A big risk of creating a new software product is building something no one wants; something no one will pay for. You could spend a lot of time and cash only to realize some fundamental flaw in the product that prevents it from ever becoming a success.
This problem is especially troubling if you intend to release a product that doesn’t have any equivalents in the market, or a product that intends to disrupt existing markets.
Fortunately, you don’t have to release a product blindly. With product validation, you can confirm whether your product has a chance to be successful. Sadly, many organizations skip this step because it requires resources of its own.
In this article, we’d like to talk about what product validation means and how to do it.
Why you should validate your product
When you develop new products, you’re forced to make a lot of assumptions. If too many of those assumptions are wrong, you’ll end up with a product that no one wants to use or buy. Countless failed products are based on whatever their creators found interesting, rather than a solution to a real problem.
Identifying incorrect assumptions early is the only way to protect yourself. If you catch your bad assumptions early enough, you can pivot to give the product a better chance. Or, in the most extreme cases, you can abandon the product, thereby saving yourself time and money.
Validation is the process of testing those assumptions. It forces you to expose the product to real users to determine if your idea is any good. Ultimately, validation will help you resolve three assumptions:
The problem - Is there a genuine problem customers are facing that needs to be solved?
The market - Are enough customers willing to pay for the product?
The product - Does the product actually address the problem?
Image: Mind the Product
You may think you have a great idea or great technology, but self-validation is flawed. You can’t rely on your own intuition, even if you’re familiar with the market, industry, or customer. You will always be too close to your own product to think objectively about it.
Validation is especially important if you intend to raise VC money. Venture capitalists want as much information as possible that shows the product will be successful and that their investment is safe in your hands. If you can show evidence of validation to investors, you’ll get better reactions and (possibly) a better deal.
Software validation vs. verification
SaaS software validation and verification are interrelated processes crucial for successful product development. Software validation involves verifying that your SaaS product can meet user needs and expectations. The process requires performing tests that prove your software works well for real users to deliver value.
On the other hand, software verification involves verifying that you’ve built your SaaS product correctly and according to the stated product design and specifications. The process requires performing product reviews, inspections, walkthroughs, and tests throughout development. Without such checks, it’ll take longer for product teams to identify and fix errors. Skipping product verification also increases the risk of launching bug-ridden software.
In summary, SaaS software validation and verification help product teams deliver defect-free finished products. Such software is more reliable, functional, and capable of satisfying user needs and expectations.
4 software validation examples
Here are three successful companies that have used software validation to their advantage.
Tope Awotona, founder of Calendly, validated his product idea through problem-solving. He started by first identifying a continuous problem affecting him and many others. The problem was he needed a more efficient way to coordinate and schedule online meetings and appointments. Since he couldn’t find a solution that satisfied his needs, he created one – a product that automates scheduling meetings for times that work for all attendees.
In essence, he validated his idea by identifying a problem that multiple workers and businesspeople were experiencing. Awotana then came up with a solution that solved that problem better than competitors, giving him a product that delivers value by satisfying user needs. Once he knew he had a product idea the market needed, he began product development.
Slack helps businesses and teams with internal communication. Even though the founders, Stewart Butterfield and Cal Henderson, knew they had a winning product idea, they didn’t jump into development without first validating their idea. Butterfield’s team validated the idea for Slack with a combination of prototyping and user testing.
They accomplished this by building an initial prototype used only by the Slack team. Once they ironed out the bugs in that prototype, they invited other teams to use the prototype. Butterfield’s team then used feedback from the users to improve their product idea and continuously iterate until they had a software version they could launch.
The team’s painstaking validation process helped them confirm that their product idea was worth building. It also generated buzz through word-of-mouth, helping Slack get 15,000 users within two weeks of inviting people to try the software.
Drew Houston, founder of Dropbox, validated his product idea with a much simpler and inexpensive tactic – Pre-selling. Houston created a minimum viable product (MVP) and a video explaining how the MVP worked for file saving and synchronization. He posted the explainer video on Hacker News with a link for users to join the waiting list for the private beta.
Houston’s goal with the MVP and pre-sale was to gauge user interest in his product idea. A high number of people joining the waiting list would indicate there was a market interested in using his product. And that’s exactly what happened, with up to 75,000 people joining the waiting list within days. The show of interest was the green light Houston needed to start developing Dropbox.
Lastly, we have Uber. The ride-hailing app validated its product idea by building an MVP to conduct market research. The MVP was a barebones app that only San Francisco drivers and riders could use.
Releasing the MVP helped Uber research the market and identify if there was sufficient consumer demand and labor force to achieve their business goals. The market research proved fruitful by showing drivers had an interest in making money during downtime. It also showed that riders liked the convenience of hailing a cab from the convenience of their phones. The combination validated Uber’s product idea, giving them the green light to flesh out their app and launch their product in other locations.
How to validate a software product
Remember, validating a product means determining if there’s a problem to be solved, if there’s a market big enough to support the product, and whether the product addresses the problem. You should resolve all three assumptions before starting development.
There are plenty of validation strategies that will help you understand those assumptions, but only four that are impactful.
Step 1: Talk about your idea openly
One of the biggest mistakes product creators make is to keep their idea to themselves. Being secretive deprives yourself of valuable feedback and blinds you to those early roadblocks that other people can see clearly.
For instance, let’s say you have an idea for a social media app. Your first validation step is to speak to someone who knows the space well. This could be someone who works in social media tech, a social media marketing agency, or the owner of similar SaaS. There’s a good chance one of these people can explain some challenges you might face.
Share your idea with everyone. Ask them questions. If someone tells you the idea is stupid, don’t dismiss them. Instead, find out why. Use their feedback to refine your idea. The more you share it, the better it will become.
Step 2: Find and explore similar products
Many people think it’s best to have no competition, but that’s not quite accurate. Existing products that address the same problem as your idea mean someone has already spent the time and money to validate your four big assumptions.
Furthermore, similar products give you an opportunity to study what they’re doing right and what can be improved. If you’re developing a CRM SaaS, for instance, you could look through the complaints people make about your competitor’s products to find ways to create an advantage.
If you can’t find any products similar to yours (addressing the same problem), that could be a sign that there’s no market for your product.
Step 3: Setup a landing page and waiting list
Your next step is to resolve those assumptions by finding real users. “Uh, my product doesn’t exist yet,” you’re probably thinking. “How do I get users?”
It works like this: You build a landing page (or a whole website, if you have the resources) devoted to your product, including a “sign up” button. When they click the button, you tell them that the product is in closed beta right now, but you’re happy to add them to the waiting list.
For instance, trading app Robinhood created a simple landing page for their product before it was available. Email subscribers were used to evaluate interest and create a ready-to-go audience for launch day.
If you already have an audience (traffic to your website, a social media following, email subscribers, etc.), you can ask them to sign up to the “new product’s” waitlist. But if you don’t have an existing audience, you’ll have to pay to bring interested people to your page. Use paid search and Facebook ads to drive traffic to your landing page.
You can use the waitlist to learn more about the audience, their needs, and the market. This is a big opportunity because these people are struggling with the problem so much that they’re willing to click an ad, read a landing page, and sign up for a product that isn’t available yet.
Reach out to these people with email content. Ask them to reply to your questions. Request time to interview them if you can. They will validate whether your upcoming product will be any good and they can help guide your product development. They’ll say things like, “What I’d really like to be able to do is…” or “I wish I could find a product that…” That’s invaluable!
Will people really go so far for a product that isn’t available? Yes, if the problem is painful enough for them. People will offer all kinds of free feedback, advice, and support if they think you’re working on a solution for them. (The whole crowdfunding industry relies on this phenomenon.)
Step 4: Pre-sell the product
The other three steps we mentioned are important, but true validation comes from people actually paying for your idea.
If you don’t think a waitlist is enough validation, consider actually pre-selling the product. Obviously, selling a nonexistent product is much harder than collecting email addresses, but the feedback is more valuable. If a customer is willing to pay money for a product that isn’t available, that’s a pretty good signal that you have a product that addresses a problem and a market that will receive it.
When you pre-sell your product through a landing page or a website, just make it absolutely clear to potential buyers that the product isn't available yet. You could end up with a lot of unhappy people if they expect to start using the product right away.
Alternatively, you can validate your products by reaching out to specific people and organizations who would get the most value from your future product. Explain how you understand their problem and how your product will address it.
Keep in mind that people expect to get something in return for their willingness to pre-buy your product. Sweeten the deal by offering discounted pricing, priority customer service, extra features, or whatever the potential customer finds valuable.
6 options for validating your software product
As we’ve shown in our examples, there’s more than one way to validate software before building. The right validation method to use depends on your product, users, and available resources. Here are the top product validation options used by SaaS teams.
1. Smoke testing
Smoke testing helps verify if you have a feasible product idea – a product that can serve its intended purpose in the real world. The validation process achieves this by identifying issues that may stop a product or feature from performing as desired. The product team will attempt to address the identified issues before investing more time and resources into further testing and development.
For example, if building a health app, you can run a smoke test on the product’s first version or build to identify if people can use it as intended. A successful test will validate your product idea, green-lighting you to continue development.
2. Prototyping and user testing
Validation through prototyping involves building an interactive mockup of your product and allowing users to test drive the prototype. The users will test the product and provide feedback regarding its usability, functionality, and overall user experience. Positive feedback indicates that you have a feasible product idea and can proceed with development.
Prototyping and user testing are also beneficial because they can help identify product ideas or design flaws you can tweak to achieve your desired results. The top SaaS development teams engage in prototyping and user testing throughout the development process. Doing so allows dev teams to leverage customer feedback during development to help build a user-centric product.
3. Market research
Market research is crucial for validating a SaaS product. After all, you intend on penetrating the market with your product. Validating software with market research involves researching your target market, which includes your potential customers, competitors, and market forces. The research will provide insights that will reveal if your product idea is viable and capable of succeeding within your target market.
For example, if your research reveals that competitors have already saturated the market with a product like yours, building the product may not be worthwhile. This is because you already have stiff competition and may not have a strong enough UVP to distinguish yourself. The market research will also reveal if target users have a need for your product. If there’s no demand for your product, you may have trouble convincing people to use it after building and launching.
4. Pre-selling your product
The software pre-sale validation technique involves offering your product to prospects before fully developing and launching it. A large number of prospects swarming and engaging with your offering indicates a healthy demand and a willing market for your product.
Besides Dropbox, a less popular example of a SaaS company pre-selling before development is Simple.ink. Simple.ink used pre-sales to test the viability of their product idea and gather valuable feedback. It also used the tactic to generate initial revenue to fund further development of its product.
Problem-solving is one of the most effective software validation methods. It requires identifying an existing, pressing, and continuing problem you can solve with your product idea. The problem could be one you’ve experienced yourself or heard others mention repeatedly. Identifying such a problem that doesn’t have a satisfactory solution means there is demand for a solution, and your product could be that solution.
After identifying and defining the problem you want to solve, develop a prototype or MVP that solves the issue to the satisfaction of users. Let users test the prototype and collect feedback to verify if your product delivers value by fixing users’ pain points.
6. Landing page or MVP
Build a landing page or simple MVP that showcases your product idea’s unique value proposition. Share the landing page or MVP via email, social media, and other channels to reach as many of your target audience as possible. Also, ensure that the MVP or landing page has a call-to-action that leads users to take your desired action. The desired action may be to sign up, provide email, join a waiting list, and so on.
If the UVP of your MVP or landing page resonates with your target audience, they will take your desired action. The number of people who take your desired action will help you gauge interest and potential demand for your product idea. For instance, a high percentage of visitors following your call-to-action shows significant user interest in your product, validating your software.
There's no method of product validation that's 100% accurate. There will always be people who will promise that they will buy the product, but never do once it's available. You will even run into people who pre-buy the product and then cancel once it's released.
But validation is a key part of the development process. If you skip this, you risk wasting time and effort building a product that nobody wants to buy. It's better to test your assumptions as early as possible so you can pivot or abandon the product if necessary.