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:
- Why product validation matters
- Product validation for different industries and products
- 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
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.
Product validation for different industries and products
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 companies are wise to validate their products using competitor research, SEO keyphrase research, and market research.
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
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:
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.
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.
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.
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.
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:
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.
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.
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.
That’s what’s so great about a smoke test landing page…. You can test not only the concept, but also yourself.