What is market validation?
Definition of Market Validation
Market validation determines whether or not a product or concept is relevant and appealing to customers through user research. Its purpose is to determine whether a concept is worth further development at the earliest possible point.
Concepts are validated through in-person interviews and digital surveys. What matters most is that this process is carried out with genuine potential end-users. Regardless of which technique, it’s essential to ensure that the questioning is neutral and non-leading and that it takes place at an early stage in the development cycle.
When you collect input from customers during market validation, you will be able to determine whether your product hypotheses are correct and whether there is a need in the marketplace for your solution.
The Importance of Market validation
Many companies are so excited about their new product concept that they bypass the market validation phase and push right into product development to get it to market before another firm does.
However, there might be a valid reason why a rival hasn’t come up with a similar idea yet. It may not have a sufficiently large total addressable market. Most target consumers may consider the product a “nice to have” but not worth paying for. Those users may already have a solution to the problem that does not necessitate the usage of a product. Or perhaps the market has had enough unsuccessful solutions and is now hesitant to attempt a new one.
Market Validation – How To Get Started
Many researchers also find it helpful to start with ‘icebreaker’ questions to get the conversation started. The most important thing to remember is that you don’t want to give away how close to the product you are that you’re testing.
Suppose you make it apparent that you play a critical role in the product development process. In that case, the interviewee may be reluctant to provide honest feedback on any issues or reservations they have regarding the product’s design.
Lastly, it’s advised that the vast majority of the interviews be conducted by a single researcher, such as the product manager, to ensure consistency.
Because the PM is likely to have the most in-depth knowledge of the target user, the market, and other critical data, it is much easier to identify insights when the interviews are not scattered over the entire team. If you have too many interviews for the PM to manage independently, then perhaps divide and conquer between a small group.
Investigate the Data
After completing your market validation interviews (or surveys), the next stage will be to analyze and make sense of the information gathered. It is up to the individual to determine how replies and data give validity. As the owner of an idea, concept, or product, it might be tempting to believe that your opinion, image, or product has been validated when it might not be the case. It’s vital that the analysis is as objective and data-driven as possible and that it attempts to answer specific questions regarding the product, such as:
● Did it solve the original problem?
● Which features of the product are functional and which are not?
● Has the material been presented well and easily understood?
● Did they grasp the concept of functionality?
● Were there any legal, operational, or pricing difficulties that needed to be addressed?
To minimize the possibility of bias, strive to extract as much raw data as possible from your research to support your conclusions.
For example, if many users claimed that the navigation was confusing, how many users complained about this? Do you know what proportion of the sample that represents? Using (anonymous) quotes, can you help me visualize what you’re saying?
If, on the other hand, the feedback has been overwhelmingly favorable, using users verbatim when sharing with stakeholders is a terrific approach to express your gratitude for them.
A thorough collection of market validation quotes and their presentation demonstrates that there has been no prejudice involved and provides a green signal to proceed.
How to Conduct a Market Validation Study
1. Identify and define your target market.
Market validation carried out appropriately will have a substantial impact on product development, particularly in the following areas:
A comprehensive understanding of the market.
Although most businesses have a strong understanding of their target market and customers, it does not guarantee a thorough understanding of each user’s requirements, expectations, and desires.
Early-stage market validation can assist in reducing this risk to a reasonable degree.
It enables organizations to understand a product’s features that might resonate with the end-user and any other crucial insights that will impact positioning and messaging strategies.
Market validation is also an opportunity to test early ideas with your target market in an open environment to determine whether a solution is viable from the user’s perspective.
Last but not least, market validation is critical to avoid wasting money and effort producing the incorrect product. After all, inquiring whether or not an idea will work is significantly less expensive than discovering that it will not function after development.
2. Obtaining Financial Assistance
Whether your product requires internal budget allocation or your start-up is seeking its next round of funding, proof of product-market fit will always be necessary before considering an investment.
The quickest and most cost-effective approach is at the early stages of product development by conducting market validation with real-world end-users.
The outcomes of your market validation approach should clearly illustrate that the pain point you’re addressing is significant enough for your target audience to be willing to pay for a solution to the problem.
When it comes to some research projects, you may require incentives; nonetheless, most people are eager to provide input willingly, so don’t let this deter you if your budget is limited.
3. Create a Questionnaire Free of Bias
Market validation is a worthwhile endeavor if you identify true consumer wants, attitudes, and intentions. The goal or desires of the person conducting the interview, on the other hand, can frequently have a significant impact on responses.
Therefore, you must remove all prejudice from the process by ensuring that all questions are open-ended, unbiased, and pre-planned in advance. The initial few questions should be geared toward understanding why and how interviewees do particular things or act in specific ways rather than offering solutions or suggestions for change. The goal here is to understand the framework in which priorities, challenges, and concerns exist.
Once you’ve gained a basic grasp of the interviewee, you may move on to introducing the product or solution through a series of non-leading questions. The most important thing to remember in this situation is that all interviewers should answer the same set of questions for you to be able to assess the data consistently. That is not to imply that if anything unexpected comes up, you should disregard what the respondent has stated – you should be open to exploring alternative avenues of inquiry but always return to your pre-planned discussion guide.
4. Put Your Question Through its Paces.
It is beneficial to test your interview questions with a small group of people before entering into a complete market validation process (which serves as a mini-market validation in and of itself!).
Not only should you evaluate your interview strategy, but you should also test whether or not your assumptions about the interview were correct during these first few interviews.
If you find that the flow of questioning isn’t quite as natural now that you’re saying it aloud, you may opt to change, eliminate, or add specific questions. For example, an interviewee’s behaviors may prompt you to ask a more appropriate question in reaction to their actions.
You might also think about altering the length of the interview and the location where it takes place.
5. Carry Out the Interview Sessions
As you conduct the interviews, there are some cues you may use to put respondents at ease and introduce them to the interview procedure so that they feel comfortable.
In the first place, consider the person with whom you are conversing. If you want to validate a social media product with teenagers, you might not want to show up in your best suit.
After that, you should schedule some brief time to get to know the interviewee before beginning the actual interview itself. At the absolute least, please introduce yourself and ask them a few questions about their lives and interests.