How Startups Validate Products According to Nicko Widjaja's Perspective

Product validation is an important first step for startups and should not be missed before moving on to the next stage. Journey to find product-market fit actually does not stop at a certain point, but continues and periodically in accordance with the development of market dynamics.

Every startup has their own story when it comes to validating their products. Thanks to meeting many startups, investors also have an interesting perspective to explore further on this matter. To discuss it further, in this session invite the CEO of BRI Ventures Nicko Widjaya as a super mentor for the DSLaunchpad 3.0 x AWS webinar.

Product validation is not a short process

Nicko explained that product validation means wanting to solve problems with solutions that are created and used by people who are not known and are willing to pay for it. To reach this point, it will take a long time because it needs continuous iteration to keep it in line with consumer needs.

The biggest mistake he often sees is startup ambitions that are too big, for example as a one-stop solution for one ecosystem. He suggested that it is better to start with the smallest things first, but start from real problems that have a big social impact.

One of the closest examples is how business ride hailing can grow from initially wanting to increase the productivity of ojek drivers, being able to accept many passengers, to now being able to become food couriers, package goods, and so on.

"Impact this is only felt when the product validation is running and this is not one step only but multiple steps. After use case the first is complete, the second idea validation appears. After successfully optimizing idletime driver, a payment issue arose which triggered product validation questions wallet, it turns out that many drivers do not have change. But at that time use case-there are still very few, this is what finally needs to be proven.”

The same thing happens for startups healthtech for its telemedicine products. Before the pandemic, the feature had use case which is very little because people are still unfamiliar with its function. But this was reversed during the pandemic and became the best validation for telemedicine. He also saw that the success of product validation also depends on factors timing, luck, and series of events.

“Finally, telemedicine is growing rapidly, not only there but also the supporting industries. There are also insurance, fintechand edutech which is currently growing rapidly. The effect of successful product validation will be enormous in the future.”

He continued, “Actually, what I see from product validation is the stage where all of our assumptions are tested and if we succeed in proving this is valid, what can be done after this. Because, it's rare for a startup to build something completely outside of what it was built from core product-his."

The biggest enemy assumption founder

According to Nicko, assumptions are a person's greatest enemy founders. Because, product validation is moments of truth which proves that the assumptions made by the founder in the deck and presented to investors are true or false. Setting assumptions that are too high is not good because it can have a bad impact, at worst the startup disbands. Therefore, when assumptions are wrong, the founder has to accept the reality and needs to move quickly to change his strategy.

“Obviously the metric is not looking at numbers, especially at an early stage. Because talking about the amount can only be done when it enters Series B because it talks about scalability. So the important thing is that the number doesn't need to be high, but conversion rateits high. Because if there isn't conversion, means the validation is wrong. conversion it's a ratio, not an amount, this is what people often forget," he said.

In measuring product validation, there are many metrics that can be used, but according to Nicko, don't let these metrics make you founder so fanatical. For example, the founder wants to use the MAU indicator, that's allowed as long as he also uses take rate, to see Bottom linewhat is it like. Or use a GTV indicator whose model is like website traffic, it's okay if visitors have a look first. But the important thing must be conversion rate. "The point is don't let the metric lie to yourself," concluded Nicko.