Issue #15: Talk to your potential customers
Issue #15: Talk to your potential customers
Even tech giants get this wrong...
Reading time: 6.5 MinsHello Techstars…
Big news (for me) dropped this week - Peerkat, my start up, was selected for the Techstars Web3 program.
I’ve linked to the announcement in the caption but I am really excited to get into the bones of the program and see Peerkat emerge stronger and better the other side.
After a long week in Dublin we’re back to the remote version of the program and there’s lots to do already.
I’ll keep you all updated as to learnings, and to kick things off market validation.
Market Validation 101: Talk to people
Market validation is the process of testing and validating your startup's product or service in the market before launching.
It involves gathering feedback from potential customers to determine whether your product meets their needs, identifies potential challenges, and identifies opportunities for improvement.
Market validation is crucial for a startup because it provides evidence that your product has a market and that there is demand for it. It can also help you identify potential competitors, validate pricing, and refine your product before launch.
Build it and they will come doesn’t work…
A infamous example of this is Google+. Despite being created by the tech giant Google and having a lot of hype surrounding its launch in 2011, it failed to gain significant traction and was eventually shut down in 2019.
Google+ was launched in an effort to compete with Facebook, but the company failed to fully understand the needs and preferences of its target audience.
They assumed that simply creating a platform with attractive features would be enough to attract users. However, the social networking space was already crowded with established players, and users were already invested in their preferred platforms, such as Facebook, Twitter, and Instagram.
Despite Google's efforts to promote Google+ through its other products, such as YouTube and Gmail, users didn't find the platform compelling enough to switch from their current social networking sites.
As a result, Google+ failed to gain a significant user base and eventually became a cautionary tale of what can happen when a company relies solely on the "Build it and they will come" mentality without properly validating the market demand for their product.
Other reasons
Most people, including myself, get so involved with the product or solving problems that don’t have an obvious end customer that they spend vast amounts of time and money in pursuit of something that isn’t needed.
Other reasons for putting off doing market validation are:
Fear of negative feedback
Lack of time and resources
Overconfidence in the product
Lack of understanding of the target market
Belief that product market fit will happen naturally
To approach a market validation process, you can follow these three distinct steps:
Step 1: Prepare a Clear and Simple Explanation of Your Product
Before you can begin conducting market validation interviews, you need to have a clear and simple explanation of your product or service. This is often referred to as your value proposition statement. Your value proposition statement should clearly explain what problem your product solves and what makes it unique.
A good value proposition statement should be concise, easy to understand, and focused on the customer. Here's a simple template you can use to create your own value proposition statement:
[Your Product/Service] helps [Your Target Customer] to [Achieve Desired Outcome/Benefit] by [Unique Value Proposition].
Here are a few examples of good value proposition statements:
Slack: "Slack is where work happens. When your team needs to kick off a project, hire a new employee, deploy some code, review a sales contract, finalize next year's budget, measure an A/B test, plan your next office opening, and more, Slack has you covered."
Airbnb: "Book unique homes and experiences all over the world."
Zoom: "Video conferencing with real-time messaging and content sharing."
As you can see, each of these value proposition statements is short, to the point, and clearly communicates what the product or service does and who it's for.
By creating a clear and simple value proposition statement, you'll be able to better communicate your product to potential customers during the market validation process.
Step 2: Finding and conducting your interviews with your key target audience
These individuals should have a genuine interest in your product and represent your target market.
Once you have identified your target audience, it's important to reach out to them and conduct the interviews. Here are some tips on how to do this effectively:
Reach out to your network: Start by reaching out to your personal and professional network to see if anyone in your target audience is willing to participate in an interview. This can be a great way to get started and to build some momentum.
Use social media: Social media platforms like LinkedIn, Twitter, and Facebook can be great for finding potential interviewees. Look for groups and communities where your target audience is likely to be active, and post a message asking for volunteers to participate in your market validation process.
Offer an incentive: To encourage people to participate in your interviews, consider offering a small incentive such as a gift card or discount code for your product. This can be a great way to get people interested and willing to spend some time talking with you.
Conduct the interviews: Once you have identified your interviewees, it's time to conduct the interviews. Make sure to prepare a list of questions that will help you understand their needs, pain points, and motivations. Keep the conversation focused on them and their needs, rather than on your product.
Take notes: It's important to take detailed notes during the interviews, so you can review them later and identify any patterns or trends. Consider recording the interviews (with the interviewee's permission) so you can refer back to them later.
Follow up: After the interview, make sure to thank the interviewee for their time and follow up with any additional questions or clarifications. This can also be a great opportunity to get feedback on your market validation process and to build relationships with potential customers.
Step 3: Analyse and test
Step 1 and 2 are critical to ensuring you have collected the right feedback from your target audience.
Step 3 in the market validation process is all about making sense of the responses you've received from your interviews with your target audience.
It's important to analyze the feedback in a way that allows you to make data-driven decisions about your product or service. Here are some key actions to take:
Organize the feedback: Start by organizing the feedback you received during your interviews. You can use a spreadsheet or other tool to capture key insights and common themes that emerged during your conversations.
Look for patterns: As you review the feedback, look for patterns or trends that emerge. This will help you identify areas where your product or service may be falling short, as well as areas where it's meeting or exceeding customer expectations.
Identify key takeaways: Based on your analysis, identify the most important takeaways from your interviews. This may include key features that customers are looking for, pain points that your product can address, or gaps in the market that your product can fill.
By taking these steps, you'll be able to use the feedback you received to refine your product or service and better meet the needs of your target audience.
Conclusion
In conclusion, market validation is critical for startups to ensure product-market fit and success. Don't put off this process due to fear, lack of resources or overconfidence. Follow these actionable steps to approach a market validation process effectively and ensure that your startup is on the path to success.
That’s it for this weeks newsletter. Thanks for reading 0xGregH! Subscribe for free to receive new posts and support my work.