HOW MARKET RESEARCH CAN VALIDATE YOUR PRODUCT IDEA
When you have an idea for a digital product or service that’s going to change your market, resist the urge to jump right into bringing this idea to life. As a corporate leader, intrapreneur, or entrepreneur, you’re likely steeped in your industry and feel excited and ready to design, wireframe, and iron out all the details. However, this approach skips the product validation process within your market, which is crucial to your success.
The top reason products fail is because the product doesn’t fit the market. This can be true for consumer products, B2B SaaS solutions, mobile apps, and even internal-facing software. To avoid investing in a product that doesn’t suit the market, you need to do your homework. Specifically, start by doing an extensive amount of product validation (also called market validation) before you begin any solution work.
In this presentation featured on the Princeton Academics YouTube channel, Aaron Patzer, founder of Mint.com, says validating your product idea is the first thing you should do. After several failures, Patzer says he did about three or four months of work validating the idea for Mint.com before he wrote a line of code.
By validating your idea against the market, you lower your risk of investing heavily in a product that might fail. Product validation helps to ensure that the stakeholders for whom you’ve developed the product understand the need for it. (If they don’t, you’re toast.) With product validation, the people who have the problem you’re trying solve test your idea and provide feedback. The process helps you determine whether your personal opinions are in sync with your target audience.
Product validation also makes pivoting or adjusting your idea to suit the market is easier. That’s because you won’t have any product debt influencing your decision.
Now that you know why validation is important, I explain how to validate a product in your market. Before you get started, check out this validation board, which is a tool that helps you map your progress through steps I outline below.
STEP 1: DEFINE AND VALIDATE THE PROBLEM
People buy a product when they’re trying to solve a problem. Sometimes, they’re trying to prevent a problem in the future, but most of the time, they need to solve a problem they currently have. So when you think about your idea, first ask, “What problem does this product solve and who’s it solving a problem for?”
To find the answer, you can’t be shy, and you must like to read. To start, perform “voice of the customer” interviews. Reach out to prospective buyers to learn about the problems they experience in their work or day-to-day lives. Don’t lead them. Just ask about their pain points, what takes up their time, and what they wish was easier.
As you listen to people’s responses, make sure you document everything they say by writing it all down. Don’t just listen for things related to your problem.
If your idea is for a business to consumer (B2C) product or service, you can find people to interview while you’re in line at the coffee shop. Offer to buy their drink if they’ll answer a few questions about the problem you’re exploring.
To validate the problem, you also need to research the market size and online footprint. Use the following questions to guide your research:
- Does your target audience spend money to fix this problem today? How much?
- How many people have the problem?
- How does your audience search for this topic online? What’s the volume? Google’s Keyword Planner is a great tool for finding this information.
- Are other companies seeking to solve this problem?
- Who’s writing or producing content about this topic?
- Who’s leading the social media conversation? Do they get a lot of interactions?
- What’s the most popular piece of content written about this topic in the past year? To find this information, we use BuzzSumo.
One of the most common questions is “When will I know if I have a validated problem to solve? When will I know I’ve done enough research?” To answer these questions, look at the data and metrics. Try to build an argument with your findings and be as objective as you can about how the numbers look.
For example, build a slide deck and pitch to a friend or colleague using your research to convince them that there is a big problem here that needs solved. If you can’t convince them, the solution probably isn’t worth building. If you still feel strongly about your idea, identify the gaps in your argument and fill them in with additional research, or consider pivoting slightly.
STEP 2: VALIDATE THE SOLUTION
After you define and validate the problem, you’re ready to revisit your solution. Make sure your end product or service still lines up with your original assumptions. The following questions help you determine whether your original idea works and if not, how you might need to rethink it:
- Does the solution you originally conceptualized solve the problem you defined?
- If so, does your solution solve the problem in way that’s better than how people are solving it today? If not, how might you adjust the solution so that it improves upon already available options?
- Is the solution appropriate? We often hear from people who have real solutions to real problems, but they are the equivalent of replacing all your grass with rocks so that you no longer need to mow the yard. Great, you solved the problem, but now I’m living like the Flintstones.
- Will your solution be easy to adopt without disrupting something else?
STEP 3: CREATE A PROTOTYPE
This is the fun part (and the time I most enjoy with clients). To start creating your first iteration, explore ideas to your now-defied problem by having solution design sessions. When we host these sessions at DeveloperTown, we follow a design sprint process championed by Google.
With these sessions, your goal is to create a “first draft” of your product that you can start testing in the market. To present your solution to prospects, gather data about their reaction, and analyze that data. Pretend this first version is real – to a point. Don’t take anyone’s money, please.
For example, you might create a quick website landing page with a Buy Now or Demo button. If a visitor clicks it, they see a message that says, “Work in progress. Wanna talk?” and asks for their email address.
STEP 4: GATHER FEEDBACK FROM YOUR TARGET AUDIENCE
When you have a prototype, you can gather feedback from people who are interested by asking what made them excited about your new product. To find these people, you can spread the word all sorts of ways.
For example, post on a forum or Reddit about the subject and ask for feedback. You can also promote your prototype to your audience with an ad on Facebook, LinkedIn, or Twitter. Through the promotion, try to collect emails from people who are interested in updates on your product.
To get feedback on software and apps, usability testing is a great tactic. Gather a group of users, watch how they perform tasks you’ve predefined, and get their feedback. To get relevant and important feedback from a user test group, you don’t need 100 people. A group of 7-10 people is fine. If you’re not able to conduct a usability test yourself, a company like UserTesting can help.
STEP 5: REFINE YOUR IDEA BASED ON THE FEEDBACK
This step might be the most important part of the product validation process. Actually listen to the feedback, research, and data you’re collecting and make changes. Don’t be married to your first idea. As disheartening as a change may be, adjust your original idea to incorporate any feedback or new findings after you’ve done your research.
Ignore what you’ve learned, and you risk wasting a lot of time and money. For example, if 4 of the 5 people you interview don’t like your prototype or don’t see what you see as a problem, don’t view them as being wrong, stupid, or misrepresentative. They are trying to tell you something that the market will eventually tell you after you’ve invested much more money: Your product doesn’t fit the market.
The best companies and entrepreneurs we’ve worked with have all made changes to their original vision because of research and feedback during a validation process. They are glad they did.