By Tom Huddleston Jr

Copyright cnbc

Hemmati says she and Buhrdorf knew they wanted to build an AI-powered software that helped small businesses manage and file legal documents. They had already witnessed the issue firsthand working at a startup and also found public data that showed it to be a widespread obstacle for entrepreneurs across the country, Hemmati adds.

They initially planned on marketing the service only to existing businesses, but talking to prospective clients made them realize that they should instead target first-time business owners who’ve never navigated a “pretty complex” legal process before, she says.

“We spoke with roughly 50 to 100 prospective customers to understand what they needed most — everything from formation help to ongoing compliance and growth services,” she says. “We ran design sprints, tested different packages and pricing, even built websites and refunded early sign-ups just to see what caught people’s attention and what they were willing to pay for.”

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That strategy proved invaluable, giving Hemmati and Buhrdorf “incredible insight and the confidence to launch,” she adds.

Working with those business owners from the start also meant those clients would be more likely to keep using ZenBusiness’ software as their companies grew, Hemmati says. ZenBusiness has now worked with at least 850,000 small businesses, according to the company.

The takeaway for other prospective entrepreneurs, she says: Any business idea needs to be properly vetted, and the first step is always researching your market and talking to the customers and clients you want the business to reach.

“[Start] by having that communication and collaboration, constantly interviewing your potential customers and learning about what is the next product that they’re interested in, and how you should even go about building it,” Hemmati says.