ICYMI: At Atlanta Ventures…WE LOVE AUTHENTIC DEMAND!!!!!!!

It’s our guiding principle when finding new business ideas.

That’s why I spent a whole blog explaining Authentic Demand including 8 articles other team members wrote, 5 resources with examples, and 7 strategies to find Authentic Demand.

But wait…there’s more!

Today, we dig into specifics:

• What do people say?

• What are good signs?

• What are real examples?

• What are misleading “false positives”?

• How long does it take to find the illusive and magical Authentic Demand???

Let the journey begin!

Early Authentic Demand Signals: What To Look For

What They Say:

• “Can I give you money now to build this?” (aka be a Design Partner)

• “I also have a friend who would be interested. How do I get them involved?”

• “I’d like to be a customer and also an investor.”

• “When can we start?”

• “I’ve been looking online for something like this but haven’t found it.”

What They Do:

• Follow up with you, take a second meeting

• Share honest feedback (because they care and want it to exist)

• Login or engage with a prototype

• Pay for it now (not “when this feature is added” → that’s a warning sign)

• Make time to get set up

Real Life Examples of Authentic Demand

“You know it when you see it” is true…but not that helpful 😉

Here are specific examples I’ve seen or experienced with startups that found Authentic Demand:

• Multiple customers get a tattoo of your logo.

• You make a Youtube video of a hacked together version of your product and people comment asking where they can buy it.

• Your marketing manager does implementations for a year because there’s so many new customers signing up.

• 100% quota attainment from every sales rep for multiple quarters.

• You have 6 figures of revenue within one quarter of launching, selling a combination of services and off-the-shelf product.

• Your customers are really mad about some critically bad bugs but they don’t cancel (because you’re still providing so much value).

• Your team is troubleshooting a “high class problem” several times per week.

• You hire multiple in-house recruiters to keep up with hiring targets.

What Authentic Demand is NOT

To offer the counter-point, here are some things that may seem like Authentic Demand but are not, or things that may feel “normal” for startups but indications that you need to dig further!

• Raising lots of money (“good at fundraising” does not necessarily mean Authentic Demand)

• You need paid campaigns for new customers (if you’re paying a lot of money to get a new customer, that’s a yellow flag)

• Customers like you (but don’t love you)

• Easy to get new sales, but low retention/high churn

• Getting meetings (that don’t convert to sales)

• Many deals are slow rolling

• Social media engagement (can be a good sign but this alone is not enough)

• People telling you they like your idea (reread The Mom Test!)

• Rate of sales is steady but not increasing

• Everything feels like a f***ing slog (startups are hard but with Authentic Demand, they are also really fun)

How Long Does It Take To Find Authentic Demand

It depends.

Every founder’s favorite answer. 🙃

Salesloft iterated for 3 years, while building a great community of their target customers, before finding the right product.

In our Studio, most founders spend several months researching and testing a specific idea before launching a company.

The “company” still starts very scrappy with one or more of these strategies to continue to learn and refine the offering.

Even businesses that are physical locations go through significant testing phases like the golf simulator at Atlanta Tech Village before launching Intown Golf Club or doing in-house wine gatherings and signing up 100 paid founding members before breaking ground on The Perlant.

So, successful companies can take months or years to find it.

What I have seen to be true:

When you have it, you feel it and it feels fast.

• You’re struggling to keep up with the demand.

• You’re getting lots of inbound activity.

• You’re dealing with problems of growth, not moving mountains to generate sales.

It’s why it’s SO WORTH IT to take more time in the early stages. Better to spend a year finding Authentic Demand than spend a few months, commit hard, and then roll a boulder up a hill for the next 3 years.

Do you agree with the concept of Authentic Demand? How did you find your business idea? When did you know you were onto something??