7 Steps For Validating Product-Market Fit Before Building an MVP

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Agile Insider

8 min readSep 5, 2019

You have a great idea. But you need to validate the product market fit before you move forward with investing in building the first iteration of the product. This post explains one of the many ways you can do that.

Product market fit isn’t a new concept. Yet, it’s one of the hardest things to achieve. You come up with a great concept, maybe something that either doesn’t exist or is a 10x iteration on an existing product. But before you move ahead with any sort of investment, you’d want to make sure that the product is what a consumer would want to pay for.

I’m going to cover how to validate a product idea and draw examples from a great concept test that was run on Alpha’s rapid consumer feedback platform.

What Is Product-Market Fit?

This is what Marc Andreessen has to say about product-market fit:

Identifying a compelling value hypothesis is what I call finding product/market fit. A value hypothesis identifies the features you need to build, the audience that’s likely to care, and the business model required to entice a customer to buy your product.

Achieving this involves conducting due diligence, identifying what needs to be solved, who it needs to be solved for, and whether those customers would love the product enough to not only buy it but recommend it to their peers (and probably even to strangers).

You Understand The Problem, Now What?

At this point, I’m assuming that you already know the problem statement, and your target audience, and you have an idea about how the solution might look like. You want to move ahead with an MVP but before investing, you want to make sure that you and your audience are on the same page. Just because the problem exists doesn’t mean that everyone facing the problem would embrace a solution no matter how it looks like or what it may cost.

Step 1: Prioritize Your Hypothesis

When you set out for a new product concept, you’ll have a central hypothesis and a lot of secondary and tertiary hypothesis based on your discussions and interviews with the potential users (or users of an existing product in case the new idea is a spin-off).

At times, the sheer number of hypotheses might become unmanageable. It’s essential to understand the ones that, if nullified, would risk the business and the product going down.

Below is the central hypothesis (rather should I say the burning question) that was tested through Alpha.

What would be three critical hypotheses that need to be true for this concept to stand?

Caregivers are not with their loved ones most of the time.
The loved ones (people being looked after) are not extremely privacy-conscious.
The caregivers have enough disposable income to purchase and maintain one such product.

You can come up with ten other such hypotheses, but we can’t test so many with users, at least not in a single go. Users get frustrated if they are asked to take even a 1-minute survey. That’s why the hypothesis prioritization is so crucial. Among the three I described, negate any one of them and the concept doesn’t stand.

Step 2: Prioritize Target Customers

Now that we have a bunch of hypotheses, it’s time to narrow down on the customer segment to determine who you should test this concept with. ~17% of Americans are over the age of 65 years. Every caregiver for those Americans could be your customer. And, I’m just speaking about America. This demographic across the world would be much bigger.

So, narrow down your first target segment. It could be by income level, privacy sensitivity, technology adoption, internet penetration, or whatever other criteria that you deem fit for this purpose.

Having this smaller sub-segment serves a few purposes:

You’ll have a better understanding of that user group. If you target everyone, the sheer scale of the test can be overwhelming.
You’ll spend less time gathering the feedback. And gathering the feedback can involve spending a large amount of money on advertising, referrals, etc.
You can create the product for that sub-segment specifically, so that adoption is higher, and then expand gradually.

Step 3: Define Success Criteria

Once the hypotheses to be tested are determined and the target segment has been narrowed down, it’s time to define what success looks like. This provides validation to the bottom-up market sizing you would have done while understanding what the market size might be.

Let’s take the above three hypotheses:

These success thresholds are nothing but the assumptions you had taken during the market sizing exercise. The sample size for the test should be big enough to give you a good understanding of how the chosen customer segment is responding. This test will validate two things:

The product-market fit.
How big the immediate market is?

Step 4: Sketch Mockups For Each Hypothesis

This is the part where you should create mockups in a way that validates the hypotheses.

Let’s take the first one: Caregivers are not with their loved ones most of the time.

The landing page should be able to validate this hypothesis. Look at the following mockup:

I have a Call-To-Action (CTA) here “See our solution.” The hypothesis would be validated if the following formula holds true:

{No. of users clicking on “See our solution”} / {No. of users landing on the page} ≥ 0.7

But let’s not stop here. You can either have a fixed solution in mind or you can pose an open-ended question to gather what consumers actually want.

The following image is a prototype that Alpha’s Design Network created to show users a mockup landing page of the product and test how many of the users landing on this page would actually be in favor of the proposed device.

They went on to describe the features of the product.

You can either go this way (i.e. this will be the page shown when a user clicks on “see our solution”) or you can do the following:

This allows us to gather accurate feedback since we’re not putting a bias in the consumers’ heads by showing the mockup of a device initially.

The other two hypotheses can be tested through this mockup by adding another CTA — a text box for submitting email addresses and a button saying “Pre-book for Free.”

The number of users entering their email can help us understand how many are among the privacy-conscious group (since the privacy-conscious ones would just bounce off from the page) and whether they have enough disposable income to buy such a device (with an assumption that users understand the price range of the product in discussion).

Step 5: Identify Additional Things You Want To Learn From The Audience

You can further try to gauge the users’ opinion on pricing and other topics by posing additional, end-of-survey questions such as the ones created by Alpha shown below:

Although, I’d keep such extensive answer questions to a bare minimum so that our hypotheses get tested and users don’t get frustrated by too many questions.

Step 6: Prototype It Up

This is when the design teams come into the picture. You need to hand over the mockups, that effectively speak about your vision, to the design team and let them work on the prototypes.

The snippets I had shown earlier, and the ones shown below, were designed by the Alpha team to test the caregiver product concept:

Again, the prototypes would depend on what you want to achieve, whether you have a specific product design that you want to test or you want to keep it very general and gather as much market validation as you can.

Step 7: Identify Test Channels

This step is as crucial as the previous ones. At this stage, you are trying to minimize the expenses and gain as much learning about the concept as possible. Hence, you should be innovative in this part.

The test channels serve as the first stage of the funnel. You should ensure that the leads (users) going in are the ones you actually want to go in. There are multiple ways you can ensure this:

Focus groups
Targeted ads
Specific LinkedIn/Facebook groups
Community centers

You can also decide to get more creative and find ways such as the one below:

What’s interesting about the above picture is not the fact that the truck is running through the streets with a phone number as a CTA that entices users to call and allows the advertiser to validate the hypothesis.

Think where that truck would end up throughout the day — trucks like this mostly carry cables or raw materials for renovation. So, it’ll be in or near a neighborhood throughout the day. That increases the chances of the advertisement being spotted by potential caregivers (or, in this case, ones whose loved one struggle with stairs). The channel being offline, this also increases the sample size who search engine ads can’t target. Additionally, the truck most probably belongs to a local company whose negotiation power is lower than other traditional ad publishers.

All of these increases the sample size while keeping the cost low.