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  7.15. Step 3: Checking the Crucial Test of the Hypothesis (6 min.)

Lastly, always remember that your objective is to find out the facts with legitimate tests of your hypotheses. At the end of the day, no matter how much positive feedback you receive, if customers won’t buy your product, then you have nothing but an expensive hobby. Entrepreneurs often delay these real tests by avoiding asking about price, or giving away the product for free. This is a huge mistake! The price your customers are willing to pay is the measure of the degree to which you have nailed the solution. If your product must truly be given away for free because there is great value in driving the scale and going viral (think Facebook, Twitter, and Instagram), then you need to develop an alternative measure for nailing the solution, such as engagement or the degree to which customers share your product.

paying customer.pngBy the end of the Prototype Test, customers should be prepared to pay for your product. By the end of the Solution Test, your customers should be willing to pay for the product, or something is dreadfully wrong. Either the pain is too small or the solution isn’t correct. To that end, you need to be sure to address two key questions in this stage and the next stage: price points and breakthrough questions.

Price points - Although you aren’t trying to sell explicitly (because you are focused on learning), you should take the opportunity to begin to learn about price points while you prepare your initial customers. Without selling anything, you can ask questions that will identify price points, such as “How much would you expect to pay for a solution like this?” or “If someone came up with this solution, how much do you think your firm would pay for it?” Whatever you do, be sure to find out whether your customers will pay and how much - it is a crucial indicator of the pain point and the solution you've created. One startup went through the entire Nail It Then Scale It process, but were too nervous to ask about price points. Although they had validation of the solution, they didn’t have the most critical piece of validation that customers would pay for the solution.

Breakthrough Questions - These are the tough questions that determine whether you have a solution that will lead to a high-value venture or just smoke and mirrors. They are inquiries such as “Would you be willing to pre-pay for this product?” or “If I gave this to you for free, would you install it today system-wide,” or “Would you be willing to purchase this today?” Breakthrough questions are the measure of whether you have nailed the solution, and the most reliable answer is cash from customers. Depending on the context, your breakthrough question will differ, but finding out the answer can be absolutely critical. If customers say no to these and other similar questions, you know that you have not yet nailed the solution to a sufficient degree.

If you haven't already done so, we encourage you to download the following interview guide, which will help you with customer conversations as you go through the Nail It Then Scale It process.

(See Nail It Then Scale It, pgs. 127-130)