In 1999, a guy sold shoes online without owning a single pair of shoes.

Twenty years later, Amazon had paid over $1 billion for the company.

Every business starts as a theory, and entrepreneurs love building.

The problem is that many entrepreneurs spend months and thousands of dollars building something to prove a theory that could have been tested in a weekend.

You must always remember that most successful businesses did not start looking anything like the companies we know today.

They started by answering one simple question…

“Will anyone actually pay for this?”

Your first job is proving the theory before you build the business.

When people picture starting a business, they usually imagine websites, logos, inventory, software, office space, and all the other things that feel like progress.

The problem is that those things are expensive. More importantly, they are based on assumptions.

One of the hardest lessons I’ve learned as both an entrepreneur and someone who has helped more than 1,600 businesses is that our assumptions are often wrong. Mine certainly have been.

I’ve spent time building things people didn’t care about. I’ve spent money on ideas that sounded great in my own head. Every entrepreneur collects a few of those stories.

The goal is not to avoid being wrong.

The goal is to find out you’re wrong before you’ve invested months of work and thousands of dollars.

Zappos is one of my favorite examples of this because they understood this lesson from the beginning.

Today, people think of Zappos as the online shoe company Amazon acquired for over $1.2 billion.

It didn’t begin that way.

When founders Nick Swinmurn and Tony Hsieh wanted to test whether people would buy shoes online in 1999, they didn’t build warehouses. They didn’t negotiate massive inventory contracts. They didn’t develop sophisticated logistics software.

They walked into local shoe stores.

They took pictures of shoes sitting on their shelves.

They posted those pictures on a simple website called ShoeSite.com.

When someone placed an order, they went back to the store, bought the shoes at retail price, packaged them, and shipped them to the customer.

From the customer’s perspective, it looked like a normal online store.

Behind the scenes, it was held together with duct tape and determination.

Startup circles call this a Wizard of Oz MVP (Minimum Viable Product).

The customer experiences a finished product while the business manually performs the work behind the scenes.

It sounds almost silly.

It was also incredibly smart.

They weren’t trying to build a billion-dollar company on day one.

He was trying to answer one question.

Would people actually buy shoes over the internet?

Everything else could wait.

Once demand was proven, the business evolved.

Later that same year, ShoeSite became Zappos and shifted to a drop-shipping model, where manufacturers fulfilled many of the orders.

A few years later, the company discovered that relying on third parties hurt customer service. That insight led them to build their own fulfillment warehouse in Kentucky in 2002.

Notice what happened.

The warehouse wasn’t Step One.

It became the next logical investment after they knew customers existed and after they understood what needed improvement.

Each stage was built on evidence instead of hope.

That is how smart businesses grow.

Unfortunately, many first-time entrepreneurs do the opposite.

They spend six months building a website.

They perfect the logo.

They order inventory.

They pay developers.

Then they finally ask the market what it thinks.

Sometimes the market answers with complete silence.

Bad luck sure does seem to be more common when you skip the validation stage.

The same principle applies even if your business doesn’t sell physical products.

Planning to start a consulting business? Offer the service manually before building an expensive platform.

Creating an app? Validate that people have the problem and will use a simplified version before writing (or paying someone to write) thousands of lines of code.

Build only what the next stage requires.

Your first version should answer your biggest question, not accomplish your biggest dream.

Every business begins as a collection of assumptions.

Successful entrepreneurs test those assumptions one at a time.

That approach rarely makes headlines. It also saves an enormous amount of money, time, and frustration.

Weekend Exercise

Think about the business idea you’ve been considering.

Write down the single biggest assumption your business depends on.

Finish this sentence:

“My business only works if people are willing to __________________.”

Now ask yourself how you could test that assumption in the simplest possible way.

The goal is to avoid spending hundreds or thousands of dollars. You also want to avoid wasting thousands of hours.

Could you pre-sell it?

Could you manually provide the service?

Could you build a simple landing page?

Could you interview ten potential customers?

Don’t worry about making it perfect.

Your only goal this weekend is to identify one assumption and one inexpensive way to test it.

That’s how businesses start smart.