jlk – You have a business idea that you believe is brilliant and innovative. You are confident that the product or service you offer will be a hit in the market and generate significant profits. You are ready to launch your business and conquer the world.
Hold on!
Before you rush to invest your time, money, and energy to bring your business idea to life, there is one crucial thing you must do first: market validation.
What is market validation?
Market validation is the process of testing and validating the feasibility of your business idea before launching your product or service into the market.
The goal of market validation is to ensure that there is real demand from consumers for the solution you offer and that your solution has more value compared to existing competitors.
Why is market validation important?
Market validation is important because it can help you avoid the risk of failure in business. According to a study conducted by the Statistic Brain Research Institute, around 42% of startups fail because there is no market need for their products or services.
This means that almost half of the existing business ideas are actually irrelevant or not of interest to consumers.
By conducting market validation, you can determine whether your business idea has the potential for success or not. You can save costs and time that might be wasted if you launch a product or service that doesn’t sell.
You can also adjust and improve your business idea according to the needs and preferences of consumers, thereby increasing your chances of competing in the market.
How to conduct market validation?
Market validation does not have to be a complex and expensive process. You can perform market validation in a simple, quick, and inexpensive way, as long as you know the right steps and methods. Here are some ways you can conduct market validation:
- Market Research
The first step in market validation is conducting market research. Market research is the process of gathering and analyzing data about the market, consumers, and competitors related to your business idea. You can conduct market research in various ways, such as:
- Online or offline surveys with potential consumers using tools like Google Forms, SurveyMonkey, or Typeform. Ask questions like: What problems do they face? What solutions are they currently using? What are the pros and cons of those solutions? Are they interested in the solution you offer? How much are they willing to pay for your solution?
- Interviews or direct observations with potential consumers. Visit places where your potential consumers are, such as markets, malls, campuses, or offices, and interact with them directly. Ask the same questions as in the survey, or simply observe their behavior and habits related to the problems and solutions you offer.
- Online research using search engines, social media, forums, blogs, or other relevant websites. Look for information about the market, consumers, and competitors related to your business idea. Find out what people are talking about, what they like and dislike, what they are looking for and need, and what they buy and use.
By conducting market research, you can gain valuable insights into the market landscape, consumer needs and preferences, and the strengths and weaknesses of competitors.
Use the data you collect to validate whether there is real demand for your solution and whether your solution has more value than existing solutions.
- Create MVP (Minimum Viable Product)
The second step in market validation is creating an MVP (Minimum Viable Product). An MVP is a simplified version of your product or service that only has the core features needed to solve the consumer’s problem. The goal of an MVP is to test and gather feedback from consumers about your product or service before developing additional features that may not be essential or of interest to consumers.
You can create an MVP in various ways, depending on the type of product or service you offer. Some examples of creating an MVP are:
- Creating a simple landing page or website that explains what you offer, its benefits, and how to get it. Use tools like WordPress, Wix, or Squarespace to create your website. Measure how many people visit, register, or purchase your product or service through your website.
- Creating a prototype or mockup of your product or service that demonstrates how it works. Use tools like Figma, Sketch, or Adobe XD to create your prototype or mockup. Show your prototype or mockup to potential consumers and ask them to try it and provide feedback.
- Creating a manual product or service that mimics the functions of your product or service. Use tools like email, phone, or WhatsApp to communicate with potential consumers and provide the solution you offer manually. Measure how many people use, are satisfied, or recommend your product or service.
By creating an MVP, you can test and validate whether your product or service can solve consumer problems and whether consumers are satisfied and interested in your product or service. You can also receive feedback that you can use to improve and refine your product or service.
- Conduct Market Tests
The third step in market validation is conducting market tests. Market tests involve launching your product or service in a limited manner to a group of consumers that represent your market. The goal of market tests is to measure and evaluate the performance of your product or service in the real market and to gather further feedback from consumers about your product or service.
You can conduct market tests in various ways, depending on the scale and resources you have. Some examples of conducting market tests are:
- Pre-order or crowdfunding for your product or service using platforms like Kickstarter, Indiegogo, or KitaBisa to raise funds from potential consumers interested in your product or service. Measure how many people are willing to pay in advance for your product or service and the level of interest and enthusiasm they have for your product or service.
- Beta testing or a soft launch for your product or service by providing exclusive access to a selected group of consumers to try your product or service before officially launching it. Measure how many people use, spend, or refer your product or service and the level of satisfaction and loyalty they have toward your product or service.
- Regional or local launch for your product or service in a smaller or specific market, such as a city, province, or specific country, before launching it in a larger or global market. Measure how well your product or service is accepted, desired, and purchased by consumers in that market and the potential challenges you face in that market.
By conducting market tests, you can test and validate whether your product or service can compete and thrive in the real market and whether consumers really need your product or service. You can also gain deeper and more comprehensive feedback from consumers about your product or service.
Conclusion
Market validation is a smart way to test the feasibility of your business idea before launching your product or service into the market.
By conducting market validation, you can avoid the risk of failure in business, save costs and time, adjust and improve your business idea, and increase your chances of success and competition in the market.
Market validation can be done in a simple, quick, and inexpensive way, as long as you know the right steps and methods. You can conduct market validation with three main steps:
- Conduct market research to gather and analyze data about the market, consumers, and competitors related to your business idea.
- Create an MVP (Minimum Viable Product) to test and gather feedback from consumers about your product or service before developing additional features.
- Conduct market tests to launch your product or service in a limited manner to a group of consumers representing your market and to measure and evaluate its performance in the real market.
By conducting market validation, you can ensure that
you not only have a brilliant and innovative business idea but also a relevant and appealing idea to consumers. You can build your business with more confidence and optimism and conquer the world with your solution.