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Karol Andruszków
Karol is a serial entrepreneur who has successfully founded 4 startup companies. With over 11 years of experience in Banking, Financial, IT and eCommerce sector, Karol has provided expert advice to more than 500 companies across 15 countries, including Poland, the USA, the UK, and Portugal.
How to Validate Marketplace Idea Before You Build?
Updated:
Thu, May 8
Czas czytania: 17 minut
Most marketplace failures don’t come from bad tech or weak design. They fail because nobody needed what was built, or because only one side showed up.
Without proof that each side has a real need and will transact, you're guessing.
Validation removes that guesswork. It helps you avoid overbuilding, overspending, and launching into a void.
In this guide, you’ll learn how to:
- Test demand, supply, and pricing before writing code
- Build a Minimum Viable Product (MVP) smartly
- Track user behavior, retention, and feedback to confirm product-market fit
We share a step-by-step validation framework based on experience and marketplace examples.
You'll walk away with practical tools, clear next steps, and a sharper understanding of 3 pillars: what to build? what to skip? and when to scale.
Let’s get started.
Why Validate a Marketplace Idea?
Building a two-sided marketplace is challenging. You’re not solving one problem, you’re solving two, for two different groups of users.
Think riders and drivers, or hosts and guests. You need both sides to show up and interact, which creates the classic “chicken-and-egg” dillema.
According to CB Insights, one of the top reasons startups fail is a lack of market need. This hits marketplaces even harder. You’re trying to meet the needs of two customer groups at the same time.
Marketplace history is full of cautionary tales.
Founders who assumed “if we build it, they will come” ended up with empty platforms. They poured time and money into development before proving that anyone actually wanted what they were building.
As Y Combinator’s Michael Seibel warns, you need to prove you’re solving a real problem before you commit serious resources.
Marketplace history is full of cautionary tales.
Founders who assumed “if we build it, they will come” ended up with empty platforms. They poured time and money into development before proving that anyone actually wanted what they were building.
As Y Combinator’s Michael Seibel warns, you need to prove you’re solving a real problem before you commit serious resources.
“Great marketplaces do not simply aggregate a market; they enhance it.”
Bill Gurley, Benchmark VC
That means your marketplace needs to create value for both sides,not only connect them.
Finally, remember: belief in your idea is not enough.
As YC’s Jared Friedman puts it:
“No one knows for sure if a startup idea will work.”
You might feel confident about your vision, but your job is to test that feeling with real evidence.
Let’s dive in and help you build the foundation for a marketplace that people actually want.
Finally, remember: belief in your idea is not enough.
As YC’s Jared Friedman puts it:
“No one knows for sure if a startup idea will work.”
You might feel confident about your vision, but your job is to test that feeling with real evidence.
Let’s dive in and help you build the foundation for a marketplace that people actually want.
Step-by-Step Framework for Marketplace Validation
Firstly, you should understand that validating a marketplace idea is a process, not a one time task. You’re going to test assumptions and learn what your users look for.
We’ll walk you through a proven framework used by successful marketplaces.
Each step is enhanced with practical tactics, real examples, and insights from the market. You can (and should) repeat steps as you learn - this process is iterative, not linear.
Here’s the quick overview of the roadmap:
1. Define Assumptions and Hypotheses
Before anything else, get clear on what must be true for your marketplace to work. What assumptions are you making about the supply side? The demand side? What behaviors are you expecting from each group? These become your hypotheses to test.
2. Customer Discovery (or Problem Validation)
Talk to real people on both sides of the market. Learn about their pain points, existing solutions, and willingness to try something new (and pay for it!). Your goal here is to understand whether the problem is real and painful enough to solve.
3. Market Research and Sizing
Is the opportunity big enough? Look at both total addressable market and niche segments. A small but urgent problem can still be a winning niche.
4. Smoke Test the Idea
Before writing a single line of code, test the waters. Create a landing page that explains your value proposition and lets people sign up. Run targeted ads. Are people clicking? Signing up? This gives you early signal, without building the product.
5. MVP / Prototype Phase
Deliver the service manually or with a simple prototype. Match supply and demand yourself, behind the scenes.
6. Launch MVP and Measure
Now build a foundation of your marketplace. Get it into users’ hands and track metrics. Numbers will tell you if you're delivering value.
7. Evaluate Results & Iterate
Review what you’ve learned and decide on the next steps.
This framework helps you validate the right things at the right time. In the next section, we’ll dig into Step 1: defining your marketplace assumptions.
We’ll walk you through a proven framework used by successful marketplaces.
Each step is enhanced with practical tactics, real examples, and insights from the market. You can (and should) repeat steps as you learn - this process is iterative, not linear.
Here’s the quick overview of the roadmap:
1. Define Assumptions and Hypotheses
Before anything else, get clear on what must be true for your marketplace to work. What assumptions are you making about the supply side? The demand side? What behaviors are you expecting from each group? These become your hypotheses to test.
2. Customer Discovery (or Problem Validation)
Talk to real people on both sides of the market. Learn about their pain points, existing solutions, and willingness to try something new (and pay for it!). Your goal here is to understand whether the problem is real and painful enough to solve.
3. Market Research and Sizing
Is the opportunity big enough? Look at both total addressable market and niche segments. A small but urgent problem can still be a winning niche.
4. Smoke Test the Idea
Before writing a single line of code, test the waters. Create a landing page that explains your value proposition and lets people sign up. Run targeted ads. Are people clicking? Signing up? This gives you early signal, without building the product.
5. MVP / Prototype Phase
Deliver the service manually or with a simple prototype. Match supply and demand yourself, behind the scenes.
6. Launch MVP and Measure
Now build a foundation of your marketplace. Get it into users’ hands and track metrics. Numbers will tell you if you're delivering value.
7. Evaluate Results & Iterate
Review what you’ve learned and decide on the next steps.
This framework helps you validate the right things at the right time. In the next section, we’ll dig into Step 1: defining your marketplace assumptions.
Step 1: How to Define Your Hypotheses and Assumptions
Every successful marketplace starts with a clear understanding of who it's for and what assumptions you're making about those users.
At Ulan Software, we often guide founders through a simple positioning statement, as recommended by YC and others:
The platform links [Group A] with [Group B] to tackle [problem] using [solution]
Let’s say you’re building a marketplace that connects freelance photographers with small event organizers. We’ll continue using this example throughout the article to make each step easier to understand.
You’re assuming organizers want affordable, last-minute access to photographers. Photographers want more flexible, short-term gigs.
From this, you can already outline a few key assumptions:
These assumptions become your hypotheses. In other words, statements you need to test and validate.
Few example:
Trust assumption: “Organizers will feel comfortable booking a photographer they’ve never met, based on a short profile and a few sample photos.”
Behavior assumption: “Photographers will accept jobs with less than 48 hours’ notice, as long as pay is fair.”
Financial assumption: “Both sides will accept a 15% platform fee on top of the price.”
We’ve seen too many founders skip this step and make decisions based on what they would do but not what real users will actually do. Writing these assumptions down makes you to acknowledge the gaps between your idea and reality.
To explore different pricing strategies and platform fee models, take a look at our breakdown of service marketplace monetization models.
For example, if you’re not sure organizers are even willing to pay for a photographer at casual events, that’s a huge red flag. You need to test this early.
Focus on the riskiest and least certain assumptions first. These are the ones that can save you months of wasted effort.
For example:
You’ll test each of these in the upcoming steps.
At Ulan Software, we often guide founders through a simple positioning statement, as recommended by YC and others:
The platform links [Group A] with [Group B] to tackle [problem] using [solution]
Let’s say you’re building a marketplace that connects freelance photographers with small event organizers. We’ll continue using this example throughout the article to make each step easier to understand.
You’re assuming organizers want affordable, last-minute access to photographers. Photographers want more flexible, short-term gigs.
From this, you can already outline a few key assumptions:
- Event organizers are actively looking for photographers for casual events like birthdays or company meetups.
- Photographers are willing to accept ad-hoc jobs through a new platform if they get enough leads or better payment terms.
These assumptions become your hypotheses. In other words, statements you need to test and validate.
Map Out the Critical Assumptions
Now, list all the underlying assumptions your idea depends on. Be especially honest about the ones that feel risky.Few example:
Trust assumption: “Organizers will feel comfortable booking a photographer they’ve never met, based on a short profile and a few sample photos.”
Behavior assumption: “Photographers will accept jobs with less than 48 hours’ notice, as long as pay is fair.”
Financial assumption: “Both sides will accept a 15% platform fee on top of the price.”
We’ve seen too many founders skip this step and make decisions based on what they would do but not what real users will actually do. Writing these assumptions down makes you to acknowledge the gaps between your idea and reality.
To explore different pricing strategies and platform fee models, take a look at our breakdown of service marketplace monetization models.
Prioritize What to Test First
Not all assumptions are the same. Some are low-risk, like “photographers have Instagram portfolios.” Others could sink your whole concept.For example, if you’re not sure organizers are even willing to pay for a photographer at casual events, that’s a huge red flag. You need to test this early.
Focus on the riskiest and least certain assumptions first. These are the ones that can save you months of wasted effort.
Your Output of Step 1
By the end of this step, you should end up with a short, clear list of testable hypotheses.For example:
- Demand-side hypothesis: “Event organizers in mid-sized cities will use an app to book vetted photographers for under $150 per event, because it's cheaper and more convenient than hiring through an agency.”
- Supply-side hypothesis: “Freelance photographers will join the platform if they can get 2–3 extra gigs per month and keep at least 85% of their earnings.”
You’ll test each of these in the upcoming steps.
Step 2: Marketplace Customer Discovery
Once you’ve mapped out your key assumptions, it’s time to leave the whiteboard and start talking to real people.
If you’re building a platform for photographers and event organizers, that means interviewing both groups. This includes people who book photography services (demand side) and those who offer them (supply side).
For example, if you’re interviewing freelance photographers, ask:
“How do new clients usually find you? ”
“What’s your typical booking process like? ”
“What part of your job takes the most time outside of shooting? ”
Now switch to the demand side. They are event organizers, small business owners, or even individuals planning personal events:
“Have you ever needed to hire a photographer? How did you find one? ”
“What made it easy (or frustrating) about that process? ”
“Did you ever give up or settle for someone you weren’t sure about? ”
If someone says, “I ended up asking a friend because I couldn’t find anyone I trusted online,” that’s a pain point worth digging into.
Pro tip: Use the Mom Test approach (from Rob Fitzpatrick’s book The Mom Test).
Never ask leading questions like “Would you use a marketplace to do XYZ?” – people tend to say yes to be polite.
But if you ask, “Can you walk me through the last time you tried to hire a photographer?” their answer reveals what they did, not what they wish they did.
You can find photographers on Instagram, in Facebook groups, or on freelancing platforms. Event organizers hang out in LinkedIn groups, local business forums, or coworking communities.
For example:
Demand-side insight: “Out of 10 people who hosted events in the last year, 7 said finding a reliable photographer was harder than expected. Several paid more than they wanted, and 2 skipped photography altogether due to lack of options.”
Supply-side insight: “Photographers said they get most clients via referrals or Instagram DMs. Many struggle with last-minute gaps in their schedule and would be open to a platform that fills them, as long as they keep control over pricing and availability.”
If neither side shows real pain or interest, that’s not failure but a signal to rework your idea before moving forward.
If you’re building a platform for photographers and event organizers, that means interviewing both groups. This includes people who book photography services (demand side) and those who offer them (supply side).
Talk to Real Users (But, Please, Don’t Pitch!)
Aim for at least 5 to 10 interviews per side. These can be casual chats or more structured conversations, but come prepared with a few open-ended questions. Don’t start by pitching your idea. Instead, focus on understanding how your users behave today.
For example, if you’re interviewing freelance photographers, ask:
“How do new clients usually find you? ”
“What’s your typical booking process like? ”
“What part of your job takes the most time outside of shooting? ”
Now switch to the demand side. They are event organizers, small business owners, or even individuals planning personal events:
“Have you ever needed to hire a photographer? How did you find one? ”
“What made it easy (or frustrating) about that process? ”
“Did you ever give up or settle for someone you weren’t sure about? ”
If someone says, “I ended up asking a friend because I couldn’t find anyone I trusted online,” that’s a pain point worth digging into.
Pro tip: Use the Mom Test approach (from Rob Fitzpatrick’s book The Mom Test).
Never ask leading questions like “Would you use a marketplace to do XYZ?” – people tend to say yes to be polite.
But if you ask, “Can you walk me through the last time you tried to hire a photographer?” their answer reveals what they did, not what they wish they did.
Where to Find People to Interview?
You don’t need a research lab - go where your users are.
You can find photographers on Instagram, in Facebook groups, or on freelancing platforms. Event organizers hang out in LinkedIn groups, local business forums, or coworking communities.
Example of Your Output of Step 2
At this point, you should have a clearer picture of what each side needs and where your platform could deliver real value.For example:
Demand-side insight: “Out of 10 people who hosted events in the last year, 7 said finding a reliable photographer was harder than expected. Several paid more than they wanted, and 2 skipped photography altogether due to lack of options.”
Supply-side insight: “Photographers said they get most clients via referrals or Instagram DMs. Many struggle with last-minute gaps in their schedule and would be open to a platform that fills them, as long as they keep control over pricing and availability.”
If neither side shows real pain or interest, that’s not failure but a signal to rework your idea before moving forward.
Step 3: How to do Market Analysis
While you're talking to potential users, it's important to do some quantitative research. You want to make sure you’re not building a solution for a market that’s too small, or overcrowded.
This step helps you answer two key questions:
Is the market big enough to support a marketplace?
Is there real, measurable demand for this solution online?
Let’s break it down.
Let’s say your target city hosts around 100,000 small events per year. If 30% of those events typically hire photographers, that’s 30,000 potential bookings. At an average of $200 per shoot, you’re looking at a $6 million annual opportunity in just one city.
Now go one step further and define your starting niche. Maybe you focus first on local business events, which account for 10,000 of those bookings. That focus can help you craft features, marketing, and onboarding specifically for that group. As the result it will make your early growth more manageable.
You can roughly define:
TAM (Total Addressable Market): All freelance photography bookings in your country or market.
SAM (Serviceable Available Market): The portion you can serve in year one—say, bookings in your city or industry.
You don’t need perfect numbers. You only need to know whether there’s enough demand to support a functioning, healthy marketplace.
Use tools like:
Search for terms a potential customer might use:
“hire a photographer for an event”
“local event photographer”
“last-minute photographer booking”
Let’s say you find that “event photographer near me” gets 2,400 monthly searches in your region. That’s a strong sign that demand exists—and that people are actively looking for better ways to solve this problem.
Look at:
-> Search volume (how many people are looking each month?)
-> Search intent (are they looking to book or browse/scroll?)
-> Keyword difficulty (how competitive are the search results?)
If you see high volume and moderate to high competition, that usually means demand is real, but the current solutions may not be meeting all needs. That’s your opening.
You might even find underserved sub-niches with their own search terms like:
“affordable photographer for baby shower”
“photographer for small business event”
“female event photographer in [city]”
These can guide how you position your marketplace and what kinds of photographers you recruit first.
For example:
Search Reddit, Quora, or niche Facebook groups to find real user feedback. Phrases like “Can anyone recommend a photographer who’s not overpriced?” or “I wish there was an app for this” can signal pain points and opportunities to differentiate. Like here. Check the example.
If you're now thinking about how to turn this opportunity into a real product, our guide on developing service marketplaces can help you plan both the technical and strategic side.
This step helps you answer two key questions:
Is the market big enough to support a marketplace?
Is there real, measurable demand for this solution online?
Let’s break it down.
#1 Estimate the Market Size
In our case, think about how often people need photographers and who those people are:- Private events like birthdays, engagements, and small weddings.
- Small business events like product launches or networking nights.
- Content-driven businesses needing brand or social media photography.
Let’s say your target city hosts around 100,000 small events per year. If 30% of those events typically hire photographers, that’s 30,000 potential bookings. At an average of $200 per shoot, you’re looking at a $6 million annual opportunity in just one city.
Now go one step further and define your starting niche. Maybe you focus first on local business events, which account for 10,000 of those bookings. That focus can help you craft features, marketing, and onboarding specifically for that group. As the result it will make your early growth more manageable.
You can roughly define:
TAM (Total Addressable Market): All freelance photography bookings in your country or market.
SAM (Serviceable Available Market): The portion you can serve in year one—say, bookings in your city or industry.
You don’t need perfect numbers. You only need to know whether there’s enough demand to support a functioning, healthy marketplace.
#2 Analyze Search Trends and Keyword Demand
The next step is to check if people are already searching for solutions like yours online.Use tools like:
- Google Keyword Planner
- Ahrefs or Ubersuggest
- Google Trends
Search for terms a potential customer might use:
“hire a photographer for an event”
“local event photographer”
“last-minute photographer booking”
Let’s say you find that “event photographer near me” gets 2,400 monthly searches in your region. That’s a strong sign that demand exists—and that people are actively looking for better ways to solve this problem.
Look at:
-> Search volume (how many people are looking each month?)
-> Search intent (are they looking to book or browse/scroll?)
-> Keyword difficulty (how competitive are the search results?)
If you see high volume and moderate to high competition, that usually means demand is real, but the current solutions may not be meeting all needs. That’s your opening.
You might even find underserved sub-niches with their own search terms like:
“affordable photographer for baby shower”
“photographer for small business event”
“female event photographer in [city]”
These can guide how you position your marketplace and what kinds of photographers you recruit first.
#3 Understand the Competitive Environment
Finally, scan the current options people use to find photographers today. Are there other platforms? Are users mostly relying on social media, agencies, or referrals?For example:
- Instagram and Facebook are full of photographers, but there's no booking or pricing transparency.
- Traditional photography agencies may be too expensive for smaller events.
- Generic platforms like Thumbtack or Craigslist might be crowded, unreliable, or poorly filtered.
Search Reddit, Quora, or niche Facebook groups to find real user feedback. Phrases like “Can anyone recommend a photographer who’s not overpriced?” or “I wish there was an app for this” can signal pain points and opportunities to differentiate. Like here. Check the example.
Example of Your Output of Step 3
By the end of this step, you should have a one-pager summarizing:- Market size: “~$6M spent on event photography annually in [target city] across small private and business events.”
- Search demand: “‘Event photographer near me has ~2,400 searches/month; related terms total over 5,000/month with high booking intent.”
- Competitive gap: “People rely on Instagram or agencies; there’s no simple, trustworthy way to compare, book, and pay photographers in one place.”
If you're now thinking about how to turn this opportunity into a real product, our guide on developing service marketplaces can help you plan both the technical and strategic side.
Step 4: Low-Cost Smoke Tests
Now that you’ve confirmed there’s a problem worth solving, it’s time to test whether your solution sparks interest. You can do this without writing a single line of backend code.
One of the simplest ways to do this is by creating a landing page MVP, also known as a smoke test or fake door test. It’s a fast, low-cost way to evaluate demand and collect early leads.
Since we’re working with the example of a photographer booking platform for events, your landing page might say:
Headline: “Book Trusted Local Photographers for Your Next Event”
Subtext: “Browse portfolios, compare prices, and book in minutes. Perfect for birthdays, company parties, and more.”
Add a simple call to action, like “Join our waitlist for early access” or “Get matched with a photographer.”
This simple test gives you:
You can also run small ad campaigns. Even $100 in targeted Facebook or Google Ads can give you useful data. Track the numbers. If 200 people visit and 40 sign up, that’s a 20% conversion rate.
Great validation for an early-stage idea!
“Over 500 people visited our landing page in two weeks, and 80 signed up for early access (16% conversion). Most were organizers of private events, but 12 photographers also registered interest.”
You’ll also begin to spot where the momentum is stronger - on the supply or demand side.
That helps you plan your next steps, especially if one side proves harder to attract (which, in most marketplaces, is usually supply).
One of the simplest ways to do this is by creating a landing page MVP, also known as a smoke test or fake door test. It’s a fast, low-cost way to evaluate demand and collect early leads.
Build a Landing Page That Sells the Concept
Set up a single page that clearly explains your marketplace idea.
Since we’re working with the example of a photographer booking platform for events, your landing page might say:
Headline: “Book Trusted Local Photographers for Your Next Event”
Subtext: “Browse portfolios, compare prices, and book in minutes. Perfect for birthdays, company parties, and more.”
Add a simple call to action, like “Join our waitlist for early access” or “Get matched with a photographer.”
This simple test gives you:
- Quantitative data. In other words, how many people are actually interested enough to engage?
- Leads. Meaning a list of potential users you can contact, interview, or invite later.
Drive Traffic to Your Page
A landing page with zero traffic tells you nothing. Share it where your audience already hangs out:- Post in photographer groups or local event forums.
- Join Facebook communities for event planning and offer the page as a “new solution in development.”
- Reach out to early interviewees and ask if they’d like to be first in line.
You can also run small ad campaigns. Even $100 in targeted Facebook or Google Ads can give you useful data. Track the numbers. If 200 people visit and 40 sign up, that’s a 20% conversion rate.
Great validation for an early-stage idea!
Output of Step 4
By the end of this step, you should have real indicators of interest, like:
“Over 500 people visited our landing page in two weeks, and 80 signed up for early access (16% conversion). Most were organizers of private events, but 12 photographers also registered interest.”
You’ll also begin to spot where the momentum is stronger - on the supply or demand side.
That helps you plan your next steps, especially if one side proves harder to attract (which, in most marketplaces, is usually supply).
Step 5: Developing a Marketplace MVP
By now, people have shown interest in your online marketplace. But will they actually use it? That’s the next test and it’s a big one.
MVP lets you find out by simulating the full experience without building the platform.
What Is an MVP?
Your Minimum Viable Product (MVP) is the simplest version of your platform that lets real users interact, make requests, and complete transactions. It strips away nice-to-haves and focuses only on what’s essential for the core experience.
In a marketplace, that usually means:
This step validates something crucial: can you deliver the promised value, connect both sides, and get someone to pay?
Best of all, this step often brings in your first real revenue, which is the strongest form of validation there is.
Not sure whether to build your MVP from scratch or use a ready-made solution like Sharetribe? Here's our take on when to go custom vs Sharetribe.
“We facilitated 12 bookings in three weeks, with a 75% fulfillment rate and one repeat customer. All payments were handled manually. Feedback from both sides was positive, with minor friction around scheduling.”
That’s real-world proof that your idea can deliver value. You’ve built trust, tested demand, and learned what the future platform must include.
You’re no longer guessing. You’re building based on experience.
MVP lets you find out by simulating the full experience without building the platform.
What Is an MVP?
Your Minimum Viable Product (MVP) is the simplest version of your platform that lets real users interact, make requests, and complete transactions. It strips away nice-to-haves and focuses only on what’s essential for the core experience.
In a marketplace, that usually means:
- User registration
- Listings or request forms
- A way to connect both sides
- A basic payment option
This step validates something crucial: can you deliver the promised value, connect both sides, and get someone to pay?
Why This Works
At Ulan Software, we've helped clients run MVPs to:- Test whether users will actually complete a transaction
- Discover where manual processes break down
- Understand what makes early customers delighted or disappointed
Best of all, this step often brings in your first real revenue, which is the strongest form of validation there is.
Not sure whether to build your MVP from scratch or use a ready-made solution like Sharetribe? Here's our take on when to go custom vs Sharetribe.
Output of Step 5
You should now have real interactions between both sides of your online marketplace, even if they were completely manual. Ideally:“We facilitated 12 bookings in three weeks, with a 75% fulfillment rate and one repeat customer. All payments were handled manually. Feedback from both sides was positive, with minor friction around scheduling.”
That’s real-world proof that your idea can deliver value. You’ve built trust, tested demand, and learned what the future platform must include.
You’re no longer guessing. You’re building based on experience.
Step 6: Track Early Metrics
Once your MVP is live, your task is to observe how users behave.
Are people using the platform, completing bookings, and coming back?
At Ulan Software, we advise founders to focus on a small set of practical metrics that show whether the marketplace is taking off or needs refining.
On the supply side, look at utilization. Are photographers getting hired? If someone lists 10 slots and books only 2, that’s 20% supply liquidity.
“How was your experience? ”
“What would you improve? ”
“Would you use it again? ”
This helps explain your metrics and uncover hidden friction.
“47 organizers signed up. 21 sent booking requests. 11 bookings completed (52% liquidity). Three users returned. Early feedback: smooth experience, but more photo previews needed.”
That’s your first real validation signal. Use it to guide your next steps.
Are people using the platform, completing bookings, and coming back?
At Ulan Software, we advise founders to focus on a small set of practical metrics that show whether the marketplace is taking off or needs refining.
Are Matches Happening?
Liquidity is the clearest sign your platform is working. For event organizers, track what percentage of booking requests lead to successful matches. If 20 out of 40 inquiries result in a booking, that’s 50% demand-side liquidity.
On the supply side, look at utilization. Are photographers getting hired? If someone lists 10 slots and books only 2, that’s 20% supply liquidity.
Do Users Come Back?
If users book once and vanish, that’s not a good sign. But if they return for another shoot or refer a friend, you’re solving a real problem. A 20–30% repeat rate within the first month is a strong early sign of product-market fit.What Are Users Telling You?
Don’t watch numbers, also talk to users. After each transaction, ask:
“How was your experience? ”
“What would you improve? ”
“Would you use it again? ”
This helps explain your metrics and uncover hidden friction.
Are People Willing to Pay?
Track how many bookings result in actual payment through the platform. You want to confirm that users trust your system enough to transact and that they understand your value.Your Output for Step 6
By the end of this step, you should have some metrics and numbers:- A number of real interactions
- First signs of repeat usage
- Clear feedback pointing to what’s working and what’s not
“47 organizers signed up. 21 sent booking requests. 11 bookings completed (52% liquidity). Three users returned. Early feedback: smooth experience, but more photo previews needed.”
That’s your first real validation signal. Use it to guide your next steps.
Step 7: Decision Time - What is Next?
By this point, you’ve collected feedback, data, and real-world behavior. Now it’s time to step back and ask: Do we have enough proof to scale? Or do we need to adjust before moving forward?
Put it all in one document. This becomes your validation report. Compare the results to your original hypotheses. Which assumptions held up? Which didn’t?
Your answers here will shape your next move.
Add features to remove friction. Work on better search, reviews, guarantees, referral systems, or trust badges. Validation often requires multiple loops before the fit is clear.
Create a Validation Debrief
Start by summarizing what you’ve learned:- Interview insights
- Landing page conversions
- Concierge MVP outcomes
- Early platform metrics
Put it all in one document. This becomes your validation report. Compare the results to your original hypotheses. Which assumptions held up? Which didn’t?
Your answers here will shape your next move.
Option 1: Double Down and Scale
If the core signals are strong you’ve likely reached early product-market fit. Now shift focus to growth. Invest in marketing, improve onboarding and automation, raise capital if needed.Option 2: Iterate and Refine
If some parts work and others don’t, look for specific blockers. Maybe users love the idea but don’t trust providers. Probably supply is thin or demand isn’t converting.Add features to remove friction. Work on better search, reviews, guarantees, referral systems, or trust badges. Validation often requires multiple loops before the fit is clear.
Option 3: Pivot or Walk Away
If key signals are weak after you effort, it may be time to rethink the idea. Maybe acquisition is too expensive, or one side of the market won’t engage. That doesn’t mean you’ve failed. It means your validation process worked. It saved you from scaling a broken model.Validation Pitfalls Lessons
Even well-funded startups fail when they skip key parts of validation. Here are common mistakes and what you can learn from them.
Lesson: Don’t scale until users return without incentives. Fix quality and retention before growth.
As Paul Graham says, startups don’t take off on their own. Founders make them take off through real user engagement.
Scaling Too Early
Homejoy raised $40M and expanded fast, but users didn’t stick around. Only 25% returned after one month, and fewer than 10% after six. The experience was inconsistent, and retention relied on heavy discounts.Lesson: Don’t scale until users return without incentives. Fix quality and retention before growth.
Overbuilding Before Testing
Founders often spend months building complex platforms, only to launch to silence.
As Paul Graham says, startups don’t take off on their own. Founders make them take off through real user engagement.
"Actually, startups take off because the founders make them take off. There may be a handful that just grew by themselves, but usually it takes some sort of push to get them going. A good metaphor would be the cranks that car engines had before they got electric starters. Once the engine was going, it would keep going, but there was a separate and laborious process to get it going."
Ignoring Supplier Incentives
Marketplaces fail when suppliers don’t stick. High fees or lack of value can push them to transact off-platform. Validate why suppliers will stay. Make it easier, safer, or more profitable to use your platform than to bypass it.
Not Building Trust and Safety Early
A common mistake is delaying trust features. If your validation feedback raises trust concerns (safety, fraud, quality), address them early.
Platforms like Airbnb and Uber invested early in trust measures. They validated that without these, many users wouldn’t participate.
As a founder, you might think these are “nice to have,” features. However, user interviews often reveal they are must-haves for validation in certain industries.
Explore our list of 15 hands-on marketplace validation tactics to supplement the framework with real techniques.
Final Thoughts
Don't strive for perfection while validating your marketplace idea. Talk to users and test assumptions. Measure what matters. Each step helps you build with confidence, not guesswork.
Whether you decide to scale, iterate, or pivot, do it based on real signals.
At Ulan Software, we help founders go from idea to launch with smart validation, fast MVP development, and a clear focus on what matters.
If you’re planning a marketplace and want an experienced partner to guide the process, let’s talk.
Whether you decide to scale, iterate, or pivot, do it based on real signals.
At Ulan Software, we help founders go from idea to launch with smart validation, fast MVP development, and a clear focus on what matters.
If you’re planning a marketplace and want an experienced partner to guide the process, let’s talk.
Karol Andruszków
Karol is a serial entrepreneur who has successfully founded 4 startup companies. With over 11 years of experience in Banking, Financial, IT and eCommerce sector, Karol has provided expert advice to more than 500 companies across 15 countries, including Poland, the USA, the UK, and Portugal.
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