The $20 Starbucks Test

A couple of weeks ago I had the good fortune to meet Hugh Crean, the ex-CEO of Farecast, ex-Microsoft executive (they acquired Farecast) and current Entrepreneur in Residence at General Catalyst. A group of us talked to Hugh for close to an hour, and I learned more about the travel industry in that short span than I’ve learned in a lifetime of flying, hoteling and using Kayak, Priceline and the like.

The purpose of our chat with Hugh was to get some feedback on a project we are working on, and Hugh shared a cool $20 technique for validating your new product, service or startup idea that I’d like to pass on. Here is how it works:

1. Get yourself a nice crisp $20 from an ATM
2. Go down to your neighborhood Starbucks
3. Walk up to strangers with empty coffee mugs and tell them you are worried about your brother, need some advice, and can you buy them a cup of coffee in exchange for a quick 5 minutes of their time. (This will be awkward for most of you to do. Get over it. The “worried about my brother” line is a bit of psychology that means most people won’t turn you down. If they do turn you down, you just got a point in the Rejection Therapy Game anyway, so consider yourself lucky).
4. Buy them a simple coffee, not a mocha-whippa-frappa-latta-chino; you want your $20 to last.
5. Explain that your brother has a crazy business/product idea, and that he’s about to get a 2nd mortgage on his house, raid his 401k and quit his job. His wife is a nervous wreck, afraid that they’ll lose their house and retirement fund, and he’s hit your parents up for seed money that they really can’t afford to lose. Your parents and your sister-in-law have come to you for help to try to talk him out of his hair-brained scheme.
6. Explain that this is where they come in, your brother is a very logical and reasonable guy, and can be convinced by good reasons, but he has been blinded by thinking this is a really good idea. The problem is, you sort of agree with him, so you need some really solid reasons to give him as to why his idea won’t work, and why he shouldn’t proceed with his plan. Then… pitch your idea! Sell it the best way you can. Respect their time (you asked for 5 minutes), but give the best 2-3 minute pitch you can.
7. Now, ask for their reasons the idea won’t work. Keep them focused on the idea, not the backstory (they may want you to convince your brother of the merits of retirement savings or the dangers of 2nd mortgages), and really listen. Resist the temptation to argue against their objections. Then thank them heartily for their time.
8. Repeat until your $20 runs out.

What will you learn from the experiment?

The most likely outcome is you’ll hear mostly the same obvious rejections of your idea that you yourself have and have come to believe are surmountable. Your $20 didn’t generate any great new insight, but was an inexpensive check that you aren’t blind to an obvious shortcoming.

A good outcome, is that you hear lots of interesting and sound new objections that you never thought of before. This should give you real pause about your idea. Both its merits, if the objections are good ones, and the extent that you’ve sufficiently thought through your idea and are being realistic about it.

A not so likely outcome is that your strangers will find themselves agreeing with you and your “brother” that it is a great idea. They themselves will want to buy the product or service and they’ll start naming other people that need it. They’ll also probably apologetically offer up a few lame objections, because that’s what you asked for. In the unlikely event this happens with your idea, you probably have a real hit on your hands. Run with it!

Two quick caveats… this works best for a consumer product or service. If your idea is for a better steel retracting refluxerator for pediatric heart surgeons, then the man on the street in the coffee shop might not be a great source of insight. Also you have to get comfortable with the white lie you’ll be telling about your “brother”. If you can’t get comfortable with that, it’s understandable, but it is an important part of the technique. The negative priming and the distancing of yourself from the idea gives your coffee companion free reign to trash your idea so find some other way to provide some distance from the idea. If instead you say it’s your idea, then even when you invite criticism and honesty, people will candy-coat their feedback. Luckily our social norms will not stand in the way of them trashing your brother who’s not in the room.