Validate with Commitments, Not Surveys: The Financial Validation Gap

A survey is an opinion. A waitlist is a maybe. A signed customer is a fact. Most corporate validation never crosses the gap between those first two and the third, and that gap is financial: nobody asked anyone to pay before the build.

Let me share a personal confession: I was the typical self-taught Lean Startup guy when I started with entrepreneurship and innovation. If I could pinpoint real customer problems, run customer interviews, and make sure that I ran the perfect product experiments, the money side would magically figure itself out later.

But I kept running into this stubborn truth:

It doesn't matter how awesome your product is if nobody's pulling out their wallet.

You can talk about "customer problems" and "pain points" all day.

You can gather piles of encouraging feedback. But unless those encouraging words translate into an actual commitment—a deposit, contract, or some firm "Yes, here's my money", you still have a long way to go.

And the truth is, I still see this financial validation gap everywhere.

It's the chasm between "Hey, cool idea!" and "Shut up and take my money." If you don't fill that gap early, you might pour months (or years) of precious resources into something your audience admires from afar…while never paying for it.

Once you see it, you can fix it.

35% or Even 80% Fail Due to No Market Need

There's a well-known (old, but saddening) figure from CB Insights: 35% of startups fail because there's "no market need."

That number can skyrocket to 80% in the corporate world because of strategic affairs. That's unbelievable when you think about all the time, people, and budgets thrown at "innovative" projects.

Lean Startup and Customer Development taught us to: "Talk to your customers," "Get out of the building," "Validate your assumptions," "Pivot often."

And still, those painful stats remain. But why?

A lot of innovators, even the ones diligently doing those "customer discovery" interviews, rarely tackle the business part of the question:

Will this be worth actual money to the potential customers?

During interviews (or worse, directly asking if they want to use it) you might hear, "Sure, I'd use that!" or "That sounds like a neat solution." Then you run off excitedly to build the product.

But the difference between "I'd use it" and "Here's my credit card" is the difference between success and a failure that gets killed only after 3 to 5 years. And for whatever reason, I experience that most innovation managers still find it very hard or even scary to pitch the price of their solution, because the product should be perfect before you ask for money.

Commitment before anything else

This oversight is what I call the Financial Validation Gap. We often pat ourselves on the back for user feedback or even a prototype people seem to like.

And lets be very honest: It feels very safe to hear all these compliments during interviews, roundtables and surveys.

But, as my mom always told me; "This won't buy you any groceries".

There's a comfort zone in focusing on "the problem" and "the solution," because it lets us delay the more daunting conversation about cold, hard cash. Yet, that conversation is crucial for the success of every innovation project. Without it, you risk building something that never quite justifies its price, building for the wrong customer (not user!) and leaving you with a product that might be technically cool but commercially unviable.

My Own Hard Lesson: Mulberries Agency

Let me give you a real example, right from my own entrepreneurial journey—something I still have nightmares about: Mulberries Agency (Yes, this whole sherade even applies to services!)

I was sure it was a home run. My co-founder and I were already running innovation programs for startups and corporate clients, so we thought, "Hey, they'll obviously need marketing and IT services next! Let's buy an agency, rename it Mulberries, and watch the synergies explode."

Guess what happened?

The synergy never exploded.

It turns out those same clients either had no budget for extra services or already had their own agency relationships locked in, so the "guaranteed pipeline" never materialised.

Within months, Mulberries' biggest client left, the agency bled money, losing half a million euros in the process, and as a second-order consequence, my co-founder and I broke up. Ultimately, I had to liquidate the company because it was distracting me too much from our core business.

What was the fatal error?

We didn't test if our beloved synergy was actually something clients were willing to pay for. We knew they had problems developing proper apps, websites and SaaS solutions, but we didn't ask for any formal commitments or deposit checks before acquiring the agency. We would've seen how shaky our assumptions were if we had demanded even a handful of paid-up-front contracts. It's a mistake that's seared into my memory and a big reason I'm so passionate about financial validation now. Lucky for me, I experienced this very early in my career (I was 27 years old when this all happend).

A $900 Billion Mistake

Building before you know someone will pay can destroy entire projects and entire companies. KPMG estimates that $900 billion gets wasted each year on failed innovation ventures. That's an insane amount of money, but the spillover effects can be equally devastating:

Opportunity Cost: Every day you sink into a doomed project is a day you could have spent exploring a more promising idea.
Team Burnout: Nothing undermines morale like pouring your heart into a product that limps out of the gate with no customers.
Skepticism from the Top: If you're in a big company, failing to secure actual buyers can sour your leaders on all future innovation projects. You basically lose their trust.
Sunk Cost Spiral: The more you invest, the harder it is to pivot or stop. You chase your losses, hoping to fix a fundamentally flawed concept.

Even colossal players like Meta, Google and Amazon have launched big, fancy products— Metaverse, Google Glass or the Amazon Fire Phone, all of them flopped. Yes, they can absorb these hits thanks to deep pockets, but the principle remains: building something "cool" or "better" doesn't matter if the real world won't pay for it.

And ironically, building can feel like progress. It's tangible. Your team can point to working code, designs, or prototypes. But if you never tested the revenue side, you might just be building a polished version of something that ends up on the corporate innovation graveyard.

The Commitment Ladder

Commiting to a new product or service comes in different forms. I like to think of validation in terms of a Commitment Ladder:

Polite Praise – "Oh, that's a neat idea," or "Very interesting!"
Contact Info – They'll sign up for your newsletter or let you follow up.
Time Investment – They hop on calls, maybe do a demo.
Public Endorsement – They'll share or recommend your idea publicly.
Financial Commitment – They give you money. A deposit, a signed contract with a dollar figure, or a preorder.

The first four can be encouraging, but they're also cheap (for the person giving them). It doesn't "hurt" them too much. The last one, financial commitment, is where actual validation happens. In the real world, wallets are the most significant lie detectors. You can gather all the compliments you want, but you're still stuck in guesswork until you see money on the table.

Behavioral economist Dan Ariely has plenty of studies showing how big the gap can be between "I'd definitely buy that" and "Let me actually buy that." Unless your prospects pull out their creditcards, you still don't know if you have something valuable or just a nice idea.

The 40% Rule

So, how many of your potential customers should be committing before you start building or ask for a bigger investment?

Our standard target is a 40% conversion rate from at least ten pitches. While that may seem high, meeting this goal in the early stages of your innovation signals strong commercial feasibility. Remember, you've already conducted around 50 to 70 discovery interviews, giving you significant insights into your potential customers.

If you're well below 40%, you have to revisit the problems you are solving and double-check if your solution is the right one.

Also note that the 40% conversion target applies only to pitches; we don't aim for this rate on landing pages, emails, or other channels. In my view, testing your proposition there at this stage primarily shows you why people buy, while it's far more important to understand why they don't commit.

The Pitch MVP

Now, maybe you're thinking, "Alright, I won't build yet. But how exactly do I get people to pay for something that doesn't exist?"

That's where the Pitch MVP comes in—a twist on the classic MVP concept. Instead of building a minimal product, you focus on building a pitch that's strong enough to secure a real commitment.

Here are the building blocks:

Confirm the Problem: During the problem discovery phase, you learned a lot about their headaches, emotional well-being, the impact of these problems, and how much they cost. During this phase of your pitch, you should reconfirm their problem and what existing solutions they use right now.
Value Proposition & Pricing: Clearly state your promise and how it will change their lives, define how you will deliver on your promise (your solution), and state how much your solution will cost them.
Visual Prototype: Instead of full-blown software or hardware, show wireframes, storyboards, or mockups. The point is to make your concept tangible enough for people to grasp without forcing you to invest in full development. Don't spend more than 2 days on these visual prototypes; the real meat is in your value proposition, not your prototypes.
Risk Reversal: Offer a satisfaction guarantee or a promise that if you don't meet certain targets, they can walk away or get a refund. This reduces the psychological risk for your prospect. In the end, you are offering something that doesn't exist yet. They take a risk to commit, but you should also keep holding on to your promise.
Ask for commitment: Now it is time to ask for deposits, pre-orders, signed letters of intent, or a subscription with credit card details, anything that proves they really want to commit.

The key difference from a typical MVP is you're not building a partial version of the product yet. You're building a strong narrative, backed by a visual or tangible representation, to see if the market is ready for your idea. If they do, you know you're onto something. If not, you get to pivot early with minimal damage.

At Amazon, people get 3 months and a 25k budget to prove commercial feasibility. If there's no commercial proof, the project gets killed.

Why I like the Pitch MVP as a tool

Instant Feedback: After the proper discoveries, you learn quickly if people hesitate when you ask them for a financial commitment. They might love the concept but pull back at the price—or they might jump at it, which is exactly what you want.
Resource Efficiency: You don't waste months coding or engineering. You spend a fraction of that time refining your pitch and visuals until you find a proposition that sparks real buying interest. You even learn which features should have priority over others.
Built-In Customer Focus: Customers feel like co-creators When they pay (or commit to paying). They'll give you candid feedback on what features matter most.

Working This into a Corporate Setting

If you're inside a big company, you might be thinking, "No way will my higher-ups let me talk to customers about budgets before we've built anything." Or maybe you worry that internal politics or procurement processes will block you from testing a concept without first having something in hand.

But honestly: Those same bureaucracies can be even more reason to test financial feasibility as quickly as possible. If you don't, you risk a multi-million-euro fiasco that haunts the company for years. Position your approach as "risk reduction" rather than an extra delay.

Tips for Corporate Innovators

Frame It as Protecting the Bottom Line: Explain that validating financial interest first saves the company from expensive resources.
Focus on different metrics: Rather than measuring how many prototypes or features you churn out, measure how many committed customers (or budget-holding stakeholders) say "yes" to your concept.
Involve Leadership Early: If senior leaders see you're taking a disciplined approach, they're more likely to trust your results—and grant you the time to keep iterating.
Budget for Validation: Make sure some portion of your "innovation budget" is set aside for creating visuals, prototypes, and pitch materials, so you're not pressured to jump straight into heavy development.

Common Pushbacks

"Our Customers Don't Have Budget for This Right Now."

If it's important enough, they'll reallocate or find a way. If nobody's willing to free up budget, that's the loudest warning sign you can get that you are not on the right track.

"They Won't Understand Until We Have a Working Prototype."

The Pitch MVP framework should be enough to explain your value. If you can't explain it in a simple pitch, building a fully functional version probably won't solve the clarity problem. In the past 4 years, 78% of all the projects we've helped, were able to get financial commitments based on this framework.

"Our Innovation Is Too Disruptive for an Early Payment."

Then find an early adopter who's adventurous enough, or adjust your approach. If it's too alien to everyone, you have a bigger challenge than just building, you are probably building something too complex for your target group. "Being too early", isn't a valid excuse in my opinion.

"This Will Slow Us Down."

Actually, skipping financial validation is what really slows you down, imagine spending six months building something that no one buys.

A Real Advantage in a Culture Obsessed with Speed

We live in a culture that worships "move fast and break things." But if you're building blindly, you might end up breaking your own bank account (or your boss's trust). On the other hand, if you validate financially first:

You Invest Wisely: Every euro or dollar goes toward something people have shown they're willing to pay for.
Higher Chance of Success: You're not guessing—customers have already voted with their wallets.
Faster Feedback: You'll know quickly if your price is off or if you need a feature they consider essential.
Stronger Investor and Executive Buy-In: Showing real monetary interest beats any pretty slide deck.

And because so many people skip this step, you'll stand out as the one who insists on proof before building. That sets you on a sharper trajectory to build what the market wants—without wasting time and cash on guesswork.

Validating a product's technical feasibility or user flow is necessary. But it's only half the story. If you're serious about sustainable growth, you must confirm that real customers will buy at a price that sustains your business model.

With the current economic landscape, in my opinion, everyone should focus on: business model validation before product development.

This is where the biggest breakthroughs happen: when you ask the uncomfortable question, "Are you willing to commit now?" and don't proceed until a significant portion says "Yes."

A Formal Process: PreXLR

If you're nodding along and wondering how to embed this approach systematically, check out the PreXLR methodology. It's a 12-week program designed to help teams make sure their ideas are financially validated. Over that period, you conduct 50–70 customer conversations, each aiming to confirm the willingness to pay.

By the end, you either have a financially validated project, or you decide to kill the idea quickly. That's the beauty of a structured approach: it keeps you honest and spares you from building the wrong things.

In Closing

We've talked for years about Lean Startup, but we've still left out a critical piece: financial commitment. Combining classic Lean methods with a bold ask: "Prove you'll pay, or we're not building!" will save you a lot of headaches and sleepless nights. You'll stop weak ideas early and double down on the ones that show real promise in improving the ROI on your innovation portfolio.

It can feel like you're slowing down initially, but in the long run, you'll zoom faster toward real success. Your CFO (or investors) will love it, your team will skip months of wasted labour, and you'll sharpen your market understanding in record time.

So the next time you're tempted to green-light a new prototype or platform, pause and ask: Do we have pre-orders or commitments from enough customers? If not, your job isn't to build a product, it's to build a pitch and find out if people want to pay for it.

If you liked this perspective or know someone who keeps burning money by building too soon, share this article. Invite them to try a Pitch MVP approach or check out PreXLR for a structured path.

Remember:

Don't build unicorns. Breed blue whales.

Commitment is the only validation. It is the first law of Revenue Engineering and the core of PreXLR. If that sounds like your situation, book a discovery call.

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