Why every startup should focus on validating its product before launch
The early days of launching a startup are often a blur of pitch decks, investor meetings, finding hires, and endless to-do lists. But at this earliest stage, there’s one thing that every founding team should prioritize: Validating its product.
It’s not uncommon for startups to be so focused on product development that they neglect this important step. However, confirming that you are pursuing a product that customers actually want is critical. Product validation not only saves founders time and money on the front-end, but it can also be the difference between building a successful startup and creating one that fails to get the traction it needs.
As part of a recent presentation I gave in Seoul, I underscored why product validation is so important and outlined three steps founders can take to ensure they are building something worthwhile. The event was held at Samsung NEXT’s Alpha Training in partnership with the South Korean government organizations, the Center for Creative Economy & Innovation and TIPS, and was aimed at providing entrepreneurs in that ecosystem with tools to succeed.
The validation imperative
Building products is an expensive endeavor. The validation process helps determine market demand for your product and whether it’s worth the investment to create it. But to get to that point, you first need a truly honest assessment of your idea.
It’s tempting to rely on early feedback from friends and family as a green light for your next product. But the reality is that people who are close to you rarely offer an objective take. In addition, studies show that confirmation bias – that is, the tendency to trust evidence that confirms what you already believe – is also working against you.
Silicon Valley is littered with examples of startups that wasted huge sums of money because they failed to validate their products. For instance, consider Color. This startup raised more than $40 million in 2011 to build a photo-sharing app before Instagram became popular. They thought that adding location data to pictures would spur use.
The founding team spent four months and millions of dollars to build out an app to do just that. Their app promptly flopped, racking up thousands of two-star ratings. The team tried again—still without validation for their idea—and, not surprisingly, flopped again. Ultimately, Color burned through all its funding and eventually went dark.
Even if a company has a good idea, the timing might not be right to implement it. One early Internet startup, Webvan, lasted just five years. While the company was ahead of its time with a home delivery concept — something that is now a common behavior among users — the founders failed to understand the purchasing behavior of its target market. The company was unable to develop a sustainable business model and lost more than $800 million before filing for bankruptcy in 2001.
Validate early and often
To avoid the mistakes Color and Webvan made, entrepreneurs need to validate their ideas early and often. Here are three important steps to help you test your concept:
First, identify your key assumptions. There are certain common denominators that must be true for your product to be successful. In Color’s case, the founders assumed that people wanted to download an app that lets them share photos with location data—and that users would engage more with photos that had location data. Those assumptions proved to be wrong.
To validate your own product, identify the assumptions that are unpinning your idea. Whether you believe that people want a product that’s cheaper, better, or faster, you need to identify key differentiation factors, and then test them. Prioritize your assumptions based on their impact, and plan to prove the validity of those assumptions.
Second, test your assumptions before you build and launch your product. Put your assumptions in front of customers for a trial run. Some cost-effective ways to reach prospective users include lead generation campaigns, painted door tests, and customer interviews.
- Lead generation campaigns. These are fairly easy tests that can be set up by one person in a matter of hours. Simply purchase ads on social media sites, such as Facebook, LinkedIn, or Google to advertise your product. For example, to test interest in a pay-per-use washer machine, we purchased Google ads targeted at people searching “cheap washer” and Facebook ads aimed at new homeowners. Use copy that focuses on the problem you have identified, and how your product solves it. The performance of these ads will provide valuable information about people’s interest in your product, as well as on the effectiveness of your messaging and value propositions.
- Painted door tests. A “painted door” test creates a minimal user experience related to your product and then measures user engagement. Behind the painted door, you may include a survey or some other mechanism for collecting additional qualitative data. Buffer, for example, a company that makes a social media planning app, used a painted door test to determine whether people would be interested in receiving scheduled tweets. The call-to-action was to click to a plans and pricing page. When users did so, they received a message that the product wasn’t quite ready to launch—and a prompt to add their email to a waitlist. Painted doors are essentially landing pages for your product. You can also experiment with multiple A-B versions of the page to determine what messaging works best.
- Customer interviews. You can use emails collected from painted door tests to reach additional customers for interviews. The key here is to ask open-ended questions focused on the user’s problems and experiences—not your proposed product. For example, ask whether a customer struggles with the problem that you’re solving, and if so, how it affects them. While 100 customer interviews are ideal, interviewing even 10 or 20 people can provide invaluable insight.
Third, build a rapid prototype. The final validation step is to build a gremlin prototype. This isn’t a full-fledged development effort. Instead, with a gremlin prototype, you build a working interface, and then manually execute the backend service. For example, when I worked at ShopRunner, I built a gremlin prototype to see if people wanted to shop with multiple retailers at the same time, but check out simultaneously from one place. When someone submitted an order, we received an email, and then we fulfilled it by ordering the items using the user’s information. We ultimately discovered that few people wanted this feature—and it saved us the time and money of building out the rest of the product.
The validation process may illuminate things about your idea that you didn’t expect – and don’t like. But that’s the point. Dig into any criticism and explore whether there is a real market for your product. The answer may be that another problem is more worth solving. But better to discover it now, than months and millions of dollars down the road.
For additional resources and expertise on growing your startup, reach out to attend our upcoming Samsung NEXT Alpha Training event in July. To learn more about upcoming Samsung NEXT events, sign up for our weekly newsletter.