Product validation helps you to be 100% certain that what you’re building has market demand. This can strengthen your commitment to your business while keeping you laser focused on the actions that will get you to market faster.
Without real product validation, you’re essentially throwing resources into a lottery and hoping you hit the jackpot.
In this article, we’ll walk you through:
What is product validation?
Why product validation matters
4 strategies to validate a product idea
17 ways to gather product validation data
The best product validation method for each industry
The lean product validation process
Google’s Design Sprint process
Hiring a company for a Design Sprint
Types of prototyping for software product validation
Methods for feedback and fast validation
How to validate your product before you even prototype it
What is product validation?
Product validation is the process of ensuring there is market demand for a product before investing in manufacturing or development. Established brands and new entrepreneurs alike need to validate products to reduce the business risks of creating something that no one wants to buy. When products fail, it can lead to major profit losses—or even business closure and bankruptcy.
With the stakes so high, it's important to use a variety of product validation strategies, including customer research, competitor research, social media listening, and pre-orders. For digital products like apps and software, prototyping and UX interviews are essential to ensure that users connect with the product concept, find it valuable, and are willing to pay for it.
Some products should be validated on their ability to solve a problem for customers, while others should be validated with marketing interest data to ensure that it meets an emotional or entertainment need.
Why product validation matters
Product validation is a critical first step for building any new product or business. It benefits the entrepreneur, the company, the team, and the customers.
Entrepreneur benefits - Invest money in something that is nearly guaranteed to see a return.
Team/company benefits - Understand the strategic product vision, increase decision maker buy-in, and decrease confusion, disagreements, and unnecessary pivoting.
Customer benefits - Feel understood by the company and get their needs met.
Very few companies and entrepreneurs can be successful without validating their product first.
Companies around the world rely on very distinct processes to ensure that they’re not building what only one person thinks is a good idea. We’re going to review these exact processes in this article so you can model them yourself.
4 popular strategies to validate a product idea
If you're looking to validate a new product, try one (or more) of these smart strategies:
1. Low-fidelity prototyping
Low-fidelity prototyping is an essential product validation strategy for software and apps.
It allows you to discover....
Whether or not it would solve users' problems
If they like it better than their current software or process
If they would switch over to it
What they would be willing to pay
If there are any missing features that it must have in order for them to switch
If there are any missing features that aren’t a dealbreaker, but they would like to have
Here's an example low-fidelity prototype from one of our client projects. This screen is showing an in-progress delivery route. As you can see, the UX layout appears as it would in the final version, but we don't worry about the design in terms of logos, colors, fonts, etc.
2. Smoke test landing page
Creating a landing page before you build your software is known as smoke testing, and it's one of the most effective strategies for SaaS entrepreneurs.
Before Joel Gascoigne built social media scheduling app Buffer, he first created a landing page to pre-sell it. After people clicked to view plans and pricing, , they were then taken to a page that said that the product wasn’t ready for purchase yet. Interested users could then leave their email address to be notified of when the app launched.
This strategy allowed Joel to check that people were actually interested in this product. He could check the amount of traffic to the page and the conversion rate from browser to registrant.
While this strategy is popular in the SaaS world, it can work in any industry.
3. Pre-ordering
If you're launching a new version of an existing product, you might decide to collect real pre-orders. You should only do this if you know you can fulfill these orders. (If you already have a trusted manufacturer, warehousing, and packing and shipping processes in place.)
This is a great form of product validation because you can set a minimum number requirement to help you decide to move forward with the product.
For instance, let's say you expect to get 200 pre-orders from a certain number of social media posts or email blasts. This shouldn't be an arbitrary goal, but rather based on previous success metrics from your marketing campaigns. If you hit that limit, you'll move forward with production and fulfill those orders. If you don't get the reaction you're expecting, then you'll refund those pre-orders with a polite message, cancel the product launch, and consider a different approach.
Here's an example pre-order promotion from fragrance company Riddle. They're adding a brand new fragrance to their product line:
4. Customer research
Sometimes, the above strategies aren't available to you.
Maybe you lack the resources you need to create a concrete product validation test. Or maybe your product idea is so new and different that it’s hard to prototype at this time.
You need information about whether or not you should move forward with the idea. You need to validate the concept in order to invest in the prototype or smoke test.
If that sounds like you, then you should rely on customer research instead.
Start with customer interviews and surveys. Collect the feedback you need.
Then, take it to an investor or potential business partner. Show them that the market interest in your concept and then work on using a prototype, smoke test, or pre-order campaign to truly validate the product.
17 ways to gather product validation data
You can use a variety of methods to vet your product concept before you invest in it.
Here are some of best ways to collect product validation data:
1. Competitor research
See what your competitors are up to. In most cases, a healthy amount of competition means there is plenty of need for a product. If there aren’t a lot of competitors, your idea is either not worth creating or you are very ahead of your time.
You can dig into your competitors’
Corporate financial reports
Social media followings
Number of employees
Use this information to suss out the probable success of your competitors. Then, alter something about the product or target market to carve out your own niche.
2. Customer interviews
Customer interviews are one of the most important product validation techniques. You can find target customers online and reach out to them to request an interview. To increase participation, you might offer a gift card in exchange for their time.
Ask them:
What they like and don’t like about a similar product to yours
What they like and don’t like about your product concept
How much they’d be willing to pay for your product concept
Any changes they’d make and why
3. Surveys
You can also send product research surveys. Create a survey with a tool like SurveyMonkey or Typeform.
Then, build a list of target customers yourself or enlist the help of a market research company to find target customers for you.
The more you’re planning on investing into product development, the more data you’ll want to collect. There’s no right answer, but you’ll probably want to get anywhere from 100 to 1,000 survey submissions.
4. Focus groups
A focus group is a group of target customers that you can chat with to get their opinion on your product. Unlike surveys and interviews, where customers respond to your questions alone, a focus group brings people together to foster open-ended discussions.
This is a great strategy if your product concept isn’t totally nailed down yet. Maybe you’re unsure about how to solve a specific problem, or which direction to take your product. By getting your target customers to discuss these issues with you, you can come to better decisions.
Then, you can use other strategies on this list to validate your unique idea.
5. Pre-orders
When people vote with real money, you know that the product validation data you’re collecting is legit.
Create a simple order form or a well-designed, branded landing page to take pre-orders.
Then, count the number of pre-orders you receive and gauge that amount against how challenging it was to market the landing page and how much you spent on marketing.
6. Email marketing campaigns
Not only can you collect data on the number of pre-orders, but you can also monitor the marketing channels you use to promote your product.
Email marketing is one of the best channels to use when validating a new product. If you already have an audience, you can email them all of the details about your new product--why you’re creating it, what it is, etc.
If this is a completely new venture, you can start building up an email audience through social media and paid advertising.
Collect data on:
Email newsletter opt-in conversion rates
Cost per new email subscriber
Email open rates
Click-through rates
Unsubscribe rates
All of this data will show you how interested your audience is in your product.
If you’re getting a lot of engagement on your emails but not a lot of pre-orders, that could be a sign that your pricing is too high or that your product isn't all that desirable.
7. Social media post engagement
You can also track engagement on your social media posts. Try announcing your new product on your social media channels and see how people react.
Do you get more comments and engagements than your typical content? Or far less?
Are the people leaving comments truly excited or are they just pandering?
Of course, in an of itself, social media post engagement isn’t enough data to decide whether or not to move forward with a product. But it can help provide anecdotal, qualitative data to provide more context to some of these other data sources.
8. Social media polls
You can also poll your audience on social media. Simply create a native poll inside of Twitter or LinkedIn, and see what you audience has to say. You might ask them to vote on a certain product version, name, feature, or color.
9. Social listening
With over a billion people on social media, there's an enormous amount of data being generated every day. Social media contains everything you could want to know about your target audience. What they love. What they hate. What they're willing to buy. But analyzing that data is a ton of work. It's smart to use a combination of manual research and social media intelligence tools to help you process more data in less time.
For instance, StatSocial can be used at every stage of product development. The platform employs advanced algorithms and machine learning techniques to analyze social media data from various platforms, including Twitter, Facebook, Instagram, and LinkedIn, among others. It offers businesses and marketers valuable tools and analytics to understand what their target audience truly wants.
You can also read threads in Reddit and other online forums where consumers leave detailed product reviews, complaints, and ideas.
10. Landing page analytics
As part of your product validation efforts, you can create landing pages for waitlists, email newsletter opt-ins, and product pre-orders.
Your landing page analytics offer a lot of rich data.
Make sure to track:
Conversion rates
Partial conversion rates and funnel drop-off (such as if you collect email addresses on one page and credit card info on the next page)
Time on page
Number of pages per session (if your landing page is hosted on a larger website)
If you use a tool like Hotjar or Mouseflow, you can also monitor heat maps to see how far down people scroll on your page, and which sections they pay the most attention to.
11. Product reviews
Then use that data to know what improvements people want to make. If your audience is telling you to make the handle on your straightening iron longer (for example), then you can just go ahead and make that change without needing to conduct further interviews. On the flip side, if a competitor has gotten very negative feedback on a product idea similar to yours, then you’ll know the concept is not validated and you should do more research and development.
12. Crowdfunding campaigns
Crowdfunding sites like Kickstarter are growing in popularity for good reason.
Entrepreneurs get a way to collect revenue for an idea before investing their own money in bringing it to life.
And consumers can support creative endeavors they care about and receive incentives to do so.
You can create a crowdfunding campaign and use the success (or failure) to help you gauge whether or not this is the right product to develop.
13. User testing
This method is great for digital products like software, apps, games, and online communities.
Testers will interact with the prototype of your product and give unbridled feedback.
You can create and record user testing sessions with UserTesting. This platform is also helpful for finding target users.
During the session, share your software prototype and ask target users to tell you what they think. Give them time to explore the prototype and share their opinions. Don’t guide them or ask questions initially. You want to see if they can figure out the concept on their own.
After they’ve explored your prototype, you can ask questions about whether or not they would buy it and how much they would pay.
Check out our guide to low-fidelity prototyping for a step-by-step process for SaaS product validation.
14. Prototype showcases
While the above method is better suited towards digital products, this method is best for physical products.
You can host a prototype showcase and invite industry experts and target customers to use your product prototype. Make sure to have someone on board with a video recorder so you can later analyze the interactions.
15. Consumer product auctions
You can also host product auctions and have real consumers vote with real money. This is one of the best methods for testing consumer goods.
Partner with an experienced auction host like Veylinx, a company that sets up tests for new launches, product variations, packaging, and pricing. Because consumers place bids with their own money, you get real data on what people actually buy.
16. Community engagement
Building a vibrant community around your product idea can be a game-changer when it comes to gathering valuable insights and validating your concept.
Create a Facebook group, Reddit channel, or other online community to directly engage with your target audience, fostering meaningful discussions about your product. These communities become a goldmine of opinions, preferences, and even potential pain points that users might share openly. By actively participating and listening to the conversations within these spaces, you gain a deeper understanding of your audience's needs and desires. Moreover, a community can serve as an organic feedback loop, where users not only share their thoughts but also interact with each other, providing a more comprehensive perspective on the market. This grassroots approach not only aids in product validation but also cultivates a loyal user base that feels invested in the development process, potentially turning them into early adopters and brand advocates.
17. Events and parties
To announce and share a product before it’s developed. During this event, offer free food, prizes, or experiences that attract your target audience. Collect feedback on the product through one-on-one conversations, surveys, and polls.
This method can also be used for services. For example, a medical spa might host a party as part of their marketing. During the party, they can give free consultations for a new service and gauge how interested people are in this service.
The best product validation method for each industry
Of course, product validation looks very different in every industry. How you validate a L’Oreal lipstick is not the same way that you would validate a productized design service like DesignPickle or a major feature add-on to a software product like ClickUp.
Below, we review some of the nuances for validating different products.
Software and SaaS
Software companies have an equally pressing need to validate products before building them, though for very different reasons than fast-moving consumer goods like spaghetti sauce and soap. With the software niche, the issue isn’t production and distribution, but rather software engineering time.
Hiring software developers is very costly.
Product development can require multiple developers, as well as QA, DevOps, and UX resources. To avoid spending money on building the wrong products and features, SaaS companies will usually prototype their product and conduct user testing.
Even a huge company like Dropbox started with a waitlist.
Ecommerce
Ecommerce companies are wise to validate their products using competitor research, SEO keyphrase research, and market research.
They might even run Google ads to a landing page before creating the product, or create a KickStarter campaign.
Fast-moving consumer goods
Established brands that sell consumer products, on the other hand, use a very different approach to product validation than small ecommerce startups.
They are more likely to conduct very costly market research campaigns in an effort to reduce the waste created by products that don’t sell.
Brands can waste millions of dollars by producing the wrong products.
Veylinx is an innovative company that offers auctions to replace market research. Consumers bid with their own money on products, giving fast moving consumer goods brands real insight into how much customers will pay.
Fast-moving consumer goods brands use these auctions to test:
Product ideas
Product names
Packaging design
Color and style variations
Packaged services
Productized services companies can take a much simpler approach to product validation. These companies don’t have to worry about wasting money upfront, because they don’t have to satisfy the order until after someone has purchased the productized service.
For this reason, these sorts of companies will usually just try to sell a productized service on a landing page or on a phone call.
They will then deliver the service to the client, and they will continue to offer the services which are the most in demand.
For the remainder of this guide, we’ll focus on product validation for SaaS and software specifically. So, if you’re building out a new SaaS product, keep reading for plenty of insights into processes, validation methods, and ways to save money.
The lean product validation process
A lean product validation process means that you are using simple, cost-effective methods to validate your product, and you are eliminating unnecessary building.
Note that this process is tailored more towards B2B businesses.
You need to validate all of these in order. Don’t move onto the next until you’ve validated each one. Why? It will be useless to try to validate profitability before you even consider whether the problem is worth solving.
Problem - First, you need to validate the problem. Is this a big problem? Is it an important problem? You can discover this by interviewing potential customers.
Market - Next, you need to validate the market. Are the potential customers you interviewed the best market for you to enter? Or is there another market that is experiencing this problem in even greater numbers, or with greater intensity?
Product - With these clearly understood, you can begin to validate your product. Below, we’ll explore methods to do this, but the top ways include prototyping and landing page testing.
Profitability - And finally, you can validate the price that a potential customer would pay so that you can roughly calculate whether the product can generate profit for your business. You might also research price points with different markets and niches, to have a better sense of which you should tailor your product for. Which market offers not the highest price point, but the highest potential profit?
Google’s Design Sprint process
Invented at Google by Jake Knapp, the Design Sprint is a 5-day process for very rapidly validating products that were considered for development and investment by Google Ventures.
This 90-second video is a quick dive into the sprint:
Here’s a look at the process in better detail:
1. Understand
The first step is to understand the problem. You do this by creating a map. Hone in on the key parts of the problem, and map out the related areas, stakeholders, and concepts.
Here’s an example of a map we made during a Design Sprint session with one of our clients.
2. Diverge
Next, the team will split up and think of different ideas to solve this problem. It’s helpful to have 2 - 5 different solutions to explore. This way, you can be sure that you’re moving forward with the best solution, not just the first one that came to mind.
When your team breaks out into smaller groups or pairs, you’re more likely to get very different solutions, rather than solutions that are just shades of each other.
3. Decide
Then it’s time to come back together as a larger group and determine which idea to move forward with. You might choose the one that addresses the problem most accurately, or the one which presents the smallest amount of investment required to go to market.
4. Prototype
Next up, it’s time to prototype the solution. For software development, the prototype can look very similar to the end product, but doesn’t actually call upon a server when a user clicks around. It’s essentially the front end separated from the back.
5. Validate
During the validation phase, you’ll conduct user testing with real prospective customers. These should be people who are in the same role or business type as your target customer.
You’ll show the prototype to the users and have them interact with it. Make sure that they know that they are not being tested, the software is being tested. You don’t want users to feel like they are being watched to check their tech prowess. Rather, you want them to feel comfortable stating what they would change about the UX, and what features they would prioritize.
Hiring a company for a Design Sprint
It’s notoriously difficult for a company to run a Design Sprint on their own, which is why many choose to hire a consultant or agency to help them run the prototyping and user testing processes.
Most importantly, an outside eye can offer less biased and more honest feedback than an internal team that’s emotionally invested in a product concept.
DevSquad’s Design Sprint service kicks off with a 2-day in person meeting in our office in Utah, and then completes with a second iteration of a prototype, after getting real user feedback on the first prototype iteration.
“No other company offered me a service like the Design Sprint. I liked the idea that you could get in and hammer out all the details instead of doing 50 conference calls. We were able to distill the product down into something that we could go to market with quickly, instead of getting stuck in development forever trying to make something that has too many parts for initial launch.”
- Tony Davis, Partner at Atlantic Home Mortgage
Types of prototyping
There are two main types of prototyping. The difference is important. Most likely, you’ll do both, but at different stages. You should create a low-fidelity prototype first, get it validated, and then build a high-fidelity version.
High-fidelity prototypes - These prototypes are as realistic as possible. They are very close to what the UX of the MVP of your software product would look like. However, they don’t actually function. The user might be able to click around the menu navigation a bit, but the feature set won’t be completed on the backend.
Low-fidelity prototypes - These prototypes aren’t as realistic. They could be paper drawings, or a PNG mockup or PDF of the UX. They are not clickable, and as such aren’t as effective for user testing. However, they are a money-saving option.
Methods for feedback and fast validation
As you can see, a Design Sprint is an involved process. Perhaps you don’t want to take that on yet?
No worries. You can absolutely validate your software product for a lower initial investment, and then move onto a Design Sprint when you’re ready.
Here are 3 affordable ways to get feedback quickly:
Keyphrase research
This is a super easy idea that you can do for just about any product or niche. Conduct keyphrase research with a free SEO tool like Ubersuggest. How many searches per month are conducted for the shortest tail variation of your concept? How many searches per month are conducted for commonly asked questions and major customer pain points?
You can also look into Google Trends, to see if the topic is trending up or down.
Customer interviews
Before undergoing any investment into product validation, you should exhaust all of your free options. One of the most important things you can do is to interview potential customers.
Find out how they are currently handling what your software product would provide. You might discover that although there isn’t any software on the market, they are very pleased with using spreadsheets and wouldn’t pay for what you want to sell.
Build a “smoke-test” landing page
This is our personal favorite option for entrepreneurs that aren’t quite ready to hire us for a Design Sprint.
Why?
Building a landing page not only validates your product, it also helps you determine how committed you are to not only building your software, but also marketing it.
Let’s take a deeper look at the smoke-test landing page concept.
How to validate your product before you even prototype it
In QA, a smoke test helps determine whether a build is stable or not. When it comes to product validation, a smoke test is essentially a landing page which validates the willingness of potential customers to sign up to your beta launch.
This is more realistic than just asking customers questions, because you can test the conversion rate of traffic to sign up. Of course, you’ll be offering free beta access, so be sure to conduct research into pricing as well. You need to make sure that your target audience is willing to pay for what you offer, instead of only being willing to use it for free.
You can even set up two landing pages: one that is for the free beta, and one that is a waitlist and that clearly advertises the monthly launch price.
Do research to come up with your MVP
Before you build your landing page, you should talk to target customers to learn more about their concerns, and come up with the right product concept. You should also do competitor research to find out what’s on the market.
Create a landing page for your MVP product
When you’ve got a great idea for an MVP, you can then set up a landing page. Here’s an example from our own new software, RaiseIQ, which helps startup entrepreneurs build financial models for their pitch decks.
That’s what’s so great about a smoke test landing page…. You can test not only the concept, but also yourself.
Drive traffic to the landing page to get sign-ups
Next, you’ll need to drive traffic to this landing page. You can use cold email, LinkedIn outbound, LinkedIn inbound, direct mail, cold calling, Google ads, Facebook ads, LinkedIn ads, and other strategies.
Make sure to set up Google Analytics beforehand.
Review the effort to impact ratio
You’ll want to see how many sign ups you got, what you spent to get those sign ups, and what the conversion rate was for different marketing channels.
This will help you estimate the demand and the potential for profitability. While great marketing is important, it’s more challenging to market a bad product. This stage helps you vet the product and ease of marketing.
Consider your real commitment to the product
Not only should you analyze the marketing success of your smoke test, but you should also consider your passion and commitment.
Too often, startup founders get excited about building a new product, but they don’t bring that same passion to marketing and sales.
Are you really ready to bring this product to market?
Is your team the right fit for this idea?
Answer these questions honestly and you’ll save yourself a ton of heartache.
Conclusion
How to validate a product idea?
To validate a product idea, focus on ensuring there is market demand for the product before significant investment in manufacturing or development. This involves using strategies like customer and competitor research, social media listening, prototyping, UX interviews, and pre-orders. Product validation is crucial for reducing the business risks of creating something that lacks market demand, thereby preventing major profit losses or business failure.
That’s what’s so great about a smoke test landing page…. You can test not only the concept, but also yourself.
DevSquad offers MVP strategy and landing page testing as a service. If you want to validate an idea before a Design Sprint, contact us today.
