Exactly. But a time when you can take it at face value is when the question is something along of the lines of "will you sign a purchase order for this right now?" or the like.
And to tie back to what someone in another post here said about validation: one of the best way to validate that your solution is real, and will actually sell to the customer (which is the only thing that matters, from a certain point of view) is exactly to ask your customer "will you buy this, right now?" or a close variant. If the answer is "yes, send the bill and get the order underway" then you've validated something. If you get hemming and hawing and "well, maybe, let me talk to the purchasing committee" or whatever, you're still just thrashing around.
And even if you don't go for the actual sale yet (maybe the product isn't ready yet) you can take the approach Steve Blank[1] talks about, and work up to a questions of the form "would you pay a million dollars for this right now" and "well, how much would you pay for it then?" and "if I offered this to you FOR FREE right now, would you start rolling it out immediately" etc. Those answers will really tell you something about where you really stand in your customer's eyes vis-à-vis actually selling your thing.
[1]: https://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/09...
[1]: https://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/09...
https://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/09...
I found Steve Blank (https://steveblank.com) the easiest to relate to and his book https://www.amazon.com.au/Four-Steps-Epiphany-Steve-Blank/dp... is particularly relevant to high tech products and services.
Most likely case (if you have savings): you wind up back in the workplace having lead a more interesting life and having spent your savings.
Worst case: like someone I know you are not able to return the salaried position you once had.
Best case: you get on an accelerator programme, get some support/money and your product takes off.
You may like this book;
https://www.amazon.co.uk/Four-Steps-Epiphany-Successful-Stra...
Here some resources I found useful to do first B2B sales and get a general understanding of the process.
1. Peter Levine course of sales for tech entrepreneurs https://a16z.com/2018/09/02/sales-startups-technical-founder...
2. Steve Blank's 4 steps to the epiphany https://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/09...
3. Close.io SaaS Sales Book https://close.com/resources/saas-sales-book/
4. The Sales Acceleration Formula: Using Data, Technology, and Inbound Selling to go from $0 to $100 Million by Mark Roberge https://www.amazon.com/gp/product/1119047072
Also I advice you to fasten you educational feedback loop as mush as you can. The last boo can help you with metrics as well.
https://en.wikipedia.org/wiki/Crossing_the_Chasm
https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma
https://www.davidow.com/books/marketing-high-technology/
https://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/09...
Each of those books are projects (the order I put them in is more or less recommended) ... that's probably a couple months of careful study.
If you want to intersperse it with light reading, the following non-fiction novels are really good examples of the principles in practice (in not always obvious ways):
https://en.wikipedia.org/wiki/Masters_of_Doom
https://en.wikipedia.org/wiki/The_Soul_of_a_New_Machine
You can get used copies on ebay for about $3 each.
Thoughtfully engaging with the material is likely worth 1,000 times that.
Also the commonly cited Reid Hoffman, Seth Godin and Peter Thiel books I think are mostly a waste of time. Al Ries is ok (and quick) and Jim Collins is good if you're trying to turn around a 5,000 person company, but oh, if only I was so lucky.
Anyway, if you want to come back after reading those, I can give additional recommendations
But to start... I would say you should begin not by thinking in terms of identifying a problem, but by thinking in terms of identifying a candidate problem. That is, some hypothesis that you can then turn around and try to validate. (I won't get all Popperian here and point out that you can really only invalidate hypotheses, but instead will just lean on our intuitive notion of what it means to validate a hypotheses).
Once you have a candidate hypotheses (or two, or three, whatever) there is a somewhat straight-forward process for how to validate it and (potentially) turn it into a business. That process is laid out and explained in The Four Steps to the Epiphany and The Startup Owner's Manual.
Anyway, back to our "candidate hypotheses". The most obvious way to generate one is from personal experience. Eg, if you have worked as, say, a surgeon, you will probably already know a lot about what problems surgeons face.
OTOH, if you think you want to sell to a certain domain, but you don't have actual experience in that domain, you could make it a point to cultivate personal relationships with people who are in that domain, as well as doing a deep-drive into "the literature" of that domain, taking classes, watching videos, etc. But at the end of the day, if you're going to try to build a business selling something to, say, fire departments, you're probably better off having been a firefighter.
It might be a tough nut to crack, and the logistics might be tricky, but you may be able to find a way to embed yourself in the domain you're interested in. Volunteering, or just asking to "shadow" somebody for a period of time (this is where those pre-existing personal relationships come into play).
Another angle is "problems that are so general that they always exist." There's a famous phrase, the exact words of which I forget, which summarizes this nicely... it's something like "people will always want to pay less for things, have more free time, be healthier, have more sex, etc." So if you can come up with something that addresses any of these highly general topics, you might have a good candidate. Alan Kay, in one of his videos[3][4] talks about referencing Donald Brown's book Human Universals[5] as a source for thoughts on these "universal" themes. There's a LOT of good stuff in those two videos, so if you haven't seen them yet, I'd highly advice watching them.
Another thought is to find places where people like to complain, and listen to their complaints. Find any forums, sub-reddits, or sites named something like "XYZSucks" and pay attention to what people are complaining about. Maybe you can build the replacement for XYZ that doesn't suck, or at least a complement / accessory for XYZ that mitigates some specific instance of suckage.
I'm sure there are a hundred other ways to approach this, so be creative.
[1]: https://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/09...
[2]: https://www.amazon.com/Startup-Owners-Manual-Step-Step/dp/09...
[3]: https://www.youtube.com/watch?v=id1WShzzMCQ
Beyond that, it's hard to say without more information. Have you looked at Startup School and their library[1] of information? If not, I suggest doing that, as it's a veritable gold mine of good information.
If what you're working on is intended to be a scalable startup (as opposed to, say, a laundromat, or a one-man consulting company, etc.) then I highly recommend reading either The Four Steps to the Epiphany[2] and/or The Startup Owner's Manual[3]. The second is nominally the 2nd Edition of the former, but I find that there's enough difference in the content to justify reading both. If you're more enterprise focused, the former is more centered on that world. If you're doing something consumer focused, the latter title is more oriented towards that (but not to exclusion).
[1]: https://www.startupschool.org/library
[2]: https://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/09...
[3]: https://www.amazon.com/Startup-Owners-Manual-Step-Step/dp/09...
https://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/09...
That process is definitely different in an enterprise market. For whole-hog adoption, giant companies will want a mature solution. So instead you find ways to derisk it. Maybe it's a pilot program with a larger player. Maybe it's proving out the technology in an SMB context. Maybe you just find one mom-and-pop hotel who pays you not in money but in their time and data. Maybe you start with a single floor or even a single hotel room into which you preferentially book people who you think will be early adopters.
The M in MVP is for Minimum, and that applies not just to the product, but to the context of use. You start as small as possible, just enough to test your hypotheses. The smaller your tests, the faster you learn.
He makes another rookie mistake here: "I still need to buy the same number of tablets to rent to hotels, and can’t even really discount the product that much." Lean Startups are not cheap startups. It cost Toyota millions to build the first Prius, but they did not sell it for millions. That's fine, because the point of your early MVPs is not to cover the expenses. It's to learn things, including about what people will pay. In Lean thinking you price based on value, not cost, and then work hard to minimize costs while maintaining value.
[1] https://en.wikipedia.org/wiki/Crossing_the_Chasm
[2] https://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/09...
The last book I read was Abdel Haleem's translation of the Qur'an[2]. For an ancient religious text, it's rather short. Total reading time was maybe 16 hours over the course of a week. I'm not religious, but it was interesting to get a better idea of what Muslims believe and why. That said, the whole thing reads like a 7th-century version of Time Cube. I came away with the impression that the author was a schizophrenic who knew of parts of the Bible.
The most useful book I've recently read is Steve Blank's Four Steps to the Epiphany[3]. It's a more structured version of a lot of the stuff I learned in YC.
My favorite books of the past year are Confessions of a Yakuza[4] and Infidel[5]. The subjects of each book are as different as can be, but their stories are quite captivating. Both survived immense suffering and managed to thrive afterwards. Reading those books reminded me of how lucky I am and how insignificant my problems are.
1. http://www.amazon.com/When-Air-Hits-Your-Brain-ebook/dp/B006...
2. http://www.amazon.com/Quran-Oxford-Worlds-Classics-ebook/dp/...
3. http://www.amazon.com/Four-Steps-Epiphany-Steve-Blank-ebook/...
4. http://www.amazon.com/Confessions-Yakuza-Junichi-Saga-ebook/...
5. http://www.amazon.com/Infidel-Ayaan-Hirsi-Ali-ebook/dp/B000N...
http://www.amazon.com/Four-Steps-Epiphany-Steve-Blank-ebook/...
I'd suggest you consider reading The Art of the Start[1] by Guy Kawasaki, The Four Steps To The Epiphany[2] by Steve Blank, and High Tech Startup[3] by John Nesheim. Between those, they cover a big chunk of the basic stuff you need to know.
The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup[4] also has a good reputation, but I haven't had time to read it yet, so I can't give a personal endorsement. But it sounds like it might be worthwhile.
FWIW, though, I can tell you what we did at Fogbeam[5]: The company is organized as a legal entity, but we are an LLC right now, not a Corporation. I would not necessarily recommend doing that to anybody else though... while it is possible to build a big company as an LLC, practically speaking, if the intent is to build a scalable startup, the kind that's going to seek VC money and that you ultimately hope to IPO, you need to be a corporation. VC's essentially will never invest in an LLC (there are technical reasons why) and LLC's have serious limits if you need more than a hundred or so "shareholders" (I forget the exact number, but it's a pretty small number). The reason we are an LLC is a historical coincidence, rooted in weird shit that happened back when I was planning to start a consulting company, before deciding to do a product. Fortunately the prevailing wisdom is that it's fairly straightforward to convert from an LLC to a C Corporation. When they day comes that we need to do it, we'll switch.
As far as equity distribution, we have been operating on a handshake agreement between the founders. Technically speaking, I own 100% of the company "on paper" since I'm the only Member listed in the LLC operating papers. But that is, again, only a historical legacy. I created the company and worked alone for the first year before inviting the first co-founder onboard. It would be easy enough to amend the papers to update the equity split, but we've basically taken the approach that "well do that when we convert to a C corp, or there's a specific need to" (like, if we get an acquisition offer). So, yeah, we are operating on trust at the moment. A lot of people will recommend against doing that sort of thing for various reasons (see: The Social Network for example), and I have known friends who got screwed by co-founder disputes because things weren't put into writing up-front. If I had to advise somebody, I'd probably advise you to decide on the equity splits, intellectual property assignments, etc. up-front, and formalize everything from the beginning just to be on the safe side. The downside to that is, it costs a little bit of money and time. shrug
As for YC... nothing against them, but I'd never make a decision based on "what YC wants". But I look at all accelerators / incubators / etc. as "something that might be nice to do, but we'll succeed with or without them." Being that we are an East Coast startup with constraints that would limit out ability to move to CA in order to do YC, we've never even applied and probably never will. If doing YC is super important to you, then maybe you should treat this a bit differently. It's up to you.
Design document? Meh... I mean, yeah, but no. Not exactly. You need to know something about what you're building, but as a rule, you probably won't know exactly what you really need to build to achieve "product / market fit"[6] right away. So no sense spending months on an elaborate BDUF design doc. Sketch out the high level design, and IF you wind up subcontracting any work, then you'll have to formalize a spec for the contractor. But don't spend months and months designing something nobody wants. "Get out of the building" as they say, talk to customers, and iterate the design as you learn what people want/need.
[1]: http://www.amazon.com/Art-Start-Time-Tested-Battle-Hardened-...
[2]: http://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/098...
[3]: http://www.amazon.com/High-Tech-Start-Revised-Updated/dp/068...
[4]: http://www.amazon.com/The-Founders-Dilemmas-Anticipating-Ent...
[6]: http://www.stanford.edu/class/ee204/ProductMarketFit.html
I am kind of surprised to see Steve Blank's "The Four Steps to the Epiphany" (http://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/098...) omitted. Is that one that everyone mentions, but nobody reads?
