Stage 2.0: Idea Validation, Part 1

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

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 (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.

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