The Bootstrapped Founder

419: The Missing Piece in Your Validation Strategy

October 17, 2025

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  • The critical missing piece in most founders' validation strategy is investigating non-SaaS alternative solutions, such as extreme DIY methods like spreadsheets, rather than just checking if people have the problem. 
  • The true competitor to a new software solution is often not another SaaS product, but the accumulated time, pain, and effort (the 'moat') invested in configuring existing homegrown solutions like complex Excel sheets. 
  • Founders must investigate all alternative solutions—including legacy software, direct SaaS competitors, open source projects, agencies/services, and doing nothing—to understand price anchors, switching costs, and why customers stick with inferior methods. 

Segments

Sponsor Readout and Validation Intro
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(00:00:16)
  • Key Takeaway: Paddle’s Grow Beyond Black Friday guide offers actionable strategies for payment conversion and billing tactics.
  • Summary: The episode is sponsored by Paddle.com, which handles taxes, currencies, and transactions for SaaS businesses. Paddle released a guide called ‘Grow Beyond Black Friday’ focusing on maximizing revenue and retention through billing tactics. Founders must validate ideas before building, recognizing that simply finding a problem is insufficient validation.
The Missing Validation Step
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(00:01:32)
  • Key Takeaway: Validation fails when founders only check for problem existence and neglect investigating alternative solutions customers currently use.
  • Summary: Many founders stop validation after confirming people have a problem, leading to products that fail to sell against existing habits. The critical oversight is failing to investigate alternative solutions, especially non-SaaS methods people employ to overcome their challenges. Customers often stick with much worse, more complicated current methods if the new solution doesn’t offer a significantly better value proposition.
Spreadsheets as Primary Competitors
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(00:03:30)
  • Key Takeaway: The most common overlooked competitor is the extreme DIY solution, often an Excel or Google Sheet mapping the internal process.
  • Summary: Excel or Google Sheets are often the actual biggest competitors because they are flexible enough to map a business’s internal mental model of a process. Replacing these homegrown solutions is costly because they contain historical data and the painfully learned lessons of establishing that process. A new product must be significantly more maintainable and apt at mirroring this established process to overcome the high switching cost.
Investigating Failed Attempts
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(00:09:10)
  • Key Takeaway: Founders should actively seek out and learn from businesses that previously attempted and failed to solve the same problem.
  • Summary: When looking for competing solutions, founders should first look for the intensity of DIY usage and then search for failed business attempts in that space. Investigating why previous solutions failed—often due to high resistance to moving from DIY to software—provides crucial insight. Assuming success just because no current solution exists is a significant validation error.
Legacy Software Competition
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(00:10:46)
  • Key Takeaway: Legacy software users are not immediate prospects unless an external event forces them to change their established, custom-mapped process.
  • Summary: Legacy software, often installed on old machines with custom processes mapped into it, creates customers who will only seek alternatives when the software breaks or their process changes. Since founders cannot control this external trigger, these users are not active prospects currently. Customer education is useful, but continuous outreach efforts should be limited for this segment.
Analyzing Direct SaaS Competitors
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(00:11:46)
  • Key Takeaway: When analyzing direct SaaS competitors, focus on their positioning, niche targeting, and data integration policies over just feature sets.
  • Summary: Successful competitors serve a specific niche, so founders must analyze how competitors position themselves and who they talk to. Key insights come from understanding the input data, the output result facilitated, and whether the product encourages data lock-in or openness via integrations. This analysis reveals market expectations and potential subgroup differences.
Open Source and Agency Competition
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(00:13:06)
  • Key Takeaway: Free open source solutions compete on price, forcing new SaaS products to compete on workflow, interface, or specialized value.
  • Summary: Open source projects, even if less functional or having arbitrary interfaces, are preferable for budget-restricted users over paid solutions. Agencies and services also compete by executing the ‘job to be done,’ meaning a SaaS product replaces a human service provider. To compete with optimized agencies, a new product must be significantly faster, cheaper, and more reliable.
The ‘Doing Nothing’ Alternative
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(00:16:40)
  • Key Takeaway: A significant portion of the market chooses to ‘do nothing’ and simply suffer through the pain, which is an immovable alternative.
  • Summary: Some prospects view the existing pain as simply ‘part of the course’ and will not seek a solution, making them immune to customer education. The best segments to target are those using legacy systems or spreadsheets for moderately complex tasks, or those using direct competitors where a niche can be served better. Understanding these alternatives reveals true competitors and willingness to pay.