Sell first, then produce: use pre-sales and small orders to prove demand before you invest in production
UpdatedGrade BBig benefitMoneyLow costSome timeSome willpower
An Italian study found that founders who set a hypothesis and tested it against market feedback ran better businesses. They were also more likely to pivot in time, and did not quit earlier. So if nobody prepays or places a small order, don't trust «make it and buyers will appear».
- Cost
- Tens to hundreds of yuan for a sample or a landing page, then reach dozens of real customers for prepayment or small orders. That is slower by weeks than making stock first. The hard part is not producing before anyone pays.
- Benefit
- A randomized controlled trial tracked 116 Italian startups for about one year. A randomized controlled trial randomly splits people into two groups, trains only one, then compares outcomes. Founders trained to decide by «hypothesis first, then strict market-feedback tests» performed better. They were also more likely to pivot to other plans in time, and early dropout was not higher. Projects that look viable but can't work—the authors call them false-positive projects. The authors' explanation is that this approach cuts the chance of pouring more money into such projects (Italy, published 2020).
- Notes
- Only this one study, small sample, Italy only—grade B. Title, venue, and abstract were checked via Crossref and Semantic Scholar; effect sizes in the full paper were not verified here. Operationally: no prepay and no small order means don't believe «make it and buyers will come».
Sources · 1
- Camuffo A, Cordova A, Gambardella A, Spina C (2020). A Scientific Approach to Entrepreneurial Decision Making: Evidence from a Randomized Control Trial. Management Science 66(2):564-586. doi.org/10.1287/mnsc.2018.3249