What Is Product Validation and How to Benefit from It
How can you quickly validate a startup idea with the least effort and minimum resources? 12 main stages of the product validation process.
Dangerous but attractive
Building a new product from scratch is like riding your first motorcycle. The incredible feeling of speed and wind can’t be compared to anything else, but at the same time motorcycles can be one of the most dangerous vehicles. To ensure a high enough level of safety when riding your iron horse, you should take a few risk-prevention measures: sign up at a moto school and buy a good helmet and protective gear. Nine out of ten deaths during motorcycle accidents are simply down to a lack of helmet.
When building a startup and launching a product, the most important risk-prevention measure is product validation – ensuring there is actual demand in the market before the development and launch. A lack of validation is the reason for nine out of ten startup failures.
Just another good idea?
Chasing big dreams might seem honourable and romantic. However, you shouldn’t fall into the trap of tumbling head over heels in love with your baby idea. Validating an idea before developing it provides a much higher chance of success for the final product. It’s impossible to assure the 100% success of an upcoming product before its actual launch, but the process of product validation can considerably increase your chances.
The thing is, the majority of big ideas start small. You should collect as much credible evidence around your ideas as you can to ensure you make informed and risk-free decisions. You have to shrink your big idea to a Minimum Viable Product and expose it to the market to verify it in a real-world environment and make sure it has real demand.
According to Steve Blank, the reason that so many new businesses fail is that their work is based solely on their assumptions.
A blind rush
Many startups skip the validation phase for one or more of the following reasons:
- They’re certain that people will pay for their products.
- They are confident they know what their customers want.
- They rush through the process because they are overly anxious to launch the product as quickly as possible.
- They don’t know how to validate.
- They don’t want their idea to fail at the validation stage, so simply never validate it.
Benefits of product validation:
- Saving time and money
- Risk-free product development
- Accelerated delivery
- The fastest way to test your assumptions
- Brand awareness
- Validation is your reality check
Test the water
The process of product validation includes the following:
1. Define a problem
This is one of the most critical stages of your product discovery process. Your product or service should be able to resolve a real, existing problem. It should fill a real gap. Therefore, you should accurately define and name the problem or problems you plan to address. These are your business opportunities. What pain are you going to cure? Is it a problem worth solving?
2. Vision statement
Articulate your unique value proposition. Name your assumptions and obstacles. What does your solution do? How is it going to cure the pain of potential customers? What is your minimum success criteria? As in any product management activity, start by defining your goals. Be sure to carefully pick the right criteria and key metrics.
3. Market validation
How is your product going to cure the pain points of its potential customers? You need to make sure that there is a market for your idea. Determine your total market potential. Use industry reports, use Google Trends. Remember, it’s better to search for holes in an existing market than to look for a new one. This will provide you with the possibility to learn from others’ mistakes.
Do your homework and find similar products that are already on the market. The presence of decent competitors is already a form of validation. This proves that people are willing to pay for similar products or services.
Start small. Define an exclusive killer feature of your product or a single service that releases the pain of potential customers. Don’t get distracted into planning many lines of the product, or elaborating on the distribution channels. Now is not the right time to arrange world domination. Focus your money, resources, and attention on one thing. You will have plenty of time to refine the details later.
6. Customer validation
Find out who your prospective customers are and where their natural habitat is. When you are ideating a product or service, think about who you’re going to serve. Do qualitative customer research and slip into your potential customers’ shoes. Immerse yourself in the roles of your customers, find out more about their lifestyle, buying habits and specific preferences.
What core features are you going to include in your product? How do they work? What do they do? Create an interactive and clickable version of your app to demonstrate how it will work. Interact with your functional prototype.
8. Build an MVP (Minimum Viable Product)
The smallest thing you can build that lets you quickly make it around the build/measure/learn loop.Eric Ries, the author of Lean Startup about MVP
An MVP is a piece of software with just one killer feature or a group of enough functions that the product can go to market and satisfy the first customers. This is the rudimentary stage on the way to a fully-fledged application. An MVP is a safe way of performing initial product development.
The key to good interviewing is involving an appropriate audience. Asking your colleagues, family and friends will bring you a lot of “It sounds great!” answers, but it’s not the most reliable source of constructive feedback. Don’t rely on just your focus group either – the more opinions you collect the better. Ask open questions, listen to what people say, to their stories, and look at what they do with your product.
10. Landing page
Make different versions of the landing page to see which one performs better (A/B test). Include a proper marketing funnel, a strong call-to-action, and start collecting email addresses of people that are interested in your product idea. Include a demo of your product. In addition, include a price page and a signup page to convert traffic into potential customers.
Crowdfunding platforms can be invaluable in the validation process, as they prove the market demand (people commit to pay money when the product is released, or even up-front, depending on the platform), and help to establish rapport with future customers. As a result of these indicators, these platforms can also help to raise investor funding.
12. Iterate or exit
Nobody wants to wash money and resources down the drain for a product nobody wants to buy. That’s why it’s crucial to validate the product before spending a single penny. Before you start, you absolutely need to get feedback from others. Product validation is done solely to minimize the risk of implementing a costly but worthless idea.
Carry out your research carefully, find out about the crucial players in the market, rigorously go through a customer validation process. This will ensure your product has the right tone of voice, has the proper design language and adequate pricing, as well as an appropriate marketing strategy.
An MVP helps quickly validate the feasibility of your startup idea with the least effort and minimum amount of resources and ensures the product is well received before paying out more money for development.
Remember the key point – being wrong about a product idea is completely fine, and the sooner you realise it’s wrong, the better.