Using the Business Model Canvas, or a similar framework, you have identified all the hypotheses of the business model.
In particular, you have identified the possible markets segments and their needs (pains/gains), how the envisaged value proposition answers the needs, and how the revenue is generated.
Analyze the market
You have a good understanding of the market structure and segmentation.
You have estimates of the market size and growth.
You have identified the market eco-systems of actors, and who are the potential partners and competitors.
You have identified the market value chain and the position of the intended business in this chain (in particular, which proportion of price paid by the end-customer can be captured).
You have selected one or a small number of segments (<=3) as commercial targets.
You have identified a list of customers to be approached in the next phases.
Validate the Market hypotheses
You have got «out of the building» to test the Market-related hypotheses through direct contact with the end customers in the selected segments.
You know who are the potential customers (the buyers), what are their tasks, the obstacles in performing their tasks (their 'pains') and what could enable them to reach new goals (their 'gains').
You have identified potential partners who can have interest in helping the project evolve (ideally future early customers).
Modify hypotheses if necessary and re-test.
Validate the Solution hypotheses (Value proposition design)
You have got «out of the building» to test, through direct contact with the customers, the proposed solution to the 'pains & gains' identified in the previous step.
You have checked that the solution solves the pains ('pain reliever') or enables gains ('gains creator').
You have an answer to the question: «What is the value in money of solving these pains and enabling these gains?». This testing phase can be helped by a visual or physical 'mock-up' of
the proposed solution (in the form of presentation, pictures, ...) and demo prototypes of various levels of maturity.
If necessary, modify the hypotheses (proposed solution) and re-test.
Achieve Product-Market fit
Based on the validated market needs and value proposition, you have selected the target segment(s) to be addressed, and defined the product specifications of a «Minimum Viable Product» (MVP).
You have verified that the MVP answers the most important customer needs of the target segment.
You have verified that real value can be extracted in the form of revenue.
You have quantified the revenues and costs estimates and verified that there is a profitable business model.
Get ready to sell
You have defined the positioning of the company and products compared to competition, and can explain the uniqueness of the offer.
You have prepared sales material and collaterals: this should include a clear explanation of the global value proposition for the targeted customers as well as description of the constituting products and services.
You have a price list and have developed a preliminary distribution channel plan.
You have a preliminary sales roadmap with a list of customer leads, and how to access them.
Achieve first sales
You have found visionary customers who will buy your product for real money and will be willing to become «»product ambassadors».
You try to sell at standard price without early adopter discount to verify the real value of the offer.
Early customers get a time-to-market advantage in exchange for their risk-taking.
You are selling to 3 to 5 visionary customers.
You get early orders from channel and service partners.
Achieve general sales at a profit
Using the early customers as reference, you sell to a broader range of customers in the target segment.
You got a better view of the operational costs and of the real value for the customers.
You have validated the pricing model and verified that you can sell at a profit.
Validate complete business model and prepare to scale
You have validated that the global business model is profitable and scalable (e.g. verified that the sales are repeatable and scalable).
Pivot if this is not the case: back to customer discovery (CRL<5).
If the business model is validated, prepare for growth by tuning the cost and pricing model for larger volumes,
defining a market plan for growth, identifying the organizational and financial needs. This initiates the transition to the «scale-up» phase of the company.