Market Validation: Insights from a YC Graduate

Image courtesy of Communitech

Image courtesy of Communitech

A startup veteran born and raised in Waterloo, Michael Litt had already tried his hand at day-trading, launched a smartphone teardown blog, started a biodiesel enterprise and started a media company.

Michael went on to co-found Vidyard, a platform designed to solve the problem of implementing video into your landing pages. Vidyard emerged from the Summer 2011 class of Y Combinator and is now serving hundreds of businesses worldwide.

Litt is also co-owner of what is arguably Canada’s most statistically successful home-based entrepreneurial incubator: Batavia House, where he helps startups and up-and-coming entrepreneurs in the Waterloo region.

Q: Your most recent startup, Vidyard, had gained early traction which allowed you to get into Y Combinator. Soon after VidYard raised $1.6 million in seed funding and was named one of the top startups to watch from the cohort. What your most memorable moment of this journey, from idea to fruition?

A: The most memorable moment was our launch: We should have launched 2 weeks prior to Demo Day but PG and I got some sort of food poisoning and were both confined to porcelain. This delayed our actual launch to 28 hours before demo-day – that meant we had an explosion in adoption preceding my presentation and that our user growth chart was actually a hockey stick. Along with this growth came the first cohort of customers that bought the product without interacting with me prior to close. I’ll never forget our first few customers – YOU KNOW WHO YOU ARE!!!!! <3

Q: While at Y Combinator what was the best piece of advice you received and from who?

paul graham email

Q: What is one challenge that you faced when Vidyard was getting it’s first hundred users? How did you overcome it?

A: I had set up a pretty serious funnel wrt to e-mail campaigns, a landing page and twitter communication that netted us 1800+ sign ups prior to launch. Our first 100 paying customers came pretty much exclusively out of that list. The challenge was setting up the process prior to opening the product up, it was that foundation that has allowed us to start building the rest of the house.

Q: You’ve also co-founded Batavia House, home-based incubator, and have had the ability to assist startups build great things. What do you think is the best way for early stage startups to validate their product?

A: I talk to a tonne of startups these days. Most of them consider their product validated by their friends, family or even local support community (YC, Communitech, Velocity, etc.). I’ve always thought that that kind of validation was bull-shit. Of course your friends and family will like your stuff – you’ve already paid them off with love and friendship.

Validation needs to come from a stranger. Someone out of your network in your target market that sees your stuff, buys it and says: “omfg Vidyard has made the moon brighter”.

Validation is money in the bank. By “money”, I mean dollars as well as time. Someone spending an hour/day with your stuff is validating your product just as much as if they were opening their wallet, especially in B2B SaaS.

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If you have any follow up questions or comments for Michael (available on Clarity), please leave a comment below.

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