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Friend or Foe?
Market validation is annoying. Why are you wasting valuable time interviewing people about your proposed business?
Time that could be spent building your product’s killer features and starting to make some serious money? Right?
By Nick Harley
t’s a dilemma a lot of start-ups face. Market validation and
research can be seen as a thorn in the side of many businesses.
Why? Because the majority of this work needs to be done before
and during the initial building of the product - the most exciting time.
Let’s face it, after you have that eureka moment, you start to
contemplate the possibilities of what your product could look like,
how people use it, the money you could make and what colour the
walls of your penthouse office might be painted. The last thing you
really want to be doing is boring market validation.
I fell into this trap with my first business. I didn’t do any market
validation. I built the product first and then dealt with marketing
it, blindly expecting people to use it the way I envisioned and to
want the same things I ‘thought’ they would want. I didn’t ask a
single person what they wanted to see until it was already in the
marketplace. Back then, I don’t think I even knew what market
validation was, how important it is, and why it needs to be done.
This was just one of my many mistakes and lessons learned the
hard way. I built the product for me, but forgot the fact that I am
not the customer.
When you first start developing your idea you get a rush of excitement.
It is seen time and time again with young companies. There is a wave
of activity, hype and ‘coming soon’ enthusiasm. At this point you must
put on the brakes and think about things. If you build this product,
will anyone pay you for it? If not, why bother building it?
Interview people on the street, talk to your friends and family, talk
to business colleagues, carry out online surveys, write blog posts,
do online research and make sure you know everything there is to
know about the trends of your market and who your competitors
are. Collate the information and review it.
Build a prototype, a demo or create some screenshots to
demonstrate how the product will look and feel. You’ll get better
feedback when people can physically see your ideas. Build an MVP
(Minimum Viable Product) and go out, talk to people. You can do
all of this for very little money. If the market isn’t there, listen to it.
Once you have a clear vision and you know there is a
demand, and more importantly, people will pay you for it,
then go ahead and build!
On the flip side, there can be such a thing as ‘too much’
market validation. Business advisory organisations will
always require you to do more and more validating (it’s
part of their job). You can create business plans which
seem to change every week and financial projections
with numbers that are plucked out of thin air, but you’re
never going to really know things with any certainty
until you’re out there in the marketplace.
You’ll always be trying to find out what the mystical
level of market validation is. You can validate your idea
and it’s market until your face turns blue, but there
comes a time when you just have to decide there are
enough indicators to suggest you’ll do ok and get out
there. Build your product, go out and sell it. Get people
touching and feeling your first demo/beta and ask for
feedback on its features, then you’ll be able to refine
your product even further.
And remember, market validation doesn’t stop after
the product is launched. Why develop and support a
new feature that nobody wants or needs? You should
constantly ask your customers for feedback and develop
features that are going to add value.
Before you spend substantial time and money building
your product take some time to complete your market
validation, you’ll be glad you did, but don’t get stuck
in endless market research and never get around to
building it at all.
The trick is find the right balance between the two.
There is no perfect amount. Start doing it and you’ll
know when you’ve done enough and when you’re ready
to start building.
Nick Harley is the editor of NZ Entrepreneur
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