Market validation is the process where the demand for your product (or service) in your target market is assessed. Every business should go through a validation phase before rushing into more time, spending, or planning.
Believe us, we totally understand the excitement of starting a new business or launching a new product. You just want to push the “launch” button and have the waiting be over. You want real customers! You don’t want to plan and build in a bubble anymore.
If you conduct market validation correctly, it can be like having a crystal ball. You’ll be much more certain about whether your customers will pay for your product or service. And that means once you finally leave your bubble, customers will actually care!
On the other hand, if you skip this critical step, you may end up spending valuable time and money building and marketing a product that no one will truly care about.
How To Conduct Market Validation
Determining market validation can be done in many ways, depending on the industry you’re in and what your target audience might be. What we’ve outlined below is the most straightforward way to get the job done, without spending inordinate amounts of time on it.
1. Make a plan
Every business, product, or service should start with a plan. That plan can take on many different forms, but it will usually outline goals, values, assumptions, ideas, problems to solve, and more. Outline the assumptions you’re making about pricing, about your customer, and about what makes your product better than others in your market.
Once you have a real plan in place, you’ll have thought through many considerations that never even crossed your mind until now. You’re in a much better position to begin researching your new market.
2. Do your research
Market research comes in many forms, but the goal of your research should always be the same – to understand the full market opportunity and competition.
Every market is different, but we recommend researching the size of the market, the existing competitors (get specific, like trying to deduce how much revenue they bring in yearly), monthly search volume for keywords related to your product or service, current market trends, etc. Go as deep and as wide as you possibly can.
The more research you do, the better off you’ll be once you’re ready to ask questions to real people in your target audience.
3. Survey real people
You’ve likely heard the advice that you should talk to your customers. You may be thinking, “I haven’t launched yet, so how can I talk to my customers?”
It’s simple. You need to talk to the type of person that you want to become a customer. This is a crucial piece of market validation that too many people skip. Many people don’t know where to find the right people to talk to, how to reach out, or what questions to ask.
At PeopleFish, we do most of the heavy lifting for you. We find the perfect people within your target market for you, so you can just focus on asking the right questions.
What are the right questions? We wrote a longer article on what kinds of survey questions to ask and what not to ask. It will help you understand how to avoid leading questions, closed questions, sneaky questions, and several other common mistakes people make.
As a rule of thumb, focus on truly understanding the target customer and gradually discovering what pains they currently feel.
4. Test your product in the real world
By this point, you should feel reasonably confident about whether your target customers would be interested in your product or service. If your market validation is already yielding poor results, start back at square one with either a new idea (you may have several based on your survey results) or continue iterating on the current one.
If your research has shown that there is enough interest in your product or service already, it’s time to take things to the next level! This is the part you’ve been excited about from the beginning!
You’re ready to start building, testing, and iterating on your product. You’ve done enough research that your product intuition should be much closer in version 1 than it otherwise would have been.
Depending how careful you want to be, you can first run an Alpha with a few people (employees, friends, family, etc). This should help weed out some of the more obvious, yet somehow missed or undiscovered bugs or quirks in your product or service.
After that point, you can run a real Beta. Bring in real customers. Work closely with them to get feedback and iterate quickly to work toward a final launch point. Stay patient and warm with these valuable early customers.
Once you’ve ironed out the remaining critical bugs and feedback, launch your product to the world and begin truly marketing your product or service. Congratulations! You made it through the whole market validation process!
Please Don’t “Just Launch It”
The point is, if you want a healthy business, with customers and fans that really care about what you’re doing, please do NOT skip the market validation phase. You’ll feel less anxiety, have more confidence, and will be able to launch with a good idea of how people will react to what you’ve worked so hard on.
And if you want to do it right, we’ll help you with the most difficult part – surveying real people in your target market.
Our company, PeopleFish, will allow you to drill down all the way into which country, gender, age, and income groups your target audience is in. You’ll be able to ask them questions directly to get data-driven insights to validate your product or service’s market potential.
We’ve already helped 1,000+ companies survey MILLIONS of real people! We’d love to show you how we can help!