Save Your Startup Precious Time and Money Through Early-Stage Product Validation
Everyday new digital products are released. As a product owner, it’s incredibly exciting and rewarding to release something to the world you have worked hard on. But what motivates you to help create it in the first place? Creating value is the foundation of business strategy and with that, you challenge existing solutions and believe you can solve a problem with your new product. A problem that lacks a quality solution currently. It’s your job to put something innovative in the marketplace that makes money.
Many product owners love to assume that all of their assumptions are correct when managing the creation of a new product. They like to assume that not only the problem they are designing to fix exists, but that they are 100% correct in understanding the needs and wants of the customer in regard to the solution. This is incredibly convenient! By this methodology, this means that when creating the product, needing to talk to anyone is useless because you already have all the answers. Intuition can be made for how everything is going to function from the user flows, to the features and even the marketing. But what’s the issue here? If we want to make any money or at least get user growth, we need to design for other people, not just ourselves. As much as we would like to believe, our specific needs and wants are not an accurate depiction of what the market wants. And unless we’re creating something that other people want, our results are doomed in creating a viable, sustaining business.
“When you ASSUME, you make an ASS out of U and ME.”. If we assume the needs and wants of the users during the product development cycle, we are taking an extreme risk when launching a product. It seems almost common sense. Though, a whopping 42% of small businesses fail today because there’s no market for their product or service. It’s the second-biggest reason why businesses today fail. These failing businesses originate from entrepreneurs that assumed what their customer wanted and it wasn’t until after they invested a large amount of time and money that they found out nobody wanted it.
How can we as product owners avoid this? It’s simple. Let’s validate our product ideas with potential customers before investing a ton of time and money into their development. If we find out that those we assumed would like our product don’t, then we can ditch the idea or pivot on our idea until we get the right response. If we initially get a positive response from our assumed market need (which hopefully we do), then we’ll know we are on the right track and can continue to get feedback as we build and invest in the product. In this way, we are essentially de-risking the product by not moving forward until we realize that those we’re designing for want our product with real evidence to back it up. We’re either killing bad ideas fast or gaining proof of concept. Both are wins.
To initially validate your idea (test the needs/wants of the market), you’ll want to have done these two things first:
Define the problem: What problem does your business solve? Have a clear indicator of why you want your product to exist in the first place, along with some initial assumptions of why there’s room for you in the market with everything else out there.
Define your customer segment: Which customer segment is going to find your product most valuable? Attributes to explore could include age, location, career occupation, external desires, or whatever you feel makes sense in terms of your product. Just make sure you’re defining your audience by the attributes that actually matter as they relate to your product. For example, if you’re creating a tool that makes email marketing better, then ethnicity is not important.
The next step is to find people in your customer segment and see if they relate to the problem and show interest in your solution to solve it. It’s important that the results you get from your research are 100% non-biased. You do this by getting responses from people you don’t previously know and by asking them questions that aren’t skewed in your favor (more on this later). If you don’t abide by these rules and are biased in your research, then you will get responses that are non-authentic and intended to make you feel good. Your goal is to get an accurate depiction of what the marketplace actually wants, so you can create the best solution possible (if the need exists).
Conducting research should mean talking to people one-on-one, whether in-person or over the phone. My advice says to not do surveys, at least when initially validating a product for a startup. In my own experiences, the results I’ve gotten from ten one-on-one interviews was better than 150 survey results. The data is just much richer because the interviewees can express themselves more. As I stated, find people that you feel relate to your problem and would potentially use your solution. If you’re creating a social app for pickup sports, then talk to people who play pickup sports. If it’s a marketing automation tool, then message marketing executives on LinkedIn and ask them for 15 minutes of their time to go over a solution they could find value in. As I said above, talk to people you don’t know because if you interview friends or family members (even if they are in your customer segment), they are going to say your product is awesome just to support you.
The interview process:
I’m going to lay out an outline that has helped me be successful in what is referred to as a ‘problem interview’ to determine what my potential customer thinks of my product.
The screener question(s):
The objective here is to determine whether the person you’re about to interview is qualified to talk to you. Especially if you’re approaching people randomly, you need to know if they are the customer you want. You want to weed out the wrong people. For example, with my pickup sports app example, I would ask, “Do you often play pickup sports?” If you’re scheduling conversations beforehand with people, then you might have already done your research on them to determine they’re who you’re looking for. Anyway, after you have verified that they’re the type of person you’re looking for (in your customer segment), you move forward to the next step (below).
Getting a feel for the problem:
Here you ask questions to determine if the problem you’re trying to solve exists. The execution can vary, but personally I like to straight-up ask them if they’re having the same problem my solution intends to solve, without mentioning the product. The problem you present to them should be the one you defined above. Let’s use my hypothetical pickup sports app as an example. I might ask, “Do you currently have trouble finding people to play pickup sports with around the area who you can organize playtimes with?” If they agree, then I’ll ask them what they’re using (if anything) to solve their problem, along with what they dislike and like about each solution. This will give me really good insight and actually determine if what I’m intending to create is needed.
Pitching your value proposition:
The above section is supposed to give context for the solution you are intending to create. Outlining the problem and discussing the pros and cons of existing solutions should pave the way for something new. This is assuming the results are in your favor. If not, then you should stop the interview because the customer doesn’t relate to the problem and therefore probably won’t like your intended solution. If the customer relates to the problem, then you now want to pitch your solution. It’s important here to listen and not sell. There’s a huge difference between saying, “How do you feel about X solution?” and,” X solution is really awesome isn’t it?”. One is asking for honest feedback and the other is asking for dishonest validation, so they don’t make the interviewer feel bad. Describe the solution in a way that allows honest feedback without trying to bias the participant into siding with you. Allow them to give feedback not only on the product itself as it’s already presented, but also what they might like to have added or removed from it.
In the beginning stages of product development, talking to your potential customers is invaluable. Asking them how they relate to the problem you’re trying to solve and if your solution meets their needs will go a long way in launching something with product-market fit. I would conduct as many interviews you can, but at least 10-15 initially. If your target customer likes what you have planned, then awesome. But if you’re realizing the majority don’t, then it’s worth pivoting either on your value proposition or your customer segment. The objective is to launch a product people want, so you can get customers and make money. Any way to alleviate the risk of product development in terms of the time and money commitment should be valued to you as a product owner and feedback from potential customers is how you’ll do that.
After initially validating your product idea, you then need to continually iterate on it based on feedback as you develop it. This article isn’t meant to be a book and cover all those parts, but I’ll most likely go further in-depth on these topics at a later time. Until then, I recommend the books UX Strategy and The Lean Startup for a complete picture of proper startup methodology in the product development stage.
Thanks for reading and I would love to hear your thoughts based on what was written here.