How do you validate a SaaS idea without building it?

Run tests that ask someone to give up something before you write any code: find three people already paying to solve the problem, interview five to eight about what they actually did, put up a priced page and count who reaches checkout, then deliver the outcome by hand for a few customers. Each is cheaper than the next and each can end the process — which is the point.

What is a fake door test and how do you run one?

A fake door test is a real landing page for a product that does not exist yet: the promise, the price, a buy button. You drive targeted traffic to it and count how many people reach the payment step. It works because it measures behaviour under a realistic frame instead of opinion in a vacuum — and it is only honest if the next screen tells the truth.

How many customer interviews do you need?

Five to eight interviews with people who genuinely have the problem is usually enough to reach saturation — the point where new conversations stop producing new information. You know you are there when the third or fourth person independently describes the same workaround in nearly the same words. If five people describe five different problems, you have not found a segment yet.

What is the Mom Test?

The Mom Test is a rule for customer conversations from Rob Fitzpatrick: ask questions so grounded in the person's actual past that even someone who loves you cannot give you a falsely encouraging answer. In practice it means asking what they did, what it cost and what they tried — never whether they would use your idea.

How much does it cost to build a SaaS MVP?

Building it yourself costs time rather than money — typically eight to sixteen weeks of evenings. A freelance team in India runs roughly ₹4–12 lakh for a genuine first version; an agency runs two to four times that. The range is wide because scope, not skill, drives it: every integration, every role, and every compliance requirement multiplies the total.

How do you know if your idea is validated?

An idea is validated when four things are true at once: you can name people who already pay to solve this problem some other way, you have heard the same workaround from several of them independently, you know who holds the budget and what they last bought, and at least one person has given up money, time or reputation on the strength of your offer. Three out of four is not validated — it is promising.

How do you calculate TAM?

TAM — total addressable market — is the annual revenue available if every buyer who could possibly need your category bought from someone. Calculate it bottom-up: count the businesses or people who have the problem, multiply by what they would realistically pay per year. Do not start from an industry report; a number you cannot decompose is a number you cannot defend.

How do you calculate SAM?

SAM — serviceable addressable market — is the part of TAM your product could serve today given what it does, where you can sell, and who you can reach. You get to it by applying explicit filters to TAM, not by multiplying TAM by a percentage you picked. Each filter should be a fact about your product or your distribution, and each should be written down.

How do you calculate SOM?

SOM — serviceable obtainable market — is the share of SAM you can realistically capture in a stated period, usually two to three years. Build it from your actual channel capacity: how many buyers that channel reaches per month, what share convert, and what you can service. It is the only one of TAM, SAM and SOM that should ever appear in a financial plan.

What is the difference between TAM, SAM and SOM?

TAM is everyone who could ever buy the category. SAM is the part of TAM your product can serve today, given what it does and who you can reach. SOM is what you can realistically win in a stated period through a channel that works. They narrow in that order, and only SOM belongs in a financial plan.

What is the difference between bottom-up and top-down market sizing?

Top-down sizing starts from a published market figure and applies shares to it. Bottom-up starts from a countable number of buyers and a price someone pays, and multiplies. Bottom-up is the one to build a plan on, because every input is something you can go and check — and correct when it turns out to be wrong.

11 answers · formula, worked example, and what goes wrong

Founder questions, answered properly

One question per page. Every answer opens with the answer, gives the method as steps you can follow, works a real example with real arithmetic, and ends by telling you whether the number you produced is even plausible.

Validation

6 answers

How do you validate a SaaS idea without building it?Run tests that ask someone to give up something before you write any code: find three people already paying to solve the problem, interview five to eight about what they actually did, put up a priced page and count who reaches checkout, then deliver the outcome by hand for a few customers.7 min read4 stepsworked example
What is a fake door test and how do you run one?A fake door test is a real landing page for a product that does not exist yet: the promise, the price, a buy button.6 min read4 stepsworked example
How many customer interviews do you need?Five to eight interviews with people who genuinely have the problem is usually enough to reach saturation — the point where new conversations stop producing new information.5 min read4 stepsworked example
What is the Mom Test?The Mom Test is a rule for customer conversations from Rob Fitzpatrick: ask questions so grounded in the person's actual past that even someone who loves you cannot give you a falsely encouraging answer.5 min read4 stepsworked example
How much does it cost to build a SaaS MVP?Building it yourself costs time rather than money — typically eight to sixteen weeks of evenings.6 min read4 stepsworked example
How do you know if your idea is validated?An idea is validated when four things are true at once: you can name people who already pay to solve this problem some other way, you have heard the same workaround from several of them independently, you know who holds the budget and what they last bought, and at least one person has given up money, time or reputation on the strength of your offer.5 min read4 stepsworked example

Market sizing

5 answers