Are you planning to build the next big product or startup? Here’s a not-so-fun fact – 9 out of 10 startups fail in the first few years of their business. While 21% fail in the first year, 30% fail in the second year, and the rest in the fifth or sixth year.
But you don’t have to worry if you know why these startups fail.
While there are many common reasons behind the failure of startups, 34% of them fail because of not having a product-market fit. When entrepreneurs have a new product idea, their excitement is on cloud nine. They invest a fortune in developing it without testing or validating the concept. That’s the primary cause of products not working and failed businesses.
Many budding business owners aren’t even familiar with the term product validation. If you are also one of them, check out this blog and save your upcoming startup from failing. Let’s find out what product validation is and why it is crucial to validate products before you invest in development.
What is Product Validation?
When you have a new idea, it is just perfect in your head. However, the reality is always different. You have no clue whether it will find an audience after implementation or whether people would be willing to pay for it. You just have a hypothesis based on assumptions.
It is always risky to implement these ideas. Here is what you can face if you still proceed with it:
- No product-market fit: The product’s end users may not even need it. Or, you may launch it in the right market but for the wrong people.
- No USP: You may end up delivering a similar product to your competitors in the market, and it may not get the required traction.
- No feasibility: Your idea can be infeasible, and you may even run out of money while developing it.
However, don’t worry. There is a way to avoid all these problems, and that is product validation.
Product validation is a process to determine whether or not an idea addresses the demands and problems of present and potential customers. The product validation process is about putting your idea to the test with real people to receive their feedback on its viability.
Basically, it is a method for developing and maintaining a product-market fit that’s based on science. The process involves researching, collecting, and analyzing data and testing the product. Let’s now understand the reasons why product validation is necessary before development.
The Need for Product Validation Before Development
You can launch disruptive products if you invest in product validation before starting development by introducing quick fixes in your raw idea and implementing it in the best possible manner. Here is why product validation matters:
1. Helps Improve Your Idea
When you validate a product idea, you ensure that there is a market for it and it is desirable. And there’s a strong possibility that your initial attempt at product validation will fall short. But that’s precisely why you’re going through it – you are seeking improvements.
Product ideas are of two types – “Great” product ideas and “Just Fine” ones. If you want your product or startup to succeed in a highly competitive market, you need to make sure that your ideas are not just fine but great. Here’s how to differentiate between them:
|Great Product Ideas||Just Fine Product Ideas|
|Address a real-life need or problem||Adds no real value|
|Deliver real value proposition||Provide regular benefits|
|Have a unique selling point||Offers nothing new|
|Build a positive emotional reaction||Are unexciting and tedious for end users|
|Adds profit for the organization||Have no real commercial opportunity|
When you invest in product validation, you get a chance to improvise your initial idea to make the solution even better for the target audience. This difference between Great and Just Fine can decide the success and failure of your product. The feedback you receive from your clients can help you improve your product and make it more appealing to your target market.
2. Lets You Connect Better with End Consumers
When investing in product validation, here are some of the tasks that you work on:
- Talk to your end-consumers regularly
- Observe them using your product
- Build buyer personas
- Conduct interviews and surveys
- Reverse-engineer some popular products
- Talk to market leaders and analyze their strategies
- Balance data and opinions
All of these tasks help you gather more insights about your consumers and you start knowing them better. It just doesn’t help you build desirable products but also lets you market your idea in the right way and to the right people.
Because your clients will buy your product, you must pay attention to their wants and interests to ensure its success. When you reach out to your clients and consider their feedback, you demonstrate that you care about them.
Along with developing a better product, listening also aids in developing client trust before the product is released. Customer loyalty will increase due to this trust, and you’ll be able to create a build-measure-learn feedback loop to keep iterating on your product while keeping the customer in mind.
3. Save Time & Money
Having a great idea is just one part of the process. Building million-dollar startups requires the right implementation of that idea and much more. If you jump into the development without analyzing the idea’s feasibility, you may waste a lot of money and time.
That’s where product validation helps. When working on idea validation, you develop a proof of concept (POC) – the first step to finding the right product-market fit. POC is a verification methodology that determines whether an idea can be turned into reality. If yes, what is the right process to do so?
Here is how you achieve milestones to find the right product-market fit:
Once you validate the feasibility of your idea, you can invest in developing a prototype and MVP, which then the market validates. Without a POC, you may face technical challenges during the dedicated development process, resulting in losing your hard-earned money and time.
You strategically direct your company’s time and resources when you engage in product validation early in the development process. If there are no controls for validated equipment, all results and completed goods are at risk of being inconsistent.
Before you launch your product, the process of product validation can significantly improve the chances of MVP success. It can help you anticipate whether or not people will buy it, whether your firm will be lucrative, and how much money each transaction will bring in.
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