“Everybody has a plan until they get punched in the mouth.”

Mike Tyson makes a painful point we can borrow in the innovation arena to achieve market success with market validation.

Achieve market success with market validation.

In our previous post, we wrote about how to validate your market research with a scorecard to build confidence in your idea. The Market Research Scorecard (“MRS” /ˈmɪsɪz/ for short) mitigates confidence bias attributed to a combination of assumptions and other people’s data. Unchecked biases could cause you to miss finding the product-market fit, ultimately resulting in a costly market failure.

We glossed over a few steps about who this is for and when to use this. So we’ll provide more context and guidance around the MRS and how it can help you achieve market success.

Start with a Mindset of Constant Validation

So you have an idea. Like most companies, you’ll immediately build a business case and marketing plan based on your market research. Here’s the problem with this order of operations: you interpret market conditions to be market validation. It’s a common mistake to conflate the two. For example, the penetration rate of smartphones (a market condition) does not mean that people will download your mobile app (a market validation). Trust us, you cannot bend the market to the will of your PowerPoint.

Abandon the business case and marketing plan at the start. Begin with the MRS instead.

We designed the MRS to identify where validation areas are needed to support your hypothesis: IF I build <THIS>, then people with <BUY> it. First, list all the “what must be true” insights/statements that support why this hypothesis is correct. Identify the beliefs that give you confidence people will BUY your product. After you list the “what must be true” insights, evaluate each of these statements (refer back to our first post on the MRS method). Statement scores less than 6 are what you need to validate.

The process of validating a hypothesis follows the Scientific Method. You make an observation, formulate a hypothesis, build an experiment, and gather results. Validation is the mindset you should have about the MRS.

Let the MRS guide your next steps to Meet-the-Market

Draft-zero may have all ‘0’ scores. That’s perfectly ok*. Draft-zero is the launching pad to design your plan to “Meet-the-Market”** to validate your hypothesis through customer interviews and experiments. With new insights, update your MRS with significant, fact-based, relevant primary research. With more validation, you are more confident that you are building the Right It, aka finding product-market fit.

The MRS is a living document and should be updated as you gather more reliable data (notably, your own data).

To illustrate the MRS in action, we developed the Miss x MRS, a series of case studies where we evaluate ideas for their market viability. In this case study, we demonstrate how the MRS could have helped validate Quibi’s hypothesis — whether their new mobile video streaming startup is going to be a hit or miss.

Quibi hypothesized that a partnership with T-Mobile would generate a substantial customer base. That statement scored a 3 because it’s a prediction/assumption, not significant and not relevant to the hypothesis. This low score of 3 represents an area of validation. To strengthen that statement, what if Quibi forged a guaranteed contract with T-Mobile? Now a validated statement reads: “T-Mobile agreed to purchase 1M subscriptions at $4.99 as a give-away to its customers for a year.” This statement scores a 6 — the highest score possible. You have a buyer who buys what you built — this is the perfect validation of the hypothesis.

By the way, a deal with T-Mobile would have grossed $60M out-the-gate, much better than what they have now.

Who Should Consult the MRS

• If you have an idea that you want to turn into a viable business, use the MRS.
• If you’re a stakeholder responsible for approving funding for an idea, you should evaluate the proposal with the MRS.
• If you’re an investor, you should assess a prospect using the MRS. The MRS will separate assumptions and facts. The MRS will inform your investment strategy. Maybe the pitch deck is exceptionally bullish on revenue projections. The MRS can identify the areas-of-validation where more discovery is needed.

* If your Draft-zero scores is a 6 at the start, you’re probably not doing anything innovative. It likely your product idea already exists.

** Meet-the-Market: the process of gathering primary, current, relevant insights by conducting first-person interviews with the customers in your selected market.

Extra Extra!

• Download our free Market Research Scorecard template to analyze your market research, insights, and assumptions. We invite you to leave a comment below. We want to know how you used this tool and its usefulness.
• Want to learn more about the MRS? Read our follow up post here.
• Sign up for our free MasterClass: How to Spot a Good Idea.
• If you need a discovery session, get in touch with us at connect@duoduo.studio.

About DUO Studio

We are Tam Lisa Danier & Hanna Phan Friend, two Design Thinking Innovation Strategists and Creative Coaches. We are future thinkers, helping companies build the next great thing through creative problem-solving.