The worst thing you don’t want to do is to start a business, invest resources into it and find out later that your target audience don’t need your product. Hundreds to thousands of new businesses fold up every year because of wrong product for a target market. Others fail because there is not enough demand for the product or service.

Other factors for startup failure include lack of a cash cushion, operational mediocrity or inefficiencies, declining market and sometimes owners cannot get out of their own way.  If the owners of new businesses really knew what they were doing wrong, they might have been able to fix the problem. Often, it’s simply a matter of denial or of not knowing what you don’t know.

But the good thing is that if you have to start a new business, there are now countless resources on how to validate your idea before you even get started to increase your chances of success. No amount of investor funds can convince prospective customers to buy or sign up for something they don’t want. You just have to build products people want ( It’s the best way to start a business).

Mike Krieger, Instagram’s founder shared these tips and principles at a 500 Startups’ Warm Gun conference.

To build something that solves a problem, “You want to know people better than they know themselves.” “Just because you’ve Googled something doesn’t mean you’ve learned,” Krieger.

Mike Krieger’s Eight Principles Of Product Design:

1. Draw On Previous Experience and Understanding – The biggest problem is startups in search of a problem. Chase what you’re passionate about; you’ll probably already have knowledge in the space.

2. Have A Hypothesis About How You’re Different – Have a point of view about your startup. Why is there a special opportunity for this now?

3. Never Build Without Sketching – Mike says he and Instagram co-founder Kevin Systrom would go to a cafe with little iPhone design pads where “we’d build and throw away entire features. You’d waste three or four pieces of paper, not three weeks of coding.”

4. Learn In Weeklong Increments – Start with a question: “Will folks want to share photos on the go? Can we build filters that look good?” Spend the week investigating, and by Friday have a conclusion and move on.

5. Validate In Social Situations – “We called this the Bar Exam. If you can’t explain it to the guy or girl at the bar, you need to simplify.” Don’t just test with your techy friends.

6. Know When It’s Time To Move On – “I know ‘pivot’ has become a dirty word, but if there’s no unanswered questions left, then it’s time to move on.”

7. The Wizard Of Oz Techniques For Social Prototyping – You don’t need to build everything at first. You can be the man behind the curtain. Krieger says him and Systrom tested an early version of a feature which would notify you when friends joined the service.

Instead of building it out, they manually sent people notifications “like a human bot” saying ‘your friend has joined.’ It turned out not to be useful. “We wrote zero lines of Python, so we had zero lines to throw away.”

8. Build And Maintain A Constant Stream Of Communication With Your Audience – Don’t spend months building something without any idea if someone actually wants it.

8 principles courtesy Techcrunch