How to validate a taco stand

What if you wanted to open a Taco stand? 

Like a taco-truck on the side of the road.  
 
How would you do it?
 
A typical “wantrepreneur” would do the following:
  • Start researching licenses and city permits.  
  • Scout out possible lease locations and speak with all the property owners. 
  • Start Googling taco recipes.
  • Take out a loan (or borrow money) to buy a truck or cart.
  • Spend money and time to get the truck food-certified by the city.  
  • Start looking for employees to help with making the tacos.
  • And…… 
  • A……
  • Bunch……..
  • Of……. 
  • Other……
  • Boring……
  • Stuff……. 
 
Soooo after all that work, thousands of dollars, and months of time…. where are we?NO WHERE!
 
NOT ONE FUCKING TACO HAS BEEN SOLD!!
 
So let’s say $10,000 later, and 6 months down the line….we’ve got this magical taco truck ready.  
 
We excitedly go out to our pre-researched location and turn on the “Open for Business” sign!  
 
::CRICKETS CHIRPING::
::CRICKETS CHIRPING::
::CRICKETS CHIRPING::
::CRICKETS CHIRPING::
::CRICKETS CHIRPING::
 
Well shit.  That didn’t work out so well.  We were open all day & night, we spent hundreds of dollars on fresh meat, avocados, tortillas…..and we only sold 10 tacos the whole night.  
 
“But oh well, it was just the first night…..we’ll get more business soon!” 
 
The next night….
And the next night….
Aaaand the next night……
And our taco truck is still bleeding money.  
 
And since we spent all our money and all our time on this…..we still desperately cling onto this shitty business.  
 
All because WE DIDN’T FIRST VALIDATE THE IDEA.  
 
Bad. Bad. Bad. Bad. Bad. Bad. 
 
 
————————————————————————
————————————————————————
Ok, now let’s take a break and re-do this whole taco-truck idea as if we knew how to validate ideas before jumping in:  
————————————————————————
————————————————————————
 
The absolute FIRST THING TO DO is see if people even WANT your tacos.  
 
Now there’s hundreds of things that could make a successful food business……so instead let’s focus on something the late & great Gary Halbert said:
 
Gary Halbert said (I’m paraphrasing here):
 
“If you opened a hot dog stand…..and I opened a hot dog stand……I can beat the PANTS off you.
It doesn’t matter if you have better hot dog buns, or fresher meat, or more condiments….. 
My secret would be setting up my hot dog stand around a STARVING CROWD.”  
 
 

Using this theory, let’s do a taco-stand validation in one day:

 
FIRST STEP.) Let’s make a bunch of tacos at home (maybe 25-50 tacos) and wrap them in foil.  
 
SECOND STEP.) Let’s take those tacos to some location we think there is a starving crowd, and stack them in little pyramid on a cheap plastic table.
THIRD STEP.) Let’s use some markers and poster-board to make a big-ass sign that says:
 
“HOT BEEF TACOS – $2 each”
FOURTH STEP.) See if people actually buy all your tacos. 
That’s it.  Kind of like this:
DO YOU REALIZE WHAT WE’VE DONE HERE ALEADY??
In one day, we’ve understood:
  • How easy or hard it was to make all those tacos.
  • How much time it took to make the tacos.
  • How much money it took.
  • If we even LIKED doing this work.
  • If our tacos were delicious, or shitty.  
  • A rough estimate of how much to charge for each taco.
  • If the location was good or bad.
  • …..and most importantly:
  • If people even WANTED our tacos from that location.
The next day, we can repeat the experiment, but try a different time, or location, or even an entirely different product…..and see if it works.  
 
And don’t give me shit about, “But Nevillleee…..what about city permits and stuff!!”
 
There’s many ways to get around this (such as setting up your stand on private property like a bar stoop or house lawn)……or even doing it WITHOUT permission.  If a cop actually tried to stop you (highly unlikely), you can just shut down the experiment and repeat elsewhere.  
 
(I asked cops in my bottled water experiment what they would do if they saw me selling water without a permit…..they said, “We don’t really care”) 
 
BE SCRAPPY.  
BE CREATIVE.  
USE LOOPHOLES.  
 
The point of this is to SEE IF PEOPLE WANT YOUR DAMN TACOS.  And if you do an experiment like this, you’ll learn SO MUCH.  
 
So if night-after-night your tacos sell out within 20 minutes…..You’ve proved that people love your tacos, love your location, and love your prices.  
 
…..you might actually have a damn good business on your hands!
 
However if no one buys, or the logistics of taco-making are just entirely too difficult (or boring) for you…..it might make sense to just SHOOT THIS IDEA IN THE HEAD AND KILL IT BEFORE IT SUCKS UP ALL YOUR TIME AND MONEY.  
 
………………and there you have it. We validated a taco stand! 
 
 
Sincerely, 
Mexican Neville
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    Blog posted on: August 13, 2012

    30 comments on “How to validate a taco stand

      1. Neville Post author

        hahaha…..oh yea….lemme re-write this:

        STEP ONE.) Spend $100,000 and 2 years getting an MBA from Harvard (not to mention the year of applying to get in).

        STEP TWO.) Sell tacos

        Reply
    1. Desmond Ong

      One brilliant lesson that I managed to pull away from your courses and content is VALIDATION.

      This totally changed my mind completely.

      Over the years, we’ve lost tens of thousands of dollars setting up businesses that are later… doomed to fail.

      Now that we’ve learned the important lesson of “VALIDATION”, we’re a bit more careful now when investing in a new business.

      I’m still wondering why they don’t teach this in business schools. :)

      Desmond

      Reply
    2. Billy Murphy

      Great post Neville. I thought you were actually going to start the stand and show people how easily Neville’s tacos could become a dominant taco player in the Austin scene. Part 2? :)

      Reply
      1. Neville Post author

        It’s pretty easy:

        STEP 1.) Sell tacos.
        STEP 2.) Put crack in the tacos.

        ….instant best sellers.

        In fact I’m pretty sure this is what Taco Deli already does :-)

        Reply
    3. Damien

      Great post Nev!

      For sometime I thought I was the only fan of Sir Gary Halbert till I found u (that sounded mushy)!

      Steve Jobs is right! You will learn only later what connected the dots!

      Reply
        1. Damien

          Bet you downloaded his ‘how to get women’ book?

          But well, you might not need it with ur blessed outlook.

          He has a page in Facebook created by Bond, do take a look.

          Reply
    4. Dylan Watkins

      Very good info for “TACO’s” but there are some basic elements missing, at least where food truck are concerned.

      Before I go into it, I just want to let you know I am not talking out of my ass.
      I was 1 of the first gourmet food trucks in the OC.

      NOT successful at first. I studied the industry, rebranded with new menu and now I am one of the busiest trucks in SOCAL. BTW I haven’t worked on my truck or for my truck in 4 months.

      1. Concept – was is sexy and delicious to you or your audience. (must be specific, do not go with ANY TASTY)

      2. Branding – what is the simplest and easiest way to get your point across
      3. Seek Feedback – Go to where the mobile food is being sold and interview, owners and customers (ask 1) what are you eating 2) what would you like to eat, 3) Would you like TACOS )
      4. Form alliances – Share insight with other owners and trade skills. could be cooking, sales, marketing, automation, coding WHATEVER. JUST GIVE VALUE before looking for any in return. Ask – for their opinions
      5. Learn, develop, Launch.

      There of course is way more but the main point and where a lot of people fail is with the concept validation and congruency.
      Is my idea Clear, Specific, and Desirable.
      Does my logo, brand, website, truck, and food are all congruent, easy to understand and desirable then DO IT

      Good luck EVERYONE, hit me up if you got and questions. burgermosnter.net

      Reply
    5. Nickolay Lamm

      Nev, the only problem with your business validations is that it can take years to make an idea compete with what’s out there. Let’s say you do a validation test and it failed. It failed not because it was a bad idea, but because there are already established competitors with advantages that took years to build (reputation, money, something only they know, etc.) And, even if a validation is succesful, you’ll have competition in no time because that validation took little effort and time. I believe a “wantrapteneur” is better off investing in a few things than go through hundreds of business validations that offer no competitive advantage in the long run

      Reply
      1. Dale

        @Nickolay: That’s why you validate. You go back and figure out why it failed. Then you fix it and validate it again. In the process, you learn how to create a competitive advantage. Beats going out, spending a lot of money, and then building something that turns out doesn’t have a competitive advantage.

        Reply
        1. Nickolay Lamm

          Nev, I completely agree with you on this. I just think a lot of people who use your validation advice may feel that it’s okay to validate totally unrelated business ideas.

          Also, I’m a big fan of yours and have been following your blog for 7 years now.

          Reply
          1. Neville Post author

            What’s wrong with doing unrelated businesses?

            EVERY successful person I know started their success from a “random” business they tried out or stumbled into.

        1. Nickolay Lamm

          The key, in my opinion, is to create quality validation tests if you’re testing totally unrelated business ideas, which can take 1 week to 1 month depending on the idea. Otherwise you are wasting your time because you are hopping from one bad quality validation test to the next.

          That was the point I was trying to make.

          Reply
    6. Nickolay Lamm

      Another thing, which I found out the hard way…

      Do validation tests only on things you have a chance of succeeding at. The more tests you do, the more you know what fights to choose.

      Reply
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