Find An Idea

Product validation: 2 don’t-miss stages to make sure your customers will pay

Truth #482 of entrepreneurship: It doesn’t matter how good you think your product is if your market won’t pay you for it.

If that made you squirm a little in your chair, goooooood. THAT is why product validation is so important — because you want to avoid waking up suddenly in a cold sweat with thoughts like, “What if no one buys my product?” and “What if I spend all this time and money to find out that no one cares?”

We’ve all been there, and it’s why we at GrowthLab spend eons on extensive research and a development cycle that doesn’t just last weeks — more like months and sometimes years! Our flagship product, Zero to Launch, took nine months to develop, and we’re still constantly adding to it.

We gladly put in this work upfront because we know all too well the risks of tying up all of our resources in one thing for too long, only to have it flop.

Health insurance product

Our health insurance product (logo above) bit the dust because we realized only a very, very small percentage would actually PAY (and very little money too). This mistake cost us thousands of dollars.

I’ll share with you some product validation processes that we use to bring clarity to testing, building, and creating million-dollar products, but before I do, let’s get one thing crystal clear:

The goal of product validation is not…

…to have a winning idea right out of the gate…

…or to look for reasons that your one and only idea needs to work.

The goal is to simply get 10 raving fans who would be more than HAPPY to pay for an early version of your product and LOVE it.

That’s it!

But we’re getting ahead of ourselves. To better understand this, we’ll dive into the two stages of product validation.

Product validation in 2 stages

Stage 1. Finding the right positioning via market research (~3 weeks)

Before you can know what to build, you need to first know who it is that you’re building this … thing for. You want to be able to honestly answer questions like:

  • What is the biggest problem your market faces?
  • What can you create to help solve this problem?
  • Are you building the right product?
  • How big is the market for this idea? And is it big enough?
  • Would real people be willing to pay you if you created this product?

We spend typically three weeks doing open-ended market research that could involve one or a combination of the following…

Asking email subscribers and social media followers
If we have a broad idea that we want to start to explore and narrow down, we fire off a question on social media or pose a question to a particular segment of our email list to get a pulse on what our audience thinks.

Email asking readers to share

Actual email we sent. Notice that we get highly specific and detailed with what we ask readers to share.

Typically, when we send these types of “tell us what you think” emails, we explicitly ask people to reply with the most relevant and biggest problem they face. Example:

Email from customer

Read and bookmark this article about customer research, from an expert who does a TON of the right customer research.

But hold on, your job’s not done just because you got some responses. The next step is to find common themes — because everyone will have different perspectives and problems, but just maybe you can find one or two threads that tie them all together.

Pay attention to those, and armed with that data, try…

Conducting market research surveys
Your customer survey should focus on three to five general short questions that help you gather trends that are happening across your market. You could use services like Google Forms, SurveyMonkey, or Typeform to create easy-to-use surveys.

While surveys collect a broad reaction from your audience, their other purpose is to find people to call individually to learn more relevant pain points that you can then use to inform your product and positioning.

Google Forms survey

Example of a survey we sent out in an email P.S.

When creating your survey, avoid leading questions (e.g., “Why do you hate working out?”) and give clear examples of the types of answers you’re looking for, so that the reader knows how specific they need to be. And more important, ask for their name and email address so that you can follow up if necessary.


This video from one of our product developers explains how to create the perfect customer survey.

When we send surveys, we aim for 100 responses. It seems to be the sweet spot for giving us an accurate reading on market trends. You may not have a huge email list to work off of yet, and that’s fine. Aim to get as many responses as you can and follow up with the people who do with…

Doing market research one-on-one calls
People will spill their hopes, fears, dreams, and general gold for your sales page.

But first you have to find them. I’ve already mentioned that you can surface some of these people from conducting surveys or posing a targeted question on social media. The best people are those who seem awfully riled up and emotionally charged about whatever it is you’re talking about. Just note the difference between:

“Hm, yeah, that’s an interesting idea.”

Versus…

“Oh my god, I’ve been researching that VERY thing for MONTHS and I still struggle with it!”

If the person feels as if it’s a pain in the ass to talk to you, you’re approaching the wrong people. Here’s a sample script to reach out and get them on a call with you:

Subject: Can I get your feedback?

Hi NAME,

I’m NAME and I am with <your company name>.

CONTEXT ON HOW YOU FOUND THIS PERSON, e.g., Thanks for filling out our research survey last week. I was particularly fascinated by your comment about SURVEY COMMENT.

I’d love to ask a few questions about this over the phone. Would you be available for a quick 30-minute chat sometime later this week?

If so, I’m free during any of these time slots:

DAY at TIME

DAY at TIME

DAY at TIME

Please let me know what time would work best for you.

Thanks,

NAME

When they agree, be sure to set it up on a calendar, send them an invite, and be prepared with a Zoom meeting room, Skype ID, or whatever other means of contact.

The actual call should focus on open-ended questions about the problems the customer currently has, the kinds of solutions they’ve already tried, and their feelings toward the problem. The following questions work:

  • What are the main things you’re focused on right now?
  • What’s the number one thing you’re struggling with?
  • What have you tried to solve that problem? What happened?
  • If you could wave a magic wand to solve this problem, what would that look like?

Your objective with these calls is to clarify and guide yourself toward the problem in the market that you should solve. In the end, you put in all of this legwork to answer this ultimate burning question of:

Do people actually want this? Is this particular market and product category worth pursuing?

If in our research we find that the answer is no, we don’t just give up; we ask: What is the BETTER OPTION to pursue?

But if the research goes well and you home in on a huge problem worth solving, you’ll have the oopmh behind arriving at the best positioning for your product. Here’s a peek at our positioning document, which is the culmination of all our market research, including the problem customers face, their hopes, fears, and dreams, and how we can differentiate ourselves from the competition, for Behind the Sales Email:

Positioning statement doc

We wanted to be EXTRA clear on who this product was for. Peep at how we created the doc in the article here.

Stage 2. Validating the product

You’ve found out that real people (we recommend at least five) are absolutely THRILLED about your potential product, so you quickly get to work to build it.

Slow your rollllllllll…!

You’ve merely confirmed that people want this particular problem SOLVED. In fitness, for example, there are dozens and dozens of ways to solve the problem of weight loss. You don’t know if your product is solving that problem with replicable, optimal results just yet, or if your positioning is absolutely resonating with the market.

So you have to test it with what we call a “de-scoped” version of the product. That is, a simple, usable version of the product that will be tested by a small segment of your target market. Think of the de-scoped product as a “beta” that you can still charge a lower price for.

Let’s say you wanted to build a course on how to write a sales page (which we have!). Rather than spend the energy to create the entire course to test it, ask yourself: What would it look like if it were easy?

A two-day live webinar testing your planned content perhaps?

Yes, that’s good.

Or even simpler: an outline or a PDF to test a particular value proposition.

giphy 1

In fact, I made $5,000 off an OUTLINE that then turned into a beta. I was able to do that with the following product validation method…

Pre-selling the product to gauge interest
I wanted to teach content-creating entrepreneurs and writers how to get their articles published in major recognizable publications. The problem I was solving? Not knowing who to talk to or how to pitch.

Before plunging into the six-week-long webinar series I’d envisioned, I created a simple four-page outline to show what people would learn. I was upfront about wanting to get a read on interest levels and that I was looking for beta testers. Then I went directly to prospects, and if they were interested, offered a one-time discount for joining the beta.

Outline

Screenshot of the outline I created.

Going at it this way was low risk because if enough people were willing to pay (I made sure they paid me first), then I’d know I was onto something and could get to work on building the beta product. But if not, I could’ve refunded those who paid and went on my merry little way — no harm done.

In the end, 17 people paying me on the basis of an outline was enough validation to move forward with my beta.

Hosting a paid webinar
A paid webinar (or a live in-person workshop in some cases) is awesome if you feel confident about your product. Let’s say you wanted to create a course with eight modules (go you!). Rather than produce the full-fledged course, you can instead simplify with four modules and conduct live webinars, one per week for four weeks.

The benefits of validating your product this way:

  1. You still get paid to test whether your positioning resonates with your audience.
  2. You get immediate feedback on which parts of your content work and which need improvement.
  3. Based on reaction and feedback, you can keep refining and adding to the outline, videos, worksheets, and overall material until you knock it out of the park.

At GrowthLab, we do paid webinars with limited seating and a lower price point to test our positioning and content before they become full-on courses. We typically launch these paid webinars to a select group of people that are within the product’s target market and even devise a full launch strategy for it.

Paid webinar

Screen grab from a recent paid webinar (it’s our CEO in the upper right corner — say hi!).

In essence, we treat these mini-products very seriously, pitting performance against certain key performance indicators and conducting a thorough 360-degree evaluation of what worked and didn’t work. Things we look for:

  • What do people love?
  • Where do people get stuck?
  • Any questions or objections, like…
    • …objections from students that are valid and that need to be addressed in the material
    • …objections from students that indicate confusion
    • …questions that are simply unrelated to the topic

Some of the above items potentially tell us that we might not be framing content correctly, students aren’t fully absorbing the material, or something else may be wrong. We take all this information and summarize it like so:

image3

The more detailed your debriefing notes, the more bullet-proof you can make your final product.

Constantly asking for feedback
Always be testing positioning, copy, scripts, exercises, and material with a paid webinar, with friends and family, or via an “advisory board” of customers/readers with whom you regularly keep in touch. Every one of these people can help you validate your ideas, as well as offer helpful feedback on what exactly to improve and what you’ve nailed.

Feedback survey

Example of a survey that asks for feedback.

One thing to note: When asking people for feedback, make sure that they are representatives of your intended target market. For example, one common mistake many beginning students make in Zero to Launch, a course to help aspiring entrepreneurs start their online business, is that they tend to ask other students to validate their business idea, except…

…OTHER STUDENTS ARE NOT NECESSARILY THEIR TARGET MARKET.

This creates a situation of getting false positives and people who might tell you what you want to hear, but aren’t actually going to buy. No bueno.

Bad data is sometimes worse than no data.

As a recap, here’s a quick summary of what to do when you have a product idea:

1. Find your market and identify their BURNING PAINS

2. Confirm that your solution to their problem is one that they NEED

3. Test your product with a minimum viable product (MVP)

4. Get feedback and iterate

5. Keep testing until your 10 raving fans tell you that you have a runaway hit on your hands

giphy

Product validation can seem like a lot of work in the beginning (and it can be!), but do it right and it can be the difference between a business-changing product and a flop. Yes, it’s THAT important!

Let us help you go from no idea to a profitable idea

If you’re stuck finding an idea or have an idea but are having trouble validating it, this three-part video series by GrowthLab’s CEO, Ramit Sethi, will shortcut your success with the lessons he’s learned from over 10 years of building an online business that has over 30,000 paying customers in 50+ industries.

Get access and start your online business this afternoon

You Might Also Like

Find An Idea

90 real businesses to help jumpstart your idea-finding process

Having trouble identifying THE idea for your business? These real, live businesses could be the inspiration you need.

Find An Idea

10 profitable business venture ideas

The right business venture can help unlock the door to an unlimited earning potential. Learn the systems to identify a good business...

Find An Idea

5 simple strategies for recognizing the business idea that’s right in front of you

Five simple strategies for recognizing the business idea that’s right under your nose.

One Comment

 

The best thing is to definitely try and sell your product or service. I often say that a credit card (or payment) is worth 100 emails.

Too often I think startup founders rely on a landing page just to collect emails and think they will all convert to customers. That isn’t often the case.

I went through the whole process of trying to pre-sell my startup idea and shared a number of the learnings.

Comments are closed.