Is my startup viable? How to test your business
Starting a business is exciting—until the doubt creeps in. Am I building something people actually want? Can I make this work?
These questions keep founders up at night, and for a good reason. But here’s the good news: you don’t have to guess. Testing your startup’s viability is a process, not a mystery.
This guide will help you figure out whether your startup is ready to grow, needs a course correction, or should stop altogether.
Questions to test if your startup is viable
1. Does your startup solve a real problem?
A startup’s first job is to solve a problem. If your business doesn’t tackle something real, it won’t matter how polished your product is—people won’t care.
Start by asking yourself: What specific problem are you solving?
Don’t stop at something vague like, “we help people save time.” It helps to be more precise, for example: “we cut the 10 hours a week restaurant managers spend juggling staff schedules.” That’s a clear, real-world problem.
Next, figure out who feels this problem the most. Your target audience shouldn’t be everyone. The best startups focus on a specific group.
If you’re building software to help freelancers track invoices, your core audience might be new graphic designer freelancers juggling multiple clients, not all freelancers everywhere.
Finally, look at how people are solving this problem today. Are they using clunky spreadsheets? An expensive competitor? Or are they ignoring the problem because it’s too much hassle to solve?
If the solutions out there are already good enough, your product will need to offer something significantly better, or significantly more targeted to the exact problem.
2. Does your product uniquely fit the market?
Even if you solve a real problem, your solution has to fit the people you’re trying to help. This is called product-market fit. Without it, you’re building something nobody will buy.
To find out if your product fits the market, talk to the people you want to serve.
Ask simple questions like:
- “How do you currently handle this problem?”
- “What frustrates you about the existing solutions?”
- “What would make you switch to something new?”
Pay close attention to their answers. If their frustrations line up with what your product solves, you’re onto something. But if they don’t seem to care, it might mean you’re solving the wrong problem—or targeting the wrong audience.
A strong product-market fit also means your product stands out. If it’s just a little bit better than what’s already out there, you’ll struggle to get noticed. Your product needs to feel like a clear win for your customers.
Even if you solve a real problem and have a great product, your market needs to be large enough to sustain your business.
Start by estimating how many people or businesses face this problem.
For example, if you’re targeting yoga instructors with scheduling software, find out how many yoga instructors are in your region. Multiply that number by your price point. Is the total revenue potential enough to hit your goals?
You should also consider how much your audience is willing to pay. If your solution saves customers a lot of time or money, they’ll likely pay more. But for smaller, less critical problems, even a low price might feel too high.
Finally, examine your competition. A crowded market isn’t necessarily bad—it proves there’s demand. But you’ll need a clear way to stand out.
3. Can your team deliver?
Startups aren’t just about ideas; the success lies in the execution. Even the best idea will fail if the team behind it can’t deliver.
Take a close look at your team. Do you have the skills to solve this problem? If you’re building AI software but don’t have a machine learning expert, that’s a problem.
Skills gaps are fixable, but you need to recognise and address them early.
Execution is another key factor. Startups need to move fast. If it takes your team months to make small changes, you’ll get left behind. A tight focus is crucial – avoid getting distracted by shiny new features or opportunities that pull you away from your core goal.
Finally, startups are hard work. Long hours and high stakes can take a toll. Make sure your team is motivated and working well together. Burnout isn’t just bad for morale; it’s bad for business.
Many founders have abandoned their startups because of emotional (not business) reasons – you are not immune.
4. Do you have a strong business model?
A great idea isn’t enough. To succeed, your startup needs a solid business model that can generate revenue and scale.
Start by understanding your costs and revenues. How much does it cost to acquire a customer? This is your Customer Acquisition Cost (CAC). How much money does each customer bring in over time? That’s your Lifetime Value (LTV).
If it costs $200 to get a customer who only pays $100, you’re losing money. You’ll need to either lower your CAC (for example, by improving your marketing) or increase your LTV (by offering upgrades or improving retention).
Pricing is another critical piece. Your price needs to match the value you’re delivering.
If you’re saving customers $10,000 a year, charging $1,000 might feel like a bargain. But if your product offers only a minor improvement, even $10 might feel like too much.
5. Can you sustain and scale operations?
Many startups fail because they run out of money or can’t keep up with growth. That’s why operational sustainability is so important.
First, look at your finances. How much cash do you have, and how long will it last? Knowing your burn rate—the rate at which you’re spending money—will help you figure out your runway.
Next, think about scaling. A process that works for 10 customers might fall apart with 1,000. For example, if you’re manually onboarding new users, that won’t work as your customer base grows. Look for ways to streamline and automate your operations early on.
Finally, plan for risks. Competitors might copy your idea. Markets might shift. Regulations might change. The more prepared you are to handle these challenges, the stronger your startup will be.
What to do next
Once you’ve answered these questions, it’s time to decide on your next move. There are three main courses of action you can take:
Double Down: If customers are excited about your product, your market is big enough, and your business model works, it’s time to double down. Focus on what’s working and invest your time and money in scaling your business.
Pivot: If you’re solving the wrong problem or targeting the wrong audience, it’s time to pivot. Pivoting isn’t failure—it’s a smart way to adapt based on what you’ve learned.
Stop: If the numbers don’t work or the market isn’t there, stopping might be the right choice. Ending a startup doesn’t mean you’ve failed. It means you’ve learned valuable lessons that will help you in your next venture.
Final thoughts
Startups are exciting because they’re uncertain. But that uncertainty doesn’t have to paralyse you.
When you ask the right questions and test your assumptions, you can cut through the fog and make decisions with confidence.
Viability isn’t about perfection, you just need to be making progress. Every startup faces challenges, whether it’s finding the right customers, fixing a product, or tweaking a business model. What matters is how you respond.
The best startups solve real problems in ways that customers can’t imagine living without. If you can do that, you’re on the path to success.
And if you’re not there yet, don’t worry. The process of figuring it out is where the real magic happens.