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What are the best tools/tips for validating your market?

My new venture is trying to find efficient methods of doing some in-market research. We're developing a financial product for small and medium-sized businesses (SMB's) and want to test out which of the product's benefits (and associated messaging) resonates the most with target stakeholders as well as identify which groups of stakeholders will be most interested in the offering so we can target our launch marketing effectively. All ideas besides doing it all via linkedin and 1:1 blind calls/e-mails would be greatly appreciated!

8 Replies

removed Remover
1
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removed Remover Entrepreneur
Freelance Software Product Developer at Greenfield Innovation
Scot,
I have been doing some similar research, though mine was focused on the individual retail investor. It sounds as though you have already done market sizing and determined a target market. You are now looking to figure out your audience's pain points, and which are of most concern, correct?

You might try a broad overview / gradual zoom-in approach.
The Course Overview: Search Result Scanning
Take each problem statement or feature description of the product, and paste them one at a time into Google. These results are great for identifying unmet need. Especially if the same issue comes up repeatedly on a forum, with no definitive solution!
  • How many search results? (proxy for popularity)
  • Which groups are talking about it? (message boards, trade associations, product forums/feature requests, support site for a competing product?)
  • What else have they tried?
  • What are the shortcomings of other solutions?
  • If you find a message thread that is spot-on for one of your value propositions, what other concerns are raised in it? Maybe you can identify a related need, or different language to express a need.
  • Which threads are up-voted the most, and which of your benefits correspond?
  • Does one of your benefit descriptions yield a lot of off-topic results? What related words bring the results back on-topic?

Medium-grained
Find out more about the communities that are on-target.
  • How many members?
  • Does the community site share demographics (e.g. for advertisers)?

Finer-grained
Once you've identified the most relevant communities, perhaps you have a good survey audience to answer specific questions.
  • Offer a freebie for survey completion
  • Encourage a prioritization of concerns, using rank order questions or weighted answers
  • You may get some feeling for how the individuals regard each benefit. Is it a parity feature, expected? Is it the utility they have been seeking and failing to find?
  • Include some "benefits" that are definitely excluded from your product plan. This may help disguise the nature of your offering. It would be interesting to note if these score highly.

Good luck! I would be interested to hear of your progress.
Monte

Bob Crimmins
4
0
Bob Crimmins Entrepreneur • Advisor
Entrepreneur, Engineer, Startup Anatomist, Community Builder, Unrequited Philosopher
Good stuff, Monte. I especially like the search results angle.

Scot, no reason not to try all/most of what Monte suggested. You'll learn stuff.

I would add that A/B testing messaging via landing page variants and search ads is a powerful combo. Tactically, I like Unbounce for A/B testing but there are a bunch of others out there. There's also a new product out called QuickMVP that makes it uber-simple to run small tests... they even take care of the AdWords processing.

I understand that your question is principally about validating marketing messages. However, since your title is about validating a market (and not just market messaging) I'll add here that customer development is about the most valuable things you can do early on in a startup. There is simply no substitute for actually talking to your potential customers... a lot of them... often... face to face. For you, that would mean talking to the potential users as well as the decision makers at small/medium businesses.

It is remarkable what you'll learn from having an old fashioned conversation with a customer that you would never have learned in any other way. It's not just about validating your assumptions or finding customers that like what you're doing. It's about finding out from them what they would do differently, to make it better... it's about what else they'd like to see that you didn't think of... it's about hearing the visceral pain in their voice. In the process, you'll be experimenting with your messaging with each new conversation, refining it each time until it resonates like the bells of St. Marks.

Approach customer interviews with humility and you will be rewarded. Don't tell them what your solution is and then try to talk them into liking it. Ask them to explain their problem, how they currently solve it, what their ideal solution would look like -- before you've told them what your solution is!

Assume you're on the wrong track from the start and seek their help to correct you. In fact, if they like your idea then try to talk them out of liking it. If you can't talk them out of liking it then you just might have something.

How many is a lot? Well, it's never enough. I've had more than 150 face-to-face customer conversation about my current startup; and I'm no where near done. I learn something new with virtually every new conversation. Just when I think I've heard all the new ideas, the twists on a theme, the novel approaches... here comes another. Seriously, it amazes me every time.

Find aggregation points to make your convos more efficient. Are there annual meetings, industry trade shows, meetups, seminars, etc. where the market sectors come together en masse? Yes, use LinkedIn too, but to find out who your connected with in your target market and then ask for an intro or just ask to have coffee directly. Since your not selling anything to them (you're just doing research) you'll find plenty who will let you buy them a cup of joe.

There is a ton of good stuff written out there about how to do customer development interviews. In the end, however, just focus on have a real conversation and a humble exploration of the problem set you're going after. If you do that you'll get amazing results.


Narjeet Soni
2
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Narjeet Soni Advisor
Mobile Apps and eCommerce expert, Lean Startup and Agile evangelist , Entrepreneur, EU resident
Continuing on what Bob mentioned, I have a good list of basic questions you can work with when doing customer interviews:
  1. Tell me a story about the last time.....
  2. What was the hardest part?
  3. Why was that hard?
  4. How do you solve it?
  5. Wy is that solution not awesome?
Some Rules
  • Don't Pitch! So don't ask any leading questions
  • Look for behaviour not opinion
  • Look for Past/Preset behaviour (so don't ask, will you use such a solution?)
You can also use Javelin board to run your experiment. Check this and related videos:youtube.com/watch?v=-_MH8TENpwc

If you want I can also get you in touch with a guy, who helps startups and corporate, design such experiments and specialises in Customer Development and Validations. As far as I understand, he already did work on some banking and financial products.

Scot Gensler
1
0
Scot Gensler Entrepreneur • Advisor
Strategic Operations & Business Development Executive
Thx everyone -- great feedback!

We're pretty comfortable with general market size (SMB's are enormous, just difficult to reach) and have talked with enough folks to feel confident in themarket need for the product/service. Key for us at this juncture is deciding which SMB segment(s) will prove most efficient to run after, as well as what messaging / key product attributes would resonate the most and influence conversion.
Jasmine Alexander
0
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Jasmine Alexander Entrepreneur
Founder and CEO jazmine.com
https://validately.com/
John Shiple
0
0
John Shiple Advisor
CTO
Here is the simplest possible way to validate your market. This is also know as Lean, Agile, Customer Development, and the Scientific Method. I like the Scientific Method because it has been around centuries longer than the other methods, and they areall, at their core, the same methodology. The Scientific Method works like this:
  1. Decide (or tweak) how your company will make money (your hypothesis or business model/plan). Decide (or tweak) how you will measure this success or failure of your business/feature/concept(aka metrics, usually $/revenue is the biggest one)
  2. Make a plan to try to make money and do the plan (test the hypothesis)
  3. Review metrics, tweak the plan, and update your metrics. Go to step 1
On the surface, it's really easy. Now the hard part is this...how do you know if steps 1, 2, or 3 are even right? You need metrics. Without metrics, there is no point in even trying (how will you know you failed...or succeeded?). Once you have metrics...then you have to TRY REALLY HARD. And that's it. Easy to say, very difficult to do.

There are tons of resources for you to learn this strategy and tactic. Find the methodology that works for you. As a technologist, all of these processes are the same, however, they attract different people for different reasons. Go with the methodology that you understand and can execute. For business/sales types, Customer Development is a good way to go. For tech startups, Lean Startup and Agile are good techniques. Once you really know what you are doing, just use the Scientific Method. You can read the other comments in this thread...if any resonate with you...that is likely the methodology for you to employ.

+=John
Narjeet Soni
0
0
Narjeet Soni Advisor
Mobile Apps and eCommerce expert, Lean Startup and Agile evangelist , Entrepreneur, EU resident
Hello All,

Since couple of startups I am working with, were asking for a formal process of customer development and validation, I thought I would collate the information and document it.

Please check it and use it as you need:

All the best with your startups :)

Taiwo Ajetunmobi
0
0
Corporate Strategy
Try rolling out a survey (Survey Monkey or Google Form) to a screen list of target SMBs. Sample size of 500-1000 completed surveys should be rich enough.

A few providers that can help you find a respondents are:

Research Now -They have a deep database of survey respondents and can filter by multiple demographic criteria. However, they may be a little pricey.

Constant Contact - Another approach is to pay for a list of SMB contacts from constant contact and send out a brief email and link to your survey.

The key issue here that you want to be smart about how you target the respondents (SMS owners). Be clear about your criteria. Consider things like:
Annual Revenue
Num of Employees
Location of business
B2B or B2C
Industry focus

Hope this helps
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