Once you have established what problem or problems your target market faces, you’ll need to find out if they are interested in the solution you plan to build. Various tests can help determine if there’s a demand for your product. You don’t even have to do a complete build or spend much money.
The first step is to list all assumptions the product development team has about the solution. These could be about the product’s form and function and if it will solve the customers’ problem. They may assume that people are willing to pay for it and the amount people would pay for it. There might also be assumptions around and how customers will interact with the product.
Examine why you think the product should work in these ways. Whatever isn’t based on something that’s been tested or validated, is an assumption. Prioritise the assumptions to start with those most damaging to the business if false.
Rate your assumptions on which are most likely to be wrong, and which will impact the product most if incorrect. Test those that rate highest, first.
There are several tests you can do on your riskiest assumptions. Plan these based on time and cost. Project manager Rik Higham points out that the aim is to do the smallest thing possible to test the riskiest assumption.
Smoke testing can be used to validate a concept. It sees if there’s a demand for it and whether it will be profitable. This type of testing is affordable and gathers unbiased insights about customers. It reveals the pros and cons of your product or service without having to build it. This data can be used to adjust the product before launching it.
One type of smoke testing is detailed in the ‘sell before you build’ section below.
Sell before you build
One of the best ways to gauge interest in your solution is customers’ willingness to pay for it. As entrepreneur Tom Morkes puts it: “By selling the idea before you build anything, you save time and money and mitigate the riskiest parts of a new venture.”
There are several ways to do this. Set up a landing page with a sign-up button, or create a pre-orders page for actual sales. A landing page could include different plan options which users can click on. This will give developers an idea of what prices customers would be willing to pay.
Doing this validates that there is a need in the market and that your product meets that need. It confirms that customers are willing to pay for your product. This approach can help you gather useful feedback to help define your product. It can also build a loyal customer base ready to buy your product once launched.
A concierge is a hotel employee who makes reservations, books tours and provides general assistance for guests. Entrepreneur Sam Hysell says: “Concierge takes care of everything for you. You don’t care how they did it, all you care about is that it’s done.”
A concierge test manually provides customers with a product or service using little or no technology. You can gather feedback from customers because you’re providing them with a solution to their problem, in person. This will help you understand what they’re looking for.
The development of the popular Food on the Table app demonstrates how concierge testing was successfully used. The platform provides recipes, grocery lists and sale items for specific stores based on what you like to eat. Founder Manuel Rosso started the business by manually recording customer’s food preferences and looking for coupons. He then compiled shopping lists himself which he emailed to customers. He turned it into an automated tech product once he’d proven demand for his service.
This short-term solution maximises learning and mitigates risk without developing expensive technologies. Additionally, it allows one to deliver value to customers before the product is ready.
Wizard of Oz
A Wizard of Oz test creates the illusion of a fully functioning product. But behind the scenes the service or product is still delivered manually, similar to concierge testing. Doing this allows you to work directly with your customers and analyse their behaviour.
This effective and cost-saving method verifies demand and determines if your solution is solving a real problem. It’s also a fairly immediate way of creating an effective prototype.
Shoe store Zappos is a popular example of a Wizard of Oz test. Founder Nick Swinmurn put photos from local shoe stores online to see if people would buy them without trying them on. When someone ordered a shoe, he would buy it from the shop, and send it to the customer.
This allowed him to determine whether the market would buy his product. Zappos turned into a very successful business which was bought by Amazon for $1.2billion in 2009.
Single feature product
This test focuses on the main aspect of the product or service offering, which can stand on its own. It allows you to see if there is a demand for your product, and reveals how the customer is interacting with your solution and if it solves their problem correctly.
While this version of your product might not solve the customer’s entire problem, it could be solving most of it with minimal effort. It’s a great way to get audience feedback and also has the potential to start generating revenue. This approach saves development time and effort, and minimises expenses.
It’s unlikely that you’ll be able to test all your assumptions with one, single-feature product. Rather build more than one product to test so that you can easily determine which features are worth pursuing.
It’s important to document your findings as they emerge. Use the results to determine whether you should pivot, or if it’s worth persevering on the path you’re already on. Keep a record of your results. This can be especially useful if you are building more than one product, or if you plan to build more products.
Test and validate until you’ve established which initial assumptions proved to be true and can be incorporated into the build. Once you’ve done this you will be well on your way to building a solution people are interested in.
Experio did a series of experiments for our client, Medicare Health, a technology focused pharmacy brand. They wanted to find out if there was a demand for a product aimed at improving their customers’ experience. We tested and validated their riskiest assumptions to reduce the risk of investing in the wrong solution. Read the full case study here.