Step 2: Validating Your Business Idea—Will People Pay for It?

You've identified some problems in step 1. Great! Now, let’s move on to step 2: figuring out if people will pay you to solve them.

Step 2: Will People Pay to Solve This Problem?

Will someone pay for that is a great test to think about early, because it helps put some reality around what your potential revenue and market size might be. Remember, it’s not just whether someone will pay, but how much they are willing to spend—this will influence your revenue potential.

As you explore whether people will pay, ask yourself these key questions:

Will someone pay to solve the problem?

• Do you see any examples of how this problem is being solved for your potential customers today? 
• How painful is the problem for your potential customers? 
• What are they losing by not solving this problem? Like what does it cost them to live with the problem?
• Your goal here is to estimate if there is propensity to pay

Do a Reality Check (Competitive Research)

• If people are already solving this problem, what are they paying, and to whom?
• Not sure? Pretend you have this problem and start googling. This is some light competitive analysis, where you see who’s out there and what others are charging. Don’t be afraid to actually reach out to potential competitors and get their pricing if it’s not already online.
• Your goal is to get a rough estimate of what people are willing to pay to solve this problem.

Crowded vs. Wide Open Markets

• you have probably done most of this in the first two steps above, but write it down. I make myself a slide deck or document with competitors, screenshots of their offering, pricing, all the things I might want for later.
• Your goal here is to estimate if this is a crowded market or wide open. 
• Lots of competitors? That’s market validation—others see this as a problem worth solving. No competitors? You may have found something unsolved… or it’s a bad market because no one is buying.

Let’s take an example: a time-management app.

Problem:

Everyone is busy, we all struggle with managing our time. People want to be more productive but lack tools to stay organized.

Step 2: Will Someone Pay to Solve This Problem?

1. Will someone pay to solve it?

Time management is a universal problem. Apps like Todoist, Trello, and Asana have proven that people are already paying for solutions.

2. How painful is this problem?

Personally and professionally, it’s expensive to miss deadlines and stressful to feel behind. This is a painful problem worth paying to fix.

3. How much are they willing to pay?

Quick research shows users pay anywhere from $5/month (Todoist) to $20/month (Trello). It’s easy to gather data by downloading competitor apps, testing features, and reviewing their pricing models.

4. Who might pay, and how big is the market?

The market is huge—students, professionals, freelancers, small business owners all want to manage their time better. And since it’s a digital product, scaling it globally is realistic.

5. How’s the competitive landscape - crowded or wide open?

Time management apps are popular, so there’s validation that people want this solved. But competition is strong, so you’ll need to figure out how to stand out. Does your fictional app offer a unique feature, or target a niche market? Whatever it is, it has to be different enough to break through.

Now that you have a framework to evaluate ideas, review your problem list. Cross off the ones that don’t meet the 'propensity to pay' test, and start focusing on those with real revenue potential. In step three, we do my favorite part: math! We’ll dive into creating a business model calculator.