A digital business can begin with a website, an app, an online

service, a digital product, a subscription, or a simple solution delivered through existing platforms. But before you invest time and money in building it, there is a more important question to answer:

Do the right customers have a problem they care enough about to take action to solve?

An idea can sound exciting without attracting buyers. People may praise a product they would never use, sign up without returning, or express interest without being willing to pay. A technically impressive app can still fail to become a viable business if it does not solve a sufficiently important problem for a reachable market.

You can reduce this uncertainty by testing your idea in small, deliberate steps.

This chapter explains how to define a customer problem, investigate existing alternatives, interview potential customers, test a simple offer, estimate whether delivery could be profitable, and decide whether to proceed, revise, or stop.

You do not need to build a complete app or purchase expensive software to begin.

1. Understand what business validation means

Business validation is the process of gathering evidence to assess whether a business idea has a credible path to attracting customers and delivering value sustainably.

It is not a guarantee of success. It is a way to replace unsupported assumptions with better information before making larger commitments.

There are four different questions to investigate.

Problem: Does a specific group of people actually experience the problem?

Demand: Do those people want your proposed solution enough to take meaningful action?

Delivery: Can you provide the solution reliably with the skills, resources, technology, and time available to you?

Economics: Can the price and delivery model plausibly cover the costs and leave enough money to sustain the business?

These questions are connected, but they are not interchangeable.

A customer may have a genuine problem but prefer an existing solution. Someone may like your product but consider it too expensive. A service may attract paying customers but require so much unpaid work that the business is not sustainable.

Testing each question separately makes it easier to identify what needs to change.

2. Write down the business idea as a testable proposition

Start with a one-paragraph description of what you intend to offer.

Use this structure:

Customer: Who specifically experiences the problem?
Problem: What are they trying to accomplish, and what gets in the way?
Current alternative: How do they handle the problem today?
Offer: What will you provide?
Expected benefit: What improvement should the customer receive?
Payment model: How might the business earn revenue?
Reach: How will you find and contact potential customers?

For example, imagine you are considering a digital service that helps small businesses maintain their websites.

Your initial proposition might be:

I want to offer small businesses a website maintenance service that helps them keep business information current, check important links, and identify visible website problems without having to manage every technical task themselves.

This is a starting hypothesis, not proof that a market exists.

You still need to discover whether the intended customers experience these problems, how they solve them now, whether your offer is sufficiently useful, and whether they would pay for it.

Separate facts from assumptions

Create a simple table.

Statement	Current status	How to investigate
Some businesses have outdated website information	Assumption until investigated	Inspect a relevant sample of websites and speak with owners
Owners find website maintenance difficult	Assumption	Ask about their actual experience
Owners would pay for monthly maintenance	Untested assumption	Present a specific offer and ask for a meaningful commitment
The service can be delivered profitably	Untested assumption	Estimate time, costs, and realistic pricing

This discipline prevents you from treating your own beliefs as market evidence.

3. Identify the customers who are most likely to need the solution

“Everyone who uses the Internet” is not a useful initial customer definition.

A small business, a university, a freelancer, and a large corporation may have different needs, purchasing processes, budgets, and expectations. Trying to serve all of them immediately makes research and product design unnecessarily difficult.

Define an initial customer group using observable characteristics.

For a website maintenance service, that group might be independent businesses that already have a website, depend on it to communicate with customers, and do not have a dedicated technical employee.

You can narrow it further by business type, location, website platform, or the particular maintenance problem.

Your first customer group does not have to remain your final market. Its purpose is to make the first round of research focused enough to produce useful evidence.

Investigate how customers solve the problem now

People rarely experience a problem without attempting some kind of response. They may use a competing product, hire a professional, create a manual workaround, ask a colleague, or simply tolerate the problem.

Find out what they currently do.

Look at:

Existing products and services.
Competitors' pricing and service descriptions.
Public customer reviews and recurring complaints.
Relevant professional communities and discussions.
The steps a customer must complete to obtain an existing solution.
Problems that existing options do not address well.

Do not assume that the absence of a competitor means an opportunity exists. It could mean the problem is uncommon, difficult to solve, expensive to serve, or not important enough for customers to pay for.

Official guidance on business-idea validation recommends investigating customers, competitors, market conditions, and willingness to pay before committing to a plan. See Testing and validating your business idea.

4. Interview potential customers before pitching your solution

Customer interviews help you understand people's experiences in their own words. They are especially useful before you spend time building a product.

Try to speak with people who resemble your intended customers. Do not rely exclusively on friends and relatives who may encourage you because they want to be supportive.

The goal is not to convince someone that your idea is good. It is to discover what is happening in their world.

Ask about actual behaviour

For the website maintenance example, useful questions include:

When did you last need to update or fix something on your website?
What needed to be changed?
How did you handle it?
What was difficult about the process?
Did you pay someone to help? If so, what determined your decision?
What happens when an update or problem is left unresolved?
How frequently does this situation occur?

These questions investigate real experiences.

Avoid leading questions such as, “Wouldn't it be great if someone handled all your website maintenance?” The wording encourages agreement and can make the results less useful.

Similarly, “Would you buy my app?” asks someone to predict a future decision about a product they may not understand yet.

Past behaviour, actual workarounds, money already spent, and concrete commitments generally provide more useful evidence than compliments or hypothetical intentions.

Record what you learn

With permission, take notes on each conversation. Do not collect unnecessary personal information.

Use a table like this:

Interview	Problem described	Current workaround	Cost or consequence	Evidence strength
1	Enter the actual observation	Record what they do now	Time, money, or risk if known	Weak, moderate, or strong
2	Enter the actual observation	Record what they do now	Time, money, or risk if known	Weak, moderate, or strong
3	Enter the actual observation	Record what they do now	Time, money, or risk if known	Weak, moderate, or strong

Do not invent responses to complete the table. Record uncertainty when a participant cannot provide an answer.

After several conversations, look for repeated problems, differences between customer groups, and evidence that contradicts your initial assumptions.

There is no universal interview count that validates every business. The appropriate sample depends on the market, the diversity of customers, the cost of a mistake, and how much uncertainty remains.

For a structured learning exercise, Microsoft's free Validate your startup idea with customers module covers customer interviews, assumptions, and experiments.

5. Test the offer without building the complete product

Once you understand the problem better, design the smallest experiment that can answer your next important question.

This does not necessarily mean building a minimum viable product. Sometimes a conversation, sample deliverable, manual service, prototype, or clearly described offer is sufficient for an initial test.

The key is to test a real assumption rather than build features merely because they are possible.

Option A: Offer a small manual service

If your proposed product is software that automates a task, you may initially perform the task manually for a small number of suitable customers.

For example, before building a website-monitoring application, you could offer a clearly scoped manual review that checks selected pages and reports broken links or outdated information.

This can reveal which problems customers care about and what they expect the service to include.

Be transparent that the service is manual. Do not imply that automated monitoring already exists if it does not.

Option B: Create a demonstration or prototype

A design prototype, sample report, demonstration website, or short product walkthrough can help people understand what you propose.

Observe how they respond. Can they explain what the offer does? Which parts matter to them? What is missing? What would prevent them from using it?

Positive feedback is useful, but it does not establish willingness to pay on its own.

Option C: Present a clear offer

Create a simple page or document describing:

Who the service is for.
The problem it addresses.
What is included and excluded.
The price or proposed price.
How delivery would work.
What the customer should do to express genuine interest.

You can use a website, a simple form, or direct conversations to present the offer. You do not need a complicated sales funnel for the first experiment.

If you collect sign-ups, explain what people are signing up for. Do not imply that a product is already available when it is not. If you take pre-orders or deposits, clearly disclose the product's status, expected delivery, refund terms, and any relevant obligations.

Option D: Ask for a real commitment

A customer taking a meaningful next step is generally stronger evidence than a compliment.

Depending on the offer, that step could be:

Booking a consultation.
Agreeing to a properly scoped pilot.
Providing access or information needed for a trial.
Signing an appropriate letter of intent.
Placing an order.
Paying for an initial service.

Do not interpret every sign-up, click, or expression of interest as proof of demand. Each signal has different strength, and the right test depends on what you need to learn.

6. Decide in advance what results would change your mind

A common mistake is to run an experiment and then interpret every result as encouragement.

Before you begin, write down what would count as a promising result, a disappointing result, or an inconclusive result.

For example, suppose you plan to offer a website maintenance service to a defined group of local businesses.

Your experiment might be:

Contact a small, relevant group of businesses.
Investigate their current maintenance arrangements.
Present a clear, limited service offer to those with a relevant problem.
Record how many agree to a substantive next step.
Estimate the time and costs required to fulfil the offer.

Before contacting them, decide what minimum evidence would justify a second experiment. You might require several businesses to describe the same recurring problem and at least one qualified customer to agree to a paid pilot at a price that could plausibly support delivery.

That is an example of a decision rule, not an industry benchmark or a guarantee of success. Choose a threshold that makes sense for your particular business and record why you chose it.

After the test, classify the result.

Continue testing if you have credible evidence of a real problem and meaningful customer action, but still need to investigate other risks.

Revise the offer if the problem exists but customers reject the proposed scope, price, delivery method, or target audience.

Stop or park the idea if the evidence repeatedly contradicts the core assumptions and there is no reasonable adjustment worth testing.

Gather more evidence if the sample is too small, the wrong people were contacted, or the experiment did not actually test the important assumption.

Stopping an idea that fails a fair test can be a good business decision. It preserves resources for a better opportunity.

7. Check whether the business can work financially

Customer demand is only one part of a viable business. You also need a plausible way to deliver the offer at a sustainable cost.

Start with a basic calculation.

Contribution per sale is the money remaining after the costs that vary with delivering that sale have been deducted from the revenue received.

For a simple service:

[ \text{Contribution per sale}

\text{Price received}

\text{Variable delivery costs} ]

Suppose a hypothetical website maintenance package sells for ₦50,000 per month.

Assume the estimated variable costs for one customer are:

₦5,000 for allocated tools or service usage.
₦10,000 for other direct delivery expenses.

The calculation would be:

[ ₦50{,}000-₦5{,}000-₦10{,}000=₦35{,}000 ]

The estimated contribution is ₦35,000 per customer for that month, before fixed overheads, taxes, owner compensation not already included, and other applicable expenses.

This is an illustrative calculation, not a recommended market price or a forecast of actual earnings.

If your own labour is substantial, include a realistic cost for that labour when assessing whether the service is sustainable. Otherwise, a service can appear profitable only because you are working without accounting for the value of your time.

Also investigate:

Payment-processing fees and failed payments.
Customer acquisition costs.
Hosting, software, equipment, and subscriptions.
Support, revisions, refunds, and rework.
Taxes and regulatory obligations relevant to your business.
The maximum number of customers you can serve reliably.
Seasonal demand and customers who stop buying.

A positive contribution does not guarantee profitability. Fixed costs, customer acquisition, capacity limits, and unpredictable expenses still matter.

For an early-stage business, use estimates where necessary but label them as estimates. Replace them with actual figures as you collect evidence.

8. Use a simple experiment log

You do not need specialised startup software to manage your first validation exercise. A spreadsheet or document is sufficient.

Create these columns:

Field	What to record
Assumption	The belief you are testing
Test	The activity you will perform
Audience	The people or organisations involved
Decision threshold	The result that would support or weaken the assumption
Actual result	What happened, without embellishment
Interpretation	What the evidence suggests and what remains uncertain
Next action	Continue, revise, stop, or investigate further

Keep the evidence attached or linked where appropriate. Record the date of the test and any important limitations.

This log becomes valuable when you conduct multiple experiments. It prevents you from forgetting why you made a decision or repeating an experiment that has already produced a clear result.

A useful next step is to test the riskiest assumption first. If the business depends on customers paying for a particular service, discovering that they will not pay is usually more consequential than learning which colour a button should use.

For additional background on testing assumptions systematically, see Strategyzer's guide to critical hypotheses.

9. Avoid the mistakes that make validation misleading

Building too much before learning. A complete application can consume months of effort before you discover whether customers need it. Test the most consequential assumptions first.

Asking only friends. Encouragement is not the same as demand from people who would actually buy the offer.

Confusing attention with purchasing intent. Views, likes, and sign-ups can be useful indicators, but they do not automatically translate into sales.

Changing the success criteria after the experiment. Decide what evidence matters before you see the results. Otherwise, it becomes easy to explain away disappointing findings.

Copying competitors without understanding their customers. An established business's strategy may depend on resources, brand recognition, contracts, or a customer base you do not have.

Ignoring the cost of delivery. A service that attracts customers but loses money on every sale may not be sustainable.

Misrepresenting a prototype. Explain clearly what is ready, what is manual, what is simulated, and what has not been built.

Treating a small sample as the whole market. Early experiments help reduce uncertainty. They rarely establish the full size of a market or prove that a business will scale.

Collecting more customer information than you need. Keep records proportionate to the experiment, protect personal data, and obtain permission before using identifiable statements or testimonials publicly.

10. Your practical assignment: test one business idea

Choose a digital business idea you may want to pursue. It could be a digital service, a website, a small software product, a digital publication, a paid template, a training offer, or another solution delivered through Internet technology.

Complete this exercise before making a large investment.

[ ] Describe one specific customer group.
[ ] Write the problem you believe they experience.
[ ] Identify the solution or workaround they use today.
[ ] List your three riskiest assumptions.
[ ] Speak with relevant potential customers and document their actual experiences.
[ ] Investigate existing alternatives and their pricing.
[ ] Create the smallest honest experiment that tests an important assumption.
[ ] Define your decision threshold before running the test.
[ ] Estimate the cost of delivering the offer.
[ ] Record the evidence and decide whether to continue, revise, stop, or investigate further.

Your deliverable is a short Business Idea Validation Report containing the proposition, customer evidence, experiment results, financial assumptions, unresolved risks, and your next decision.

You have not completed validation simply because you finished the checklist. The value comes from collecting relevant evidence and making a decision that reflects what you learned.

Final thoughts

Entrepreneurship is not only about having ideas or building products. It is also about making disciplined decisions under uncertainty.

Research helps you understand the market. Conversations reveal how people experience the problem. Small experiments show whether the proposed solution attracts meaningful action. Basic financial analysis helps you determine whether delivery could be sustainable.

None of these methods guarantees success, but they can help you discover weaknesses earlier, focus your resources, and improve your chances of building something customers genuinely value.

Test the problem. Test the offer. Test the economics. Then decide what deserves to be built.

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