6 Steps to Product Validation

November 22, 2017

Brian Beattie

One of the most expensive mistakes that B2B software vendors make is developing products that customers don’t want. In order to mitigate this risk, top performing software companies have processes in place that are designed to reduce the amount of money spent on products that have not been validated by the market, and to catch potentially costly missteps early on.

At Volaris, one of the best practices that we encourage across our business groups is known as establishing a Special Interest Group (SIG). These are a handful (3-5) of early adopter clients that serve as testers and collaborators throughout the development process. If a business cannot find at least a handful of customers willing to invest in the product idea, it is usually a sign that the company will have difficulty finding customers down the road, and should therefore, re-evaluate the concept. The SIG process tends to work well with mid to large enterprise customers. This model does not always work for smaller ticket items since there is less incentive to participate.

The SIG Formation Process

At Volaris, we typically follow a 6-step process in order to build a SIG.

1. Observe customers
Frequent customer visits are an important part of Volaris’ development process. Watching end users at work—whether this includes interacting with our products or not—gives us great insight into their work processes, frustrations, and workarounds. These pain points are often the best starting points for new innovations as the best products are designed to solve specific problems.

2. Surveying key customers
We start by creating a 20 question multiple choice survey that is designed to gauge interest in the product concept. Two critical questions are embedded in this survey. The first question is whether these SIG members would be interested in such a product. The second question is whether they would be willing to pay for it.

3. Conduct a pricing and timeline assessment
At this point, we will have a clear sense of whether there is a market for the concept. If little support has been garnered, it is time to nix the idea before investing any more time and money into the project. However, if at least three customers are willing to invest in this new product, there is evidence that this idea has resonated well with the end users.

4. Launching the SIG
Launching the SIG consists of: discussing customer pain points and processes, reviewing the potential functions and features of the product, creating a use case and going over the details of the SIG process with all the SIG members. At this point we are able to come up with a roll-out plan, finalize pricing and contracts and close the ‘sale’ with the SIG members.

5. Getting a minimally-viable product (MVP) to SIG members ASAP
This step is key to conducting a successful SIG. The MVP is a beta version of the product that includes most of the key functionality and a few features we may want to test out. At this stage, the product’s design and functionality is not completely refined. Once the SIG members are using this initial working prototype, it becomes an iterative process of idea generation, testing, data collection, analysis and learning.

6. Hosting periodic check-in reviews
It is crucial to schedule regular follow-ups with the SIG members during this process. Setting milestones and keeping developers accountable to a set timeline will help ensure a smoother SIG process and a timely delivery of the end product.

There are a few things to consider during these regular check-ins:

Which features the SIG members are using most often
Whether or not there are there any work-arounds that need to be implemented when using the product
Whether or not the product is user-friendly and intuitive

Benefits of Product Development through SIGs

Using SIGs for product development allows vendors to receive cash upfront and capture valuable customer feedback. Furthermore, SIGs provide a strong reference base when the final product gets introduced to the broader market. Consumers also reap the benefits of having first hand input on the product’s design and functionality. They also get “first dibs” on the new product, and receive a functional product at a significant discount.