Getting Started

Market Validation, What it is and How to Get Started

Close up of phone with Airbnb logo on screen

Market Validation is the science behind an idea to business development. It requires a disciplined approach to identifying and validating assumptions, to find the answers that are as close to the truth as possible

In this article we’ll take you through understanding the important variables, identifying assumptions and the 3 important steps for getting started on validating your idea.

What is Market Validation?

It helps to make sure that you develop your idea into something that people actually want, and will pay for.

In a more formal context, it’s the process of collecting information to test assumptions about the variables that will drive the success of your business before you invest significant resources into building the product.

What do you mean by variables?

A variable is anything in your business that you have the ability to change. There are a lot of them, which is what makes starting and growing a business hard (it’s a lot to think about and get right!) But, you don’t need to focus on them all at once. The key to getting started is to only focus on the ones that matter most in the beginning.

Here are some quick examples of the key variables:

  • You
  • Your co-founder (if you have one)
  • One type of customer (persona)
  • One problem you’re solving
  • One solution you provide (product)
  • One product feature
  • One input into your product
  • An employee or contractor (if you need any)
  • Your company vision
  • Your company mission
  • One of your companies values

A successful business is one that has a combination of variables that work together to produce the final desired result, whatever that might be . For many people, it’s a profitable business and a positive impact on the world.

The key to moving forward is only concerning yourself with the variables that matter right now. There’s no point thinking about all the employees you’ll need, what your company culture will be, how much money you need to raise etc. when you haven’t confirmed that people actually have the problem that you’re dreaming up solutions to.

Don’t waste time and energy worrying about your future problems now, only concern yourself with the things that you need to know to gauge whether your idea is valuable. You can work the other things out when the time comes (and things will likely change a lot so any time thinking about later variables is time wasted).

So for now, here are the key variables you should focus on:

  1. The problem you’re solving (it needs to be a real problem that people will pay to have solved)
  2. Who you’re solving it for (your early customers — the people who will pay for the first version of whatever you create)
  3. What your early customers care about (the bare basics, so you know how you can make something that people will pay for with minimal resources)
  4. Why you care (because you need to care to commit the next 5yrs of your life working towards this thing).

Your Assumptions

If you cast your mind back to school science, you’ll probably remember the concept of a hypothesis.

A hypothesis is a “proposed explanation made, on the basis of limited evidence, which acts as a starting point for further investigation.”

A hypothesis is also the starting point for any experiment.

Similar to this, the thoughts you have about your idea are also mostly assumptions. They’re based on your experiences and views. They provide a great starting point for identifying an opportunity. But you need to do the work to find out whether the things you think stand true for the rest of the world, actually do.

Otherwise, you risk building something that no one wants, and that’s when business is really hard.

As I’ve mentioned, the process of doing this is what people call market validation.

3 Steps to getting started with market validation

Step 1: Identify the problem you’re solving:

People invent things to solve problems. The wheel was invented to solve the problem of moving goods. Airbnb was invented to help solve the problem of an accommodation shortage during a design conference in San Francisco when the co-founders couldn’t pay their rent.

Luckily, the founders of AirBnB can now pay their rent. Luckily, the founders of Airbnb can now pay their rent.

People find solutions to their problems in products or services. And the bigger the problem, the easier it is to get someone to buy the thing that solves their problem.

So, before you start building a product, it’s important to have a good understanding of the problem you’re solving. Figure out how to solve a problem, and it’s easy for the product to define itself.

Take a minute to reaffirm the question: what problem do you think you’re solving?

Note: this is probably an assumption or hypothesis.

Step 2: Identify your early adopters (customers):

Your early adopters are the people who will be most likely to pay for your product because they have the problem the most and/or they believe in your philosophy or mission.

The more exact you can be when identifying your early adopters the better.

Because although there might be a wide range of people who have the problem you’re looking into solving, it’s unlikely that they all behave in the same way and care about the same things; or experience the problem to the same degree.

The more variety you have in your target market, the more variables you have to get right.

So, which group of people do you think has the problem that you’re solving the most, and will be most willing to pay for a solution?

Note: this is an assumption or hypothesis.

Step 3: Talk to your early adopters:

Identifying your early adopters is one thing, but understanding them is another. Most people spend a lot of time THINKING about their potential customers, hypothesising about their motives and beliefs.

But not enough people actually take the action and do the work that is required to validate the actual reality.

Which is unfortunate, because it’s a highly effective process (the learnings are hugely valuable!). The reason most people don’t do it is that it requires TALKING TO POTENTIAL CUSTOMERS. This is a scary idea. No sarcasm there. I know all too well the sinking feeling that comes with the idea of having to talk to people about your idea.

But it is really important, and it does get easier the more you do it. This is something our programs can help you with if the idea terrifies you.

(People sometimes sit behind a computer and use ‘building a website’ as an excuse not to get out and talk to their customers) (People sometimes sit behind a computer and use ‘building a website’ as an excuse not to get out and talk to their customers)

The relationships you have with your first customers will be fundamental to your ability to build a great product. If there’s one single thing you can do to quickly validate your idea, giving you confidence and assurance you need to take it out into the world, it’s this:

Get to know your potential customers. 

This message should be hammered home by now.

What now?

So, now you know what you should be doing to take the next steps towards turning your hypothesis into a set of fundamental variables, or truths.

Next step is learning how to find people to start validation your idea with, and getting the questions right.

Take a look at our full guide on Market Validation to find out how.


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We’re also running The Startup Series, a three-phase program designed to turn people’s great ideas into real businesses.

We’re here to help kiwi startups get off the ground. We wanna help you turn your startup idea into a reality.

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