Validate monetization strategy early

A common failure mode for new businesses is the lack of a clear and validated monetization strategy. It's not enough to have a good idea or a product that users like; there must be a clear path to revenue.

Delaying monetization decisions can lead to several problems:

• Building a product that no one will pay for: Users might be happy to use a free product, but that doesn't mean they will be willing to pay for it.
• Attracting the wrong users: A free product might attract users who are not the target audience for a paid product.
• Running out of cash: A business without revenue cannot sustain itself indefinitely.

It's crucial to validate the monetization strategy as early as possible, even before building the product. This can be done through:

• Customer interviews: Ask potential customers if they would be willing to pay for the proposed solution.
• Landing page tests: Create a landing page with pricing information and see how many people sign up.
• Pre-orders: Ask customers to pay for the product before it's built.

By validating the monetization strategy early, you can de-risk the business and ensure you're building something that people will actually pay for. This is a core component of applying good Idea Selection Criteria.