say they are interested. A prospective customer can spend an hour praising your concept and still never buy.

A viable business begins with a problem important enough for someone to spend money, time or political capital solving. Here is how I would test that before committing a large budget.

Start with a narrow statement: This specific buyer experiences this particular problem, in these circumstances, with a consequence they already recognize.

“Small businesses need better technology” is too broad. “Multi-location service businesses lose appointment inquiries after hours because no one owns follow-up” is a proposition you can investigate.

In healthcare and complex B2B markets, make a further distinction between user, influencer and economic buyer. A physician may love a technology while procurement, finance or an executive committee determines whether it can be purchased. Enthusiasm from one stakeholder does not establish commercial demand.

Write down the problem, the current workaround, the cost of doing nothing and the person authorized to approve a solution.

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