What is Market Validation?
Market validation is testing a product concept in the market conditions that are close to real before the release of the product or even before starting with its implementation. This process involves researching the potential audience to understand if the proposed business idea is viable and if the product can become a success. Market validation can be used to boto test an innovative idea and to ensure that a new feature to an existing product is worth developing
Yet, it differs from market research, because it already aims at winning first real customers and, therefore, at paving the way for future growth. So, a successful validation may result in first pre-orders of the upcoming minimum viable product.
Market Validation Process
There are no strict rules as to conducting market validation, as the process will depend on the product, the industry, and the available resources. However, there is a high-level framework that fits almost all types of market validation and helps ensure that the testing is performed consistently at every step:
Step 1. Write down the working hypothesis. Market validation is all about testing assumptions about the product viability, so it should start with a clear articulation of the hypothesis, or the testing goal.
Step 2. Choose the research method that would fit your product the best.
Step 3. Create the test depending on the method chosen. For example, if you want to conduct a customer survey, write down the questions you are planning to ask and put them through a dry run.
Step 4. Recruit research participants. The first thing to bear in mind is that they need to represent the actual users you are targeting for the product. Besides, you must take into account potential costs related to finding participants and offering them incentives.
Step 5. Run the tests and review the results. Here, it is important to understand that possible failures are also part of a successful testing and in many cases are inevitable.
Market Validation Methods
There exist multiple methods of market validation methods that can be more or less beneficial depending on the product. Some of the most popular include:
- Surveys and interviews. A survey is an effective way to collect a huge volume of responses, while interviews allow going deeper into the participants’ reactions and unveil their real pains and needs.
- Prototyping. A prototype is an interactive visualization of the product that allows testing the basic concept and identifying usability flaws in design and UX.
- Minimum viable product (MVP). An MVP is the basic version of the product that offers value to the user. Unlike a prototype, an MVP focuses on testing features, providing that the basic concept is already proven. It can reveal the level of users’ interest in the product and the way they interact with it in real life. It justifies investing in the product and helps detect the major issues and eliminate them without wasting too much resources.
- SEO. Using search results and Google Trends is an easy and cheap way to gauge the popularity of the chosen industry and the potential interest in your product and even geolocalize results to get further insights into which markets to target.
- A/B testing of online ads. A/B tests of ads that highlight different features of the product can also show which aspects are more promising than others and suggest the areas where to focus and which features can be abandoned.
To wrap it up, market validation is beneficial for a business, since it prevents big product failures and helps justify investment into the product development. It helps businesses understand the market better and avoid targeting imaginary personas instead of real uses.
