Market validation is the process of determining whether your product is of interest to a specific target market. Market validation includes a series of customer surveys with people in the target market, and this almost always happens before you make a significant investment in your product/concept.
Even inexperienced entrepreneurs can market amazing products with enthusiastic customers on the first day.
By merely talking to real people and asking the right questions, you can confirm whether your idea solves the problem, who your potential buyers are, and ultimately whether there is a market for your product.
1. Write down your product concept
Just a simple act of writing makes you think about things that you may have previously hushed up. We're not talking about writing a "business plan." (For startups, a business plan is not the best use of time and will change as soon as you start talking with potential customers).
It is essential to answer a few key questions that you can check and test. These are your assumptions, and the sooner you can test them, the less risk there will be when you launch your product.
Write down some underlying assumptions that you can verify:
Who is your customer? If you say "everything," you are already setting yourself up for a difficult time. Be sure to check. For example, if your client is an enterprise, answer: which enterprises? How big or small is a typical business? In a particular market? What is the name of the buyer?
What problems do you solve? Therefore, many entrepreneurs first think about the product - they worry about its capabilities, launch the product, and then wonder why their product has difficulty getting support. This means that you must identify the problems that your product solves. Having written down these problems, you can check whether clients consider them also issues. And more importantly, do customers find their problems worth solving?
How does your product solve these problems? Only after recording the problem you go to the product. From here, you directly relate the value of your product to customer problems. How does solving their problems make their life better? Does it make them more money? Do you look better?
What are the main features of the product? Functions should be more than refreshing - they should solve specific problems. The more quantitative (for example, time saved, money earned), the better. Consider a minimally viable product and limit the range of functions as much as possible (you need to provide enough money so that some customers can buy them).
Time and resources are scarce. There is no time to suffer because of the details that, in the end, may not matter.
For this reason, a thorough market review helps successful teams get enough information and data to make decisions. And then they make them. Try to stick to the 80% rule - get enough (valid) information from customer surveys and other data sources, and then make a decision. In the end, you will never achieve 100% confidence, and rapprochement will gobble up too much time.
3. Most of what you record is speculation.
This brings us to the third point: all that you write, the discussions (and discussions) that you have are assumptions. Teams often perceive these discussions (and what is in their head) as a fact when they are just assumptions that need to be verified.
4. Find out the truth by going out to test your assumptions
Once you have made some critical decisions and written down your hypotheses, start checking them to see if they are causing potential customers to respond. Go outside, as well as save valuable time by calling if the type of client requires it.
The lean market assessment is based on interviews with potential buyers of your product. You can also test your assumptions by interviewing experts (e.g., industry analysts, people who have been employed in the industry, consultants, etc.). There are also some great ways to test digital ideas with landing pages and low-cost advertising.
5. Start with your network
We recommend working with your system and networks of friends, mentors, investors, and others to attract potential customers.
The disadvantage of interviewing people on your network is that they are relevant to your case. This means that you are introducing some potential bias into your training. However, some bias is better than not interviewing at all and getting closer to the truth.
Start with a list of questions, but deviate from questions as you learn more. Approach the conversation with curiosity about the problem and needs of the client, and you will get valuable information.
7. Ask, "Why?"
"Why?" Is by far the most critical question you can ask. With it, you can get closer to the truth from customers. Unfortunately, this question is not used often enough - too many people ask a question and then take the answer at face value. This is a missed opportunity to understand motivation and confirm what someone does.
Five Whys is an excellent technique for determining the root cause - the real reason - customer motivation.
8. Find a value proposition
Try to pay less attention to features, and to explain more value propositions for their product. What does this mean? A value proposition is the expected benefit that a customer will receive from using your product. Value can be quantitative, such as time saved or extra earned income. Measuring it is usually simple.
But the value can also be of high quality, for example, pain relief or the lifestyle benefits that your product provides. By carefully understanding and documenting this quality value during customer surveys, you can distinguish your product from competitors.
For example, it can be time-saving, getting more income or, perhaps, some social benefits (for example, good appearance). Be that as it may, these value propositions are directly related to the problems you previously discovered.
9. Loving your idea is not the same as buying your product.
Unfortunately, checking product ideas with potential customers is subjective. There is no black and white answer. Since people tend to be helpful and want to please you (exceptionally friendly university students at Startup Weekend), you have to be careful about accepting their answers at face value.
When someone enthusiastically tells you, "it sounds great" or "this is an interesting idea," your first reaction should be to answer "why?". It's important to understand that someone likes your idea; it's not the same as buying a product. Your job during the checkout process based on the lean market is to eliminate as many of these "false positives."
10. Jump off a cliff and have fun
Startup Weekend is an excellent opportunity for new entrepreneurs to take risks, present their ideas to strangers, form teams, and make new friends. And many continue to build their launch idea and bring it to market.
Try to take risks, jump from a cliff, and enjoy the experience of checking a lean market.