One month after the commencement of the Buni Internship program, interns have successfully managed to form ideas and performing initial development phase. This week, it was time for them to go and validate their business ideas to their target market. Now what exactly is customer validation?
Customer validation is the phase of the Customer Development model where you obtain hard evidence regarding the possible success of your business model. You cannot just assume that customers will buy your product – even if they tell you they might! Dealing in hypothetical scenarios does not help you affirm whether you have a solid business plan. This is why you must validate all of the information that you think you know.
Customer validation proves whether your assumptions are correct before you spend too much money. This is essential for the process because it is what sets it apart from any other type of development model. According to Steve Blank, the reason that too many businesses fail is because they work based on their assumptions. Many businesses either do not know how to validate their knowledge or skip the process all together. If you do not validate your knowledge, you only push failure off into the future.
Customer validation helps you avoid building a product that no one wants. This is because it forces you to get out of the building and talk to real customers. Talking to your friends, family, industry companions and employees is fine. But they are not thinking like your customers do. They all have a vested interest in your and your business and want to see it succeed. So naturally, they do think that you have a great product.
Your friends, family and acquaintances may not actually be members of your target market. Asking their opinion is hazardous because if they think that your idea is not worth much this can be damaging to your confidence. If they are not natural customers of yours, they have no idea how much your idea is worth because you’re not solving one of their problems.
For these reasons, it is essential to get out of the building. Directing your efforts at your target customer base is more effective for your learning than talking about your product with people who might not even have the problem your product solves.
Another key benefit of the customer validation step is that it allows you to change your methods early. Iteration is key in this model and it is okay to get it wrong. Failing early is better for you because it gives you the opportunity to try again. If you fail before you have launched or shipped, you will have inevitably have spent far less money than you might have otherwise.
Finally, customer validation tells you whether customers will really buy your product. Hearing customers say that they would buy your product is nice but it is ultimately meaningless. Your customers need to actually put their money where their mouth is for this sentiment to be worth anything.