Simple-Fill: A Study of Concept Stage Market Validation
Building a product that the world wants is the cornerstone of building a great company. Here’s a real-world example of how Simple-Fill, an Ohio State University spinout, continually worked with industry leaders to validate the problem and solution of economically refueling small to mid-sized fleets. The challenge for Simple-Fill, which is the same for any company transitioning from Concept to Seed Stage.
The result—Simple-Fill is in beta test with Safelite AutoGlass with a new class of industrial compressors, initially focused on compressed natural gas (CNG). Simple-Fill’s refueling system will provide fleet operators lower, more stable and predictable fuel costs compared to gasoline or diesel fuels.
Achieving credible, repeatable customer validation
Simple-Fill founder, Rob Underhill, spent months with potential user/buyer Safelite AutoGlass, buyer Honda, and supplier Worthington Industries to gain validation for Simple-Fill’s problem hypothesis and proposed solution.
The information he gathered added credibility to his business plan; funding sources began to believe that if the CNG compressor worked, it would solve a big problem—the cost of fuel—by making CNG accessible and affordable for fleet refueling. The requirement was to prove that the compressor system functioned as planned by building a working prototype.
Investors in businesses like Simple-Fill rarely have a product to see (it’s expensive to build a prototype machine) or paying customers to survey. Instead, look for external problem/product validation—evidence that someone besides the entrepreneur has a strong interest in the company’s ideas.
With a confident vision for an alternative to gasoline for fleets, Simple-Fill set out to build strategic relationships with key automotive players and compression technology experts. Seeing the company actively engaging those partners made Concept Stage investors more interested, too.
The following validation checklist is specific to Simple-Fill, but the high-level roadmap could apply to any advanced manufacturing startup that requires external investment to build a market-validation prototype.
- Simple-Fill’s technology is spun out from The Ohio State University Center for Automotive Research (CAR), a pre-eminent interdisciplinary research center in sustainable and safe mobility.
- Honda provided a grant to Ohio State to further the compression technology.
- Worthington Cylinders provided non-dilutive funding to and in-kind services to assist Simple-Fill in developing its compressed natural gas system.
- Simple-Fill received a commitment to test and buy the first beta unit from Safelite AutoGlass before the unit had been built.
- The CEO of Simple-Fill is a serial entrepreneur with experience in the sector, and has invested his own funds.
- The lead research scientist previously with CAR has joined the Simple-Fill management team full time
- Simple-Fill’s Advisory Board includes the director of CAR, and recognized technology and industry experts.
- Simple-Fill’s strategic relationships with Rev1 funding partners Worthington Industries and Safelite AutoGlass led to co-investment, board of director seats, manufacturing partnerships, and customer agreements.
“I’m really excited about Simple-Fill’s technology because it enables small, medium, and large distributed fleets, such as mine, to adopt compressed natural gas (CNG) as an alternative fuel. The cost to install and maintain infrastructure is the barrier preventing widespread adoption of CNG. Simple-Fill’s solution may well smash that barrier.” – Erin Gilchrist, Director, Fleet Operations, Safelite AutoGlass
Passion and good ideas aren’t enough by themselves to get investors to open the purse.
Entrepreneurs who obtain Concept Stage market validation from customers who have a huge problem that they will pay to solve are more likely to build successful companies…and attract investors.