Step 1 : Test Your Startup Idea
What is market validation? It’s a question I hear a lot, especially when mentoring young entrepreneurs.
Market validation is the process of determining whether your product is of interest to a given target market. Market validation involves a series of customer interviews with people in your target market, and it almost always takes place before you’ve made a significant investment in your product/concept.
Last month, I gave a talk on lean market validation at the opening night of Startup Weekend at the University of California, Santa Barbara. In attendance were 200 eager students and entrepreneurs who wanted to learn how to build a startup in 54 hours. For many first-timers with great ideas, the process is exciting but also a bit intimidating.
The goal for my talk was simple: To layout a few practical tips for entrepreneurs to quickly validate their ideas. I also wanted to help them understand that even first-time entrepreneurs can launch successful products by taking a few easy (and often free) steps.
After using lean market validation to launch several software products, including ProductPlan, I’ve discovered that with the right process even inexperienced entrepreneurs can bring amazing products to market with excited buyers on the first day.
Read the Customer Interview Tool Box ➜
Here are my tips for using lean market validation to confirm whether you have a product/market fit with real customers. By simply engaging with real people and asking the right questions, you can confirm if your idea solves a problem, who your potential buyers are, and ultimately whether or not there’s a market for your product.
1. Write Down Your Product Concept
Just the simple act of writing forces you to consider things you may have previously glossed over. I’m not talking about writing a “business plan.” (For startups, a business plan isn’t the best use of time and will change as soon as you start talking with prospective customers).
I’m talking about answering a few key questions that you can go out and test. These are your assumptions and the sooner you can test them, the less risk you will have when launching your product.
Learn the Anatomy of a Product Launch ➜ You can start with the questions below or use a tool such as the Business Model Canvas to guide your thinking. Write down some basic assumptions that you can go out and test:
Who is your customer? If you say “everyone,” you are already setting yourself up for a tough time. Be sure to get specific. For example, if your customer is businesses, answer: What kind of businesses? How big or small is the typical business? In a particular market? What is the title of the buyer?
What problems are you solving? So many entrepreneurs think about the product first — they fret about the features, launch the product, and then wonder why their product has trouble getting traction. My suggestion is to start with the problem first. What this means is being explicit about the problems your product solves. By writing down these problems, you can validate whether customers also see them as problems. And more importantly, whether customers think they are problems worth solving.
How does your product solve those problems? Only after writing down the problem do you move to the product. From here you tie the value of your product directly back to customer problems. How does solving their problems make their life better? Does it make them more money? Look better?
What are the key features of the product? The features need to be more than cool — they need to solve specific problems. The more quantitative (e.g. time saved, money made), the better. I encourage you to think Minimum Viable Product and limit the feature set as much as possible (you need to provide just enough value for some customers to buy).
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