You put in months and years of hard work and a substantial amount of resources to build a product. But soon after you launch it, you realize that it doesn't have a market or its potential customers aren't willing to pay for it. Now, considering the investments you've made, you are afraid to give up, so you continue putting more money into it. But still, you fail to generate enough revenue to even survive and get stuck in the loop.
Sounds miserable.
Isn't it?
According to a study, 56% of businesses fail due to a lack of product idea-market fit. This is why you need to validate your idea and see if people will be willing to adopt it before you execute it.
Here's how the idea validation process goes:
1. Validate the problem
Does the problem really exist? Is it worth solving? Would people find the solution appealing enough to improve their lives? Do they already have a solution for it in the market? Interview and learn about their compensating behaviors.
2. Validate the market
Does a market already exist for the kind of product you're building? What is your market opportunity? Is it big enough to build a profitable business?
3. Validate your value proposition
How does your product differ from the already-existing products? Are your positioning and messaging effective enough to outshine your competitors? Test them out.
4. Validate people's willingness to pay for your value proposition
You know there's a market that finds your product appealing. But are people really willing to pay for it? Get assurance.
5. Validate your product
Should you really invest your time & money in building the product? Is it viable for the market? You might want to test out with an MVP first.
6. Validate your customers
Can you build a repeatable sales model out of your product? Will the customers be willing to stick to your product? Learn about its flaws early and iterate.
And in this article, we've elaborated on the idea validation process through which you'll be able to determine whether your idea is worth investing your time & money in – quickly & cheaply.
So, are you ready to boost your chances of succeeding in the market? Dive deep in.
What is Idea Validation?
Idea validation is the process of gathering evidence and learnings around business ideas through experimentation and user testing in order to make faster, informed, de-risked decisions. Its purpose is to ensure that an idea is worth executing by exposing it to the real world and checking its practicality before releasing the final product.
Although a time-consuming process, idea validation can help save a huge amount of time and money that you might put into building something nobody wants.
Why is Idea Validation Important?
Idea validation is an important step to ensure your idea or product solves a real-world problem and can fulfill its intended purpose before it is launched in the market. Below are some of the ways idea validation helps you:
- Saves time & effort: A new idea may contain some unpredictable elements or involve risks that can destroy your plans if they lack enough research. In the absence of idea validation, a significant amount of time and resources may be wasted on developing and distributing a product that no one is willing to pay for.
- Reduces risk: Idea validation is a smart approach that can reduce risk, minimize costs, and speed up the development and delivery of a product in the market. It may be a bad idea to build a solution before conducting enough research to understand the market.
- Aids execution: A good idea may terribly fail if it lacks execution. Similarly, a bad idea, about which people may be skeptical at first, may turn out successful if adequate research is conducted to understand how to go about it. For instance, Airbnb, about which people were skeptical at first, turned out to be successful. On the other hand, Google Glass, being a good idea, failed miserably because of its poor marketing, high pricing, and unattractive value.
- Tests timing: An idea can also be validated to see if the timing for its launch is right and whether you can deliver the product efficiently.
- Helps get the first few customers: During the validation process, you come across your first few real customers who pay you for your product while also giving you honest feedback and helping you improve.
How to Validate Your Startup Idea: The Idea Validation Process
For a product or industry with high uncertainty and risk, idea validation may be a non-negotiable step. An idea can be validated in different ways or steps depending on its nature. However, below is an ideal process for idea validation for a successful launch:
Step 1: Validate the Problem
When you come across an idea, the very first thing you need to do is to see if that solves any real-world problem. Your business idea should be a solution to something people are facing or struggling with. So, ask yourself: My idea is a solution to WHAT? Define and validate the problem you're going to solve. Now, this isn't enough. You need to see whether the problem is big enough to be solved. This can be done by connecting with more people and learning about how it affects them.
So, here's how to go about it:
1.1. See whether it is a new market category or if a market already exists for the product
If it does exist, you'd you won't have to explain to them why they need the product. However, in this case, your competition already exists, and hence you'll have to find a unique value proposition to stand out for them and build a business.
In the absence of a market, you'll have to create the market for your innovation-category product. And hence, you also need to educate the customers, but the growth potential is huge in this case.
Research on Google and use tools like Google Trends and Semrush to search for related terms and find out whether the competition exists. And, if it does, how are they performing? Are they successful? Note it down.
1.2. Interview people from your target audience
Look for places where they hang around and observe them. Be a part of niche-specific communities on Reddit, Telegram, Slack, and Facebook. Help them by answering their queries, DMing them and asking questions, and getting their feedback. You can also incentivize the interviews by offering them basic versions of your product, offer discounts, or gift vouchers.
1.3. Confirm your assumptions from the experts
Find industry experts via social media outreach (Twitter or LinkedIn preferably) and involve them in your research. You may consider using a LinkedIn scraper to identify and connect with relevant industry experts who can provide valuable insights and guidance.. Ask questions that help you understand whether your assumptions were correct or not. And then, towards the end, introduce your idea to understand their perspective and if they can help you amplify it.
1.4. Last, see what do they do at present to solve their problems
How do they make up for it even if they don't invest in a solution? That compensating behavior (their current solution) may be your competition too. This is because you'll have to convince them why your product is a better solution to their needs over their compensating behaviors.
If you're interested in a detailed guide to help you validate the problem, check out this blog: Problem Validation: 5 Simple Ways To Validate Your Customers' Pain Points Based On Evidence
Step 2: Validate the Market
Understanding your market or exact target audience is extremely important once you know you have a problem to solve. Define and identify the different customer segments to solve a problem and validate the opportunity.
For this, you need to start by calculating the market size:
- TAM (Total Available Market): It determines the total demand for a product in the global market.
- SAM (Serviceable Available Market): It is the TAM segment targeted by your products and services, which is within your geographical reach.
- SOM (Serviceable Obtainable Market): You can calculate the opportunity size by multiplying the serviceable obtainable market by the average sale. See if this is big (scalable) enough to go ahead with your idea.
How To Conduct Market Validation? In 6 Simple Steps:
- Identify Your Target Audience
- Analyze Your Competitors
- Conduct Market Research
- Test Your Product
- Analyze the Results
- Adjust Your Strategy
If you're interested in a detailed guide to help you validate the market, along with proven methodologies, best practices, tips & tricks, check out this blog: Market Validation: All You Need to Know to Validate Your Target Market and Launch with Confidence
Step 3: Validate Your Value Proposition
After you have validated the market and before you validate people's willingness to pay, it is time to think about your value proposition. List the unique features of your products and the most powerful pains of your customers to understand the desired outcomes and validate them.
Ensure the following things about your value proposition:
- It solves the pain points of your target audience
- It is exciting enough for the customers and industry experts to help you spread it.
- It is different from your competitors
- It is clearly defined and feasible
- It can beat the competition
To validate your overall value proposition, you need to validate your product concept + message testing separately, as they both need to be on point.
Validate Your Concept
The process of confirming or verifying the authenticity and relevance of a concept, idea, or product is known as concept validation. This involves gathering feedback from the customers and stakeholders to ensure that the product you are offering solves their needs. Now based on the provided feedback on the concept, make decisions on which concepts are worth pursuing and which aren't. Now develop different user scenarios to easily communicate it to others and gain their feedback.
You can learn more about it here: Concept Validation: How to Validate Your Product Concept in 5 Steps [with Free Bonus Tips & Resources]
Validate Your Messaging
Merely testing your product concept might not be enough to outshine the competitors. You also need to test the effectiveness of your copy or message in the market. This is where message testing comes in. Message testing is a type of research that studies how the audience responds to a brand's messaging and helps determine the one that brings the most leads or sales.
To test your message, you can conduct interviews or send surveys with close-ended and/or open-ended questions or practice A/B testing. You can also use numerous tools that help you understand the effectiveness of a message.
To dive in deep, we strongly recommend reading this: Message Testing: How to Conduct, Proven Methods, Tool Recommendations & Best Practices
Step 4: Validate Willingness to Pay for Your Value Proposition
After validating your value proposition (concept+message), it's time to test out whether customers out there are actually willing to pay for your product. Price testing can be done in two steps:
- By defining your revenue streams or your sources of income.
- By collecting evidence for the strong willingness of your audience to pay for your product.
You can go for one-time payments like sales or recurring payment models such as memberships, subscriptions, licensing, usage fees, renting, etc., based on your industry type.
Next, ensure that your customers are willing to pay for it before you invest a lot of time in developing it. This can be done by opening web pre-booking, advance sales, crowdfunding, signing contracts, using marketplaces, and more.
Note: Do not fall in love with your idea so much that even if the customers aren't willing to accept it, you still create the same. At this stage, you can create a landing page, list your value propositions and use Hotjar's heatmap to see what part of it interests the customers – the most. You may create something even better by iterating your value propositions accordingly.
To learn about these steps in detail, our guide on price testing is a must-read: Price Testing: Why it Matters, Proven Methods & 6 Surefire Ways to Validate Willingness-to-Pay
Step 5: Validate Your Product
Next comes another non-skippable step in the idea validation journey. This is the step where you actually validate whether your product is viable and fits the market before investing a lot of your time, money, and resources in its development.
You can soft-validate your product by conducting research and looking at the search volumes, conducting interviews and polls, looking at the competitors, launching crowdfunding campaigns, and accepting pre-orders to find out its actual demand.
Furthermore, you can validate your product in 5 simple steps.
- Define your target audience and product features,
- Analyze your competition
- Gather feedback from customers
- Validate its technical feasibility
- Building an MVP to test it out in the real market and re-iterate, as needed.
To learn about product validation in detail and the tools you can use to make your job easier, read this: Product Validation: Why It Matters, Step-by-Step Action Plan, Free Tools & Resources
Step 6: Validate Your Customer
Here comes the final-most stage of our idea validation journey – customer validation. This involves establishing a repeatable sales model by reviewing the flaws of the product in the early development stage.
To go forward with it, follow the given steps:
- Get ready to sell by developing an MVP based on the insights you already have
- Get it out and test it with real customers or early evangelists
- Develop your positioning based on the feedback you receive in step-2, and metrics
- Make a decision regarding the launch of your final product based on the above, and re-iterate your product until needed.
Validate Your Go-To-Market Strategy
Now is when you need to validate your go-to-market strategy. Here's what all it entails:
- Establishing relationships with people to keep word of mouth about your product moving up in the ecosystem.
- Identifying a potential go-to-market channel to reach your target customers.
- Ensuring your target customers are within your geographical reach and away from all kinds of barriers.
- Establishing early connections to drive mass sales in a short-term period.
- Acquiring an agreement with your consultants to promote your product among their audience.
- Influencing people to talk or share about your product without outreaching them.
To understand the customer validation process in detail, you can go through our guide: Customer Validation: Guide To Validate Your Customer Base, Along with a Suitable Go-To-Market Strategy
Before You Go
Idea validation is a process that enables you to test out your idea in the real world to understand its practicality. By validating your idea early on, you can save a lot of your time and money that you may end up spending on developing products that don't have demand in the market. The idea validation process involves certain stages that start with validating the problem and end with validating the customer. Going through this entire validation journey sincerely can significantly improve the chances of your product's success, although it won't guarantee it.
Furthermore, we hope our idea validation guide and the sub-guides for all of its stages were enough to help you out with the process. But if you feel you need more resources to explore deeper, here are some really helpful ones:
- New Founder's Guide to Testing and Validating Digital Product Ideas
- Idea Validation Process: How to Validate Your Idea in Practice
- What is an Idea Validation, and Why Is It a Must-Do Step for Any Startup Founder?
- A Guide To B2B Idea Validation
- Step-by-step Product Validation Guide: Do You Have The Right Product Or Idea?
- How to Validate a Product: A Guide for Successful Product Validation
Now, time to answer some of your most common questions on idea validation:
What is idea validation in business?
Idea validation is a process of exposing a business idea to the real world to test out its relevance and feasibility in the market before starting to develop a product. It can significantly help reduce the risk.
What is the purpose of idea validation?
The purpose of idea validation is to see if there is enough demand for your business idea to make it worthwhile to pursue. This includes researching the existing market to discover whether there is a need that your competitors aren't filling and determining whether consumers are willing to spend money on your business idea.
What are the steps in validating an idea?
The 6 steps involved in validating an idea include:
- Validate the problem
- Validate the market
- Validate the value proposition (concept + message)
- Validate the willingness to pay
- Validate the product
- Validate the customer
How can I validate my idea online?
You can conduct online research, use relevant tools, conduct surveys and reach out to people directly to get their feedback and validate your idea online. With the constantly-growing technological advancements, it is not a challenging task to conduct idea validation.
Are there any platforms or websites online to validate business ideas?
While there are specific tools to conduct crowdfunding, find a mentor, get ideas for a brand name, and interview people online, social media platforms like Reddit, Facebook, Slack, etc. are enough to help you achieve it. You can join relevant communities on these platforms and network with people to seek their feedback.
How effective is a landing page for idea validation?
A landing page plays an important part in showcasing your value proposition and generating pre-launch & advance sales for your product. However, you don't need to invest a lot in developing one at an early stage. Using no-code tools like Webflow, Bubble, WordPress, etc., can serve the purpose.
How many people do you need to validate your idea?
There's no fixed answer to "how many people you need to validate your idea." Get as many as you can. Focus on gathering honest and detailed feedback. But try to find at least 30 people. You may also consider turning to startup consulting — a couple of sessions with a seasoned expert can help with your survey questions, refining your idea, accurately calculating costs, and resolving targeted issues.
What challenges do you face around idea validation?
Certain challenges which you might encounter around idea validation include:
- You might not find the right target audience who'd show interest in being a part of the process.
- Your own biases or that of the audience may not give you accurate responses & results.
- It is a time-taking process and does require a certain amount of funds that you may not be willing to invest in.
Written by Aastha Kochar, a freelance writer at Shnoco.
