Learning to Validate an Idea
One of the most common causes of startup failure is not validating that the problem you are trying to solve is in fact a problem that others have and one for which they searching for a solution. Founders should undergo a rigorous customer discovery process that starts with developing and validating a Problem Hypothesis Statement. The validation process is extensive, and it is covered in two parts. In the first part, you will find the initial three areas of customer discovery: interviewing, surveying, and observing.
To begin, construct your problem hypothesis statement. The Havard Business School recommended template for this is:
I/We believe that: [Insert a short demographic description of the target customer]
when [INSERT the core task or customer action]
who want [INSERT the key functional performance and/or a psychological need(s)]
are dissatisfied by [INSERT an existing or alternative solution]
because of [INSERT the shortcomings of the existing solutions(s)]
and/or because of [INSERT the constraints confronting target customer].
Entrepreneurs Methodically Validate Hypotheses
Your problem hypothesis statement is specific so that you can evaluate your assumption and design a test. Below are two examples. Once you have your problem hypothesis statement in-hand, validation begins by going through extensive processes know as customer discovery and market analysis. The better you know your customer, the current way they are solving the problem, their frustrations, and their decision process around looking for new solutions, the closer you will be to developing a solution they will want. Every entrepreneur should complete thorough customer discovery to identify target markets, evaluate current solutions, know the competitive landscape, and outline the customer journey to understand how decisions are made.
Problem Hypothesis Statement Examples
We believe that office professionals aged 25-45 drink caffeinated beverages
[when] throughout the workday and
want to have options with more protein and healthy-fat easily accessible.
But they are dissatisfied with the selection of teas and coffees available in their office,
because they don’t include high-protein, healthy-fat choices
and because their busy schedules prevent them from leaving the building to purchase the drinks elsewhere.
Example: Formal Wear and Single-Use Clothing
We believe that women ages 18-35 who
[when] who attend formal galas and events
want to have an affordable and diverse options for formal wear
But they are dissatisfied with the high cost of formal wear
because they can’t invest in more than one or two dresses a year
and because they don’t want to wear the same dress to every occaision.
Customer Discovery
Customer Discovery at its core is defining a clearer picture of your target market. This involves defining their demographic characteristics, ethnographic influences, and their customer journey. Through interviewing, surveying, and observing your potential customer’s behavior, you can gain a clearer picture of the customer (AKA: customer persona) for whom you are designing your solutions. There are best practices when using any of these tactics to explore your potential customer base. These best practices ensure that you are building accurate and unbiased perspectives of your target customer. You want to build something that your customers value and love and not try to retrofit an idea that you love to the customer.
Interviewing Customers
The challenging aspect of customer interviews is to make sure that you are conducting the interview in an unbiased and non-leading way. Too often we say to friends and family, I am building a new gizmo to address this problem. What do you think? Usually, friends and family will tell you they think it is wonderful. Whether or not they ever purchase and use it is a different story. Learn to ask good questions.
Readings & Guides
Tools & Templates
Survey Development
Similar to asking better questions during an interview, there is an art to writing survey questionnaires. Between tool selection, method, and structure, these variables can affect the response rate to your survey.
Readings & Guides
Observational Approach
In some cases, customers do not understand their pain point or workarounds that they themselves are using. By observing their behaviors interacting with physical or software products and other interactive moments, you can begin to identify the way in which a user relates to their environment. When you understand the moment in which they encounter the pain point or employ an alternative application of other product to solve the problem, an entrepreneurs can then further define a solution that fits the customer and market.
Readings & Guides
Tools & Templates
Interest Testing & Demographic Finding
Several tools can be used to test the viability of your idea and whether it resonates with a certain group of customers. You can accomplish this through a number of methods; however, in our current business environment, digital testing approaches are certainly the most common and frequently, the most cost-effective and time-efficient. An excellent, succinct overview is A Step-by-Step Guide to Using a Landing Page Test to Validate Your Concept by Aymeric Guarat-Apelli.
The following tools, which allow you to create in-bound interest via advertising, are frequently utilized by our HBS ventures.
Google Ads
Google Ads (formerly Google AdWords and Google AdWords Express) is an online advertising solution that businesses use to promote their products and services on Google Search, YouTube, and other sites across the web. Google Ads also allows advertisers to choose specific goals for their ads, like driving phone calls or website visits. With a Google Ads account, advertisers can customise their budgets and targeting, and start or stop their ads at any time.
Readings & Guides
Facebook & Instagram Ads
Facebook and Instagram campaigns can use the same photos or video across both platforms or unique creative for each. When you’re ready to use Facebook and Instagram ads together, either add Instagram to an existing campaign by editing the ad set’s Placement settings or set up a new campaign across both platforms.
Facebook Guides
Instagram Guides
Key Insights
Julia Austin shares her best practices for customer discovery processes and how to identify a potential unmet need.
End of Idea Validation, Part 1