Three Space Coast founders talk market validation and steps they use to assess demand for their new ideas.
Many consider validation to be the most important step in starting a company. Before you’ve even started building your first prototype, you should spend some time assessing demand for your product. While many ideas die in this stage, doing a little market research can save you from building something that no one wants to buy.
In short, market validation means determining if the demand for your product is great enough to support its growth. That process breaks down like this:
- Consider the problem your product solves and the audience who experience it.
- Determine if that audience is willing to pay for a solution.
- Determine if that audience is large enough to support your company.
- Examine competitors and determine if your prospective product will come out on top.
In the first part of our Day One At Groundswell series, Michelle Crawford, Kailas Narendran and Avery Piantedosi give their tips on validating demand for a new product.
Think about the problem your product solves.
Set aside your idea for the moment and look at the problem that your product will solve. Considering the problem and who faces it will be your starting point for developing your target audience.
Michelle Crawford, CEO and Founder of plus size e-commerce retailer Society+, said that her best ideas come from examining the issues her company and customers face, “then we just talk to as many people as we can to better understand the pain points.”
Consider the size of your audience — and the importance of the problem to them.
This is where you start to size up the demand. Is the problem at the top of mind for your prospective audience — that is, is it one of the top three problems that they face? Or is it a luxury? One of the most common reasons for products’ failure is exactly that: they’re a “nice to have,” not a “need to have.”
Michelle said that she considers two important questions when assessing new ideas:
- Is this a real need in the marketplace, something that both customers and investors are willing to pay for?
- Is this problem hard enough to solve that it is a barrier to entry to other players, but still technically possible?
“Just because it is “hard,” doesn’t mean we don’t do it,” Michelle said. “The easier technical solution is oftentimes the inferior solution for the customer.”
While developing Myomo, a powered brace to help those afflicted with neuromuscular conditions to regain movement, Kailas Narendran had a difficult time determining if his idea was even viable. He talked to tons of physicians and researchers in the Boston area and the answers were all over the board. “We came out with the idea that there’s probably some chance this would work — good enough that it was worth trying.”
While determining the ideal audience for Myomo, Kailas examined patients that suffered muscle loss. Stroke patients had few options and their time frame for recovery was bleak — for many patients, they had nothing to lose. Kailas said, “the market need was pretty clear, we were looking for a problem that had really big numbers and was very underserved.”
Avery Piantedosi, founder of personal safety app LOIS, suggests talking to everyone about your idea. Ask for feedback and if they’d be willing to pay for it. “It was very important at this phase to listen and take criticism well,” Avery said, “trying to get rid of the CEO ego during this phase helps see things from others’ perspectives.” And most importantly, if the demand isn’t there, “pivots can happen this early — before you blow a ton of money!”
- Use Facebook’s ad tools to identify the potential size of your market. Without paying anything, you can view your reach by interests, industry and location.
- Look for people who are passionate about your field on social media and reach out. Develop relationships with thought leaders who can give you feedback or help you reach a wider audience.
Examine current solutions to that problem.
Even before you start building or advertising your product, it’s important to know the landscape. Who are the major players in your would-be market and what are they doing? If what you’re doing is different, why hasn’t it been done before?
Kailas was in a similar place — two of his products had no real competitors. In addition to figuring out whether or not his product would even work, he had to figure out why it hadn’t been done and if his audience would be willing to give it a try. “With Myomo and Kiinde, assessing competitors was easy — there were none,” Kailas said. “What we were doing was totally revolutionary and different, but you don’t want to be so different that it’s risky from a tech perspective and a market acceptance perspective.”
“In all cases, what you really have to get to is identifying assumptions and then figuring out which assumptions are worth questioning.” Kailas said, “it’s like when you’re running through a forest and there’s no one behind you,” he said, “you really start to question yourself.”
Michelle said that the Society+ team uses traditional methods of measuring the competition including reviewing competitors’ pricing and reading industry reports, but they’re wary of confirmation bias. One particularly effective method Michelle has found is looking at customers’ comments on her competitors’ social media. “Customers are not shy,” Michelle said, “and they will explicitly call out the shortcomings and explain better alternatives.”
- Find products online that solve a similar problem (or the same problem). Look for pain points in their reviews and ensure that your product addresses them.
- Use Google Trends and Google Alerts to keep tabs on both your industry and on your competitors.
- Talk to prospective customers. Find out what they’re using to solve the problem currently. Ask about any pain points involved in their current solution.
Day One at Groundswell: Validating Your Market is the first part of a series on launching your idea.