Ideas have become a commodity, everyone has had that 1 million dollar idea. The difference between making it successful or not lies behind the execution, market fit, and value proposition. The question is if the idea has legs and would it be something to pursue? Is it a new physical product, platform, app, or feature request from customers, we need to find the validation from the market to make sure if it’s something to pursue further. In this article, we’re going to walk through the process after you have discovered your initial idea, and how to validate it.
Seasoned entrepreneurs, product teams, and designers are constantly hearing ”you need to validate your ideas”
The question is how?
There are many ways to validate ideas, although the quality of feedback may vary on the process you may choose. It’s one thing to sit down with a few friends over a coffee or have a quick call with them to ask if they think your idea is great. The feedback that you will receive will be most likely biased, as they know you, trust you and like you.
For receiving accurate feedback on product validation it’s important to go through the customer discovery process to measure and test assumptions with potential clients and market data.
Why verify product traction before launching it?
Going through the product validation process makes sure that you won’t waste time building something that no one needs or wants. The world is full of dead products that were poorly built, executed, designed, marketed, or didn’t bring any substantial value. When considering 80/20 rule you need to be concentrated on product features that customers will adopt in volume. Especially when you are trying to build sustainable growth and traction.
Another important reason is to study your market and find new insights. When you move too quickly into building a product, you may miss the possibility to spot a growing trend or making a profound discovery about the market.
That’s the reason why it’s necessary to go through a process fully. While collecting quality data, from reputable sources, before making any large investments.
If you already have a business and deciding upon building a new feature.
Here are 7 key questions you would need to ask yourself to validate the initial idea:
- Does this product, feature fits our current road map
- Is this product providing value and helps us to move forward?
- What’s positive and negative about the new feature
- Will it help us or our customers to save money
- Will it improve substantially our customers experience interacting with our business.
- How much will it cost capital (money and time)
- What’s the WHY behind building the product?
Research and Understand the Market
Most successful companies are solving real-life problems or sell products that we deeply desire.
While almost every startup out there has oodles of outstanding product ideas, they some times don’t understand their customers as well.
Most people in tech are excited about leveraging new trends or business models. Without having a basic understanding of who their actual audience is. There’s a popular saying “build a great product and people will come”… well if startups have no clue who their audience is, then it’s hard to scale the product.
The number one reason why startups fail is not having a good enough idea, it’s the timing to market.
Ironically, if founders or product managers are over-focused on the technology itself, instead of building for customers, they might miss the important nuances. Which allows them to leverage emerging technology.
This creates a scenario where they will be guessing what people will truly need in the future. Without key insights, you’re just making assumptions about the market.
Research is the foundation for accumulating key insights about the product-market fit
By thoroughly understanding a problem on the market. having a deep understanding of the research data, you’ll have a better chance of making your ideas and visions reality.
When doing market research, you can easily spend days, months, or even some cases years absorbed in whitepapers and reports. There’s also a point where you need to stop your research and start building if you have already validated the product.
As mentioned before using the 80/20 principle, that helps us to put things into focus. To move fast, you need to focus on the top 20% of resources that bring you in 80 of results, validating if the idea is worth pursuing or not.
A few questions to ask yourself on getting started and having a better understanding of the market
- Who is the target market? (interests, behaviors, demographics)
- What are the problems, needs, and desires in this space?
- How large is the target market?
- Who are the competitors in the space?
- What is the biggest competitor missing?
- What’s the demand for a solution to this problem?
There are numerous solutions to gain insight into this data, you can use online and offline techniques. An effective approach is to conduct a SWOT analysis of the internal and external issues involving the market and product.
One of the most efficient ways to get great results is by researching online marketing channels. Social media platforms provide an immense amount of data where potential customers are already spending time.
One of the fastest ways to gain insight into your target audience is by using advertising tools like Facebook’s Audience Insights or Google’s Keyword Planner. This way you can identify market opportunity based on targeting options and search traffic.
Here are key resources to get your research started:
- Facebook: examine audience insights
- Google: search google trends for growing trends, set up google ads, to discover keywords and find how much is some keyword searched.
- Quora: https://www.quora.com/
- Pinterest: create a business account on Pinterest and you can research how many times some topics are searched for.
- Twitter: follow hashtags, identify discussions around similar products
- Amazon: Research similar product reviews, identify problems and how customers are responding to the product
- News: Research large media outlets to find similar data about your industry
- Statistics & Reports: http://www.statista.com, http://www.bain.com, http://www.mckinsey.com
- Government Data: https://www.census.gov, http://www.bls.gov, http://www.commerce.gov
While this might be an uncomfortable option for most people, but hear me out. You can also talk to your customers, yes talk to YOUR customers…
While Airbnb was still in Y-combinator, they got great feedback. Going to give a short version here…
They were asked, why don’t you visit your customers face to face while you’re small enough. Go to new york where your clients are and talk to them. So they did, they visited their customers’ and stayed at their places. This allowed them to get deep insights into their own company and how they could improve their product, customer service, and company.
How to create customer personas
When researching a market and talking with customers, sometimes some of us might forget that we are dealing with actual people, who have their own lives. They have their own biases, emotions, personal needs and dreams (Maslow hierarchy). Things aren’t black and white and binary. A good question to ask in this scenario is “What is driving their decisions?” People’s decisions and behaviors are often triggered by different cognitive biases.
Key questions to ask when creating customer personas:
- Problem: what is their number one challenge in the space?
- Demographics: where are they located? what is their age, gender, nationality, belief system?
- Behavior: how do they behave in different environments? with different resources or circumstances?
- Social Engagement: what do they engage with on social platforms?
- Job and Career: What’s their profession and how it might affect decision making.
By doing research and answering those questions, you will have a basic understanding of who you’re building your product for. Remember, you are building a product to solve problems not to create more of them.
Map the Customer Journey
When you have a profound perception of who your customer is, you will soon discover that customers have decision-making patterns, which can be turned into customer journeys. Most customers probably have some sort of solution, is it a service or product, to their problem. Those products and services are used at particular parts on their customer journey to solve their obstacles.
When you’re finding a product-market fit for a new product, it’s important to map your customers’ journeys closely to recognize gaps where your product would fulfill their unmet needs. by doing so you have to look closely at where your product will be used in a consumer journey map, how it improves their lives by solving a real problem.
how to map the customer journey?
Start by compiling a series of user goals and actions into a timeline that will highlight the needs and thoughts of your user’s story.
Use these three points when planning the customer journey
- Describe the ideal customer?
- What are the goals, thoughts, actions, and emotions taking place?
- What are the key conclusions, pain points, and opportunities a new product can address?
Customer journey maps should always be designed to carry business goals and KPIs. Maps that do not align with KPIs will probably not result in relevant insights.
Integrating design thinking to form new ideas
By gaining a deep understanding of your target market, customer personas, and customer journeys, you’ve successfully started the first phase of the process. To understand the consumer who you’re planning to reach. With this foundational understanding, you can then begin to establish growth opportunities for improvement.
Ask the following questions to find growth opportunities:
- Where do the problems exist?
- What are the bottlenecks?
- Where is the attention going?
- Could something new exist?
As you begin to identify the growth opportunities, you can start assessing your current idea.
By getting a better understanding of your market and your customer persona, you can get a better grasp of innovative or creative ways you should rethink the solution.
- What are the different ways to address the problem on the market?
- Does your existing idea, product or feature need to be refined?
- What have competitors missed in addressing their solution?
- what are growth opportunities?
- Does it fit the business model?
Work closely with your team to understand the ways your product or service will complement the business model.
When examining the business model, you can ask key questions to evaluate the value efficiency of the product idea on a scale of 1 to 10, but you cannot use 7.
- Will there be demand on the market for this? Will customers pay for it?
- Will this provide value to our business?
- Are the features desirable to customers?
- How easy is it to sell?
- How often can it be used?
- How could we scale it? How easy would it be to scale it?
- What would stop a customer from using it?
Create a minimal viable product (MVP) or lean value experiment (LVE)
At this point, you should have a strong understanding of the whole process. You have a clear understanding of who’s your ideal customer and how your product or service will solve their unmet needs. Now is the part where the rubber hits the road and you will find out if your idea has traction on the market. Now it’s time to create the mockup, MVP or lean experiment. Depending on the size of the product or feature.
At this point, it should simply be an experiment to verify if people will want to use your service.
The easiest way to test if your product has traction is by setting up a simple landing page with an email collection form for the idea or minimum viable product. The goal is to demonstrate value to a user, with a minimum viable product, before launching a full development. There are numerous tools out there that you can use to build your wireframes and mockups.
After you have created a minimum viable experience, the next step is to promote it to your potential audience that you’re previously defined.
Here’s 3 step process how you can start validating traction to your initial idea:
Step 1. Get cold traffic (people who haven’t heard about your service before) to your landing page.
- Run targeted Facebook and Instagram ads to potential audiences that would benefit from your service. (use facebook business manager, do not boost posts)
- Run Google search ads, targeting keywords, that align with your service.
- Post the idea on Craigslist, Reddit, a Facebook group, Twitter or Quora
- Run targeted LinkedIn ads
Step 2. Engage with people who have shown interest in your MVP
- Send an email with a survey or promotion to the collected list.
- Host a Webinar to promote a Free Trial
Step 3. Analyze the feedback and measure traction
- Set up google analytics
- Use facebook business manager to see how your message and ads were performing (conversion, engagement, CPM, CPC, Relevance score) to your target audience
- Analyze google ads and see how well did they perform.
How to measure and analyze traction
The last piece of a puzzle on validating your MVP is measuring how well did the test perform. This part is one of the most crucial elements of validating the idea. You will have relevant data on how people are responding to your idea and are it something to pursue further.
When you are using Facebook ads, to validate the idea, look for how customers engaged with your ads. Make sure that you are running multiple ad sets that target different audiences and multiple ad creatives. This way you can find your winning target audience. Also, you’ll have probably enough data to validate if the product will be profitable when you are going to scale up your ads budget. Look also into an engagement of the ads, is it something that people are commenting, liking or even sharing with their friends. And most important are people converting from the ad? Are they signing up for your email list?
When you are sending out emails to your leads, are they opening it, engaging with it or even responding to it?
When you have MVP that people can already pay for. This is the biggest validation of all, our customers willing to paying for it? If the answer is yes! then keep going. If not, then get back to the drawing board and figure out if there’s something you can do to improve it or the product isn’t just fit for the current market.
What to do when your product doesn’t get any traction?
You don’t have to be as radical at first like Kevin O’Leary from Shark Tank says, take it behind the barn and shoot it.
That said, make sure that you have set a specific timeline that if the product doesn’t work, when you’re ready to stop the promotion, so you won’t waste money and other resources.
The next step is to analyze the data, feedback, see where you can improve. Is its value proposition, maybe the message is off and it’s not conveying any interest to the target audience. Don’t be romantic to your idea, sometimes you’re just ahead of time. Use the valuable feedback and pivot it to something that people would need.
We all love creating new products, but sometimes we might get carried away especially when we are thinking about it 24/7. This is the place where we have to rely on data and keep everything as lean as possible.
Start the process by doing market research, talk to real users, look at current market trends (also make sure that you aren’t years ahead of the market), map out the customer journey to reveal opportunities for your business.
Study your potential audience so you can create a message that would address their problems, desires, and needs. Like the first pancake will usually come out floppy, the same is usually the case for launching a new idea. Use data that you have accumulated to get a better understanding of the market, learn from your mistakes fast, and improve your product accordingly. At the end of the day the product that provides real value to the customer and is also marketed well, will probably get enough traction, and validation.