Validating your business plan is one of the most fundamental aspects of the Product Development process. Entrepreneurs often overlook that only a handful of startup ideas survive their first year.
That normally happens because they didn’t take the time to ensure they built the right product for the right people. Why should you care about implementing a thorough Market Validation Strategy? Because launching a product without doing so can result in costly mistakes.
People tend to think that it takes too much time and money. Regardless of your software product idea, you can often validate it without writing a single line of code. However, you need to design a Market Validation Strategy that fits your business needs depending on the type of product you want to build. Let’s dive deeper into that.
What is a Market Validation Strategy?
You have a business idea you believe is awesome and want to bring it to life. Making sure it provides users with real value is what we call Market Validation. Therefore, your Market Validation plan must focus on the value of your intended product.
A common mistake entrepreneurs often make is focusing too much on the product features and functionalities. So, Market Validation objectives show how likely the idea is to be successful, and the Market Validation Strategy involves how you plan to do that.
Regardless of your industry, designing a strategy that validates your business according to actual demand isn’t rocket science. Let’s walk you through how to conduct your Market Validation Strategy.
How To Conduct Market Validation Strategy?
Your Market Validation Strategy revolves around two major aspects of Product Design: Product Research and Product Testing. That shouldn’t come as a surprise. You start with an idea based on certain assumptions; you must research to fact-check these assumptions.
What kind of hypotheses should you focus on? Anything that tells you whether your product or service is a “nice-to-have” or a “must-have” for your target demographic. Therefore, you should aim your research to fully understand users’ pain points, desires, and needs.
That data will lay the foundation for the first goal of your Market Validation Strategy: Define and narrow your target audience. How can you gather data from that specific audience?
Regardless of the product you want to build, you can use popular market validation methods to provide meaningful data from prospective customers, like forums, groups, LinkedIn outreach, Google Trends, etc. Other methods include online surveys, interviews, social media polls, or questions on Reddit or Quora.
If you have an idea for a revolutionary Productivity App, you can start by determining what your target customers think about the existing ones. Bear in mind that the most meaningful feedback normally comes from in-depth interviews.
Once you have gathered enough customer feedback and significant data from potential users, you want them to use a Prototype as soon as possible to gain valuable insights. A Design Sprint is an effective method to make and test a prototype as quickly as possible.
It’s also important to consider the financial feasibility of the product you want to build. Besides, keep in mind that validating your idea is an iterative process.
Market Validation Strategy Steps
Remember that the following steps can vary depending on your industry, Business Strategy, and target market. Businesses don’t have a unique written-in-stone way to validate their idea. However, a crucial step is to start this step-by-step process with thorough research and finish with something you can put in front of potential customers to test.
What should you consider for your Market Validation Strategy? Research findings, budget, team size, the assumptions you want to validate, and how you want to do it. Startups commonly validate their products with a prototype, a landing page, or a Minimum Viable Product (MVP). Look at an example of how to create a Market Validation Strategy.
1. DGoal. This step normally involves writing down the assumptions you want to validate. Plus, you can also define how you plan to do it. As mentioned above, that could be a prototype or a landing page. Note that you may want to have some level of validation before investing development time in an MVP.
2. Research. You won’t validate your product 100% until you launch it. Researching the competitive landscape will give you your first level of validation, helping you somewhat clear your doubts with actionable insights. Your goal here is to clarify the problem you’re solving and the value your product or service provides. Plan your research initiatives, trying to get as many in-person interviews as possible, taking your budget into account.
3. Prototype. Once you’ve validated some of your assumptions, you want to prototype testing as soon as possible. As mentioned above, you can opt for a basic landing page based on your team and budget. If that’s the case, building an email list and using a CRM to keep track of responses is recommended.
4. Testing. Presenting real users with a usable version of your product will give you more validation. That’s crucial before investing business resources into huge failures. Remember that you will likely have to further research and refine your prototype.
5. Build An MVP (if applicable). Many things can happen in the line that divides before and after launching. That’s why you want to launch ASAP once you're on the right track. If you’ve built an MVP, you know your product solves a problem and can fulfill market demands. Yet, an MVP also requires further Market Validation tests, like Usability Testing, to ensure it provides a decent User Experience (UX).
These steps can vary depending on your product concept and other factors. Consider that the main goal of the Market Validation Strategy is to show Product Managers and Product teams how to reduce exposure to financial risks as much as possible.
Why is Market Validation Strategy Important?
People rarely like to think about things not going their way. As you can imagine, that can lead to potential problems. Finding a market fit without validation is often like spotting a snowflake in a blizzard.
An effective Market Validation of your product strategy will be an essential step to help save you tons of money and time. After running a proper market validation process, you can make data-driven decisions on the right solution to boost your chances of success.
Validating your idea will help you clarify your message and write a killer Value Proposition, which is fundamental to getting a successful product!
Conclusion
The iterative process that goes back and forth between Research and Testing can take a while. Almost no one gets a green light to launch the first time. Refining or tweaking until you get a finished product that works with the best results is common.
A perfect example of this is Amazon: the tech giant that offers Cloud Computing, Machine Learning, Artificial Intelligence, and Internet of Things (IoT) solutions started as a mere bookstore. So don't hesitate on harnessing the power of Market Validation Strategy!
