How to put together a customer validation framework for your ideas?

Like most people, some days I have a hundred ideas and other times I go for 100 days without a single idea that I think is worth spending time on.

The difficult part of these ideas is that many most of them are practically useless. They are not grounded in real problems, and are likely a means for the mind to play some games where it feels good to have some exercise for that moment.

Over the years, I have put together many frameworks for thinking about problems and ideas and categorizing them –

a) throw it away (meaning dont think about it any more),

b) file for later (meaning document it on my notepad, to review in a few years or so),

c) do some research (document the market findings) or

d) pursue it for validation (talk to people).

There are 5 steps that I take to understand whether the idea is worth pursuing.

The elapsed time for these 5 steps, in my experience lasts from a 4 weeks to 3 months on average.

Customer validation framework and process
Customer validation framework and process

1. The first step almost always is doing secondary research on the web using available resources. I have found that it is fairly easy to get a ton of “expensive paid research reports” by just typing the name of the market, followed by keywords like market, landscape, overview and then filetype:pdf in Google.

There seems to be someone always who has uploaded a recent report from a key investment bank or a analyst report that’s available for free.

During this step I try to document with the intent to publish my learning as a blog post. That’s key, I have found, to ensure that I do as comprehensive a job as possible. It also helps you in steps 2 and 3, as I will share later.

The best way to document is to be honest and write down a bunch of questions you might have about the market, problem etc. Summarize as much as you can, in your own words, instead of cutting and pasting.

2. The second step is actually having a discussion with at least 10+ “industry insiders” to help understand the questions where the data is inconsistent. It is important to have insider discussion before customers only because they will tend to see and know “trends”, whereas customers tend to give you their current problem or their sense of the workarounds, which they seem to think work “fairly well”.

To get to talk to 10+ insiders, you will need to offer them something in exchange for their time. Most insiders are fairly busy and tend to not want to help teach a new person the in’s and out’s of a new market. Here is where you assessment of the market and the 4-5 reports come useful from step 1.

I am consistently surprised at how many insiders have not read (they have head of it, but wont have read) a recent industry report on the space. The fact that I read them in entirety and can provide a Cliff notes summary is very valuable to them.

3. The third step is to get a good sense of the market size. Since most of the research reports will give you a total market estimate, top down, as opposed to an addressable market, bottoms up, number, I find it valuable to do some empirical evidence gathering for the bottoms up analysis.

The best ways I have tried to do this is getting proxies for the market size – Google search volume is a good indicator for certain types of markets, or in other cases, create a series of blog post on LinkedIn and see the traffic volume, try segmentation numbers with Facebook ads etc.

If you are up to spending some money to recruit potential customers and get some email conversations, I’d recommend Google Ads as well.

4. The fourth step in my process is to clarify and crystallize the problem and solution and get primary feedback online – I have found Launch rock for consumer applications work well for this. Create a simple page and drive traffic – either with ads or social and get a sense for interest.

For B2B, just offering your summary of the research on the market as an eBook (from step 1) will suffice to get emails of potential prospects. This also helps you build a target list of customers.

5. The step five is actual customer interviews. This is the most time consuming step and takes a lot of effort, which is why I end up doing it last. I would recommend doing it earlier, if you want to get a quick sense of the market, and maybe you might end up doing it all along, but this is a very intensive process, so I end up breaking it up into chunks and doing it all along while I am going over the steps 1 through 4.

For customer interviews, I try to address the problem question and the adoption question. 

  • Is this a real problem? Is is a big enough problem for them to look for a solution?
  • What will it take for them to adopt a solution? Adopt my solution?
  • How much will they be willing to pay to adopt?

These questions help me address both the solution and the go to market problems of marketing and pricing.

There are some caveats to my process and methodology:

1. This does not have to be a waterfall approach. The agile version will ask you to keep doing these 5 steps in parallel and keep doing them consistently. Just because you are following an agile process though, does not mean you dont have a list of steps to follow.

2. These steps work very well for software. What I found for IoT hardware is that a Kickstarter campaign works better for a hardware idea to supplement step 4.

3. For consumer facing applications and eCommerce companies, there is no substitute for putting a framework page and putting a buy button (instead of LaunchRock, use Shopify – free version).

4. Document, document, document. The more you write the more your thoughts get clarified and you have new insights. Only listening to customers and insiders is useless. Thoughts come, you process them, and you forget more than 50% of the insights.

5. Be very cautious and deliberate when you go from one step to the next. 90% of ideas and problems are really not worth pursuing, unfortunately. You are better off discarding your half baked, insolvent ideas, instead of wasting 6-12 months pursing it, only to realize you dont quite have a real market need.