Customer Validationtips and tactics to make sure you’re solving the right

problem

What Is It?

Validate assumptions before spending time and money on execution

Customer ValidationThe customer “proof” that you have what it takes to execute against your business opportunity

When Do I Use It?

Nearly every successful company can be analyzed through this framework:

Vision - aspirational goal

Opportunity - the business at scale

Validation - team, product, market, etc

So What Is Customer Validation?

Restated:

Customer Validation means demonstrating that a particular customer segment perceives value in your offering

This is critical in any pitch, to VCs, clients, employees, and more.

How do I Validate?

There are many many ways to validate your customer need… but first:

Identify the earliest adopters The ones that will LOVE your product, even before it’s ready

and then TALK TO THEM

Ultra-niche Segments

If you can’t get 10 users, what makes you think you’ll reach 10k or 10m?

Ultra-niche segments

Segment aggressively to understand deep issues, not just what people say they want.

Pitfall: Customers

It’s common to talk to friends and other supportive groups and mistake them for “customers”

Make sure the niche segment are real customers

Get them to pay something… anything

Make sure that you’re determining viability of the business, not just if someone thinks it’s a good idea

Examples

Three types of segments and specific tactics to target them:

Global 2000 companies

Small business

Consumer Product

Global 2000 CustomerIdentify the type of person within the Global 2000 company that would be interested

Create 2-4 hypotheses about what they’ll respond to Find a way to reach out and split test a single value proposition to your target

Measure open and response rates; don’t expect any YESes on the first several iterations

Global 2000: tools

Lots of relatively cheap tools to identify people, measure messaging efficacy, and create professional split-test landing pages

Global 2000: outcomes

First phase: messaging

CTR and response rates to emails, e.g. ToutApp:

Global 2000: outcomes

Second phase: responses

Once you know what your segment responds to,track like a normal sales pipeline.

Use lightweight tools, since you’re still testing:

Small Business Customer

Understand what else is competing for your customer’s time / money

The hardest part is identifying your early adopter segment and getting in front of them

The goal is to find the one thing that drives conversions

Small Business: toolsTools here are often traditional marketing tools: - Search engine marketing - Printed materials- Door-to-door “sales”- Cold calls

Look for tools that allow you to compare effectiveness of pitches

Get in front of your customers; Get Out Of The Building

Small Business: outcomes

Split test messaging in a similar way, i.e. cold call 500 potential customers and try two different value props: VP-A: 98% hung up on me VP-B: 10% hung up on me

Validated Learning: B is better than A (or at least less bad)

After a few iterations and a lot of NOs, you may start getting some YESes

Concierge MVPIn many cases, because you’ve distilled the value prop down to a single thing, it’s possible to deliver the offering without fully investing in building it out.

If the small business client agrees to sign up, then you can often perform the service that should be automated in a manual way.

It should be indistinguishable from the customer’s point of view

ConsumersCustomer Validation for consumer products is generally more about scale than selling to individual users

Identify segment & market to them as if the product is real.

Use qualitative user interviews to identify needs.Verify them with quantitative tests, and ask for a nominal payment

Goal: build a backlog of paying users

Consumers: toolsMany platforms and marketplaces exist to help validate consumer need, including:

Consumers: case study

Audience Examples

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