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Validation is the last step, not the first.

Updated: Sep 22, 2022

The question that we hear the most at The Scientific Startup is: “Can you help us validate our product?” The answer we always give is “yes…eventually.” While certain startups in our pipeline are ready for in-market validation, many are not. This question typically indicates an issue with the product, funding, or traction that a founder wants to solve. In other words, this question means, “Can you help us get more traction?”.

Some common situations that lead to needing “validation” are:

  1. Market research shows a problem, but customers don’t want it 🤷

  2. Customers have a problem, but there is no market to sell a solution. 🌎

  3. Adoption is low. 💸

  4. Funding isn’t flowing. 🏦

If these problems lead you to seek “validation,” that is completely understandable! The resources that are out there for most founders strongly encourage (1) seeing a problem, (2) building an MVP, and (3) tossing it into the market for validation, with very little information about what happens before the build. That’s why we exist!

In this blog, we’ll talk about the Discovery Process and why it should happen before you attempt to validate your product.

"I don't need discovery." 🤦‍♀️

Revisiting the Discovery Process sometimes feels like a step backward, especially if you have already invested time in creating a prototype and business model. Still, it is something that can help prevent a lot of the common problems addressed above. Proving that you have concept-market fit leads to an MVP that is more likely to thrive in the market, with a faster adoption rate. That being said, revisiting Discovery doesn’t mean that you have to start over completely, nor does it need to take six months, but it does need to happen.

Still not convinced that you should invest your time in Discovery? Rob Fitzpatrick, the author of The Mom Test, said it best:

If you hustle together $50k to start your business and spend all $50k on your first idea only to see it fail, that’s bad... On the other hand, if you have $50k and spend $5k to learn you’re running down a dead end, that’s awesome. You can use the rest to find a viable path to your goal.

At the Scientific Startup, we believe conducting a thorough Discovery Process and creating an MVC is a way to save time and energy during your entrepreneurial journey.

What is Discovery?

Simply put, the Discovery stage of company-building is when you determine the (unmet) needs of your customers and the behavior of the market. By identifying the problems your customers need solved and understanding how the market is behaving in your space, you are far more likely to develop a concept that the world is ready to adopt.

That being said, this stage can be a bit intimidating for many founders because there is a chance that their initial ideas aren’t what people need, want, or will use. While frustrating, learning quickly that your idea needs refinement allows you to pivot towards something more valuable to your customers without burning through all of your capital. A thorough Discovery Process helps you learn faster and make smarter decisions for your business.

What is Discovery? Why is it important?

Successful Customer Discovery requires a mix of top-down (market) research and bottom-up (customer) research. Most founders seeking capital focus on market research (top-down) and skip over the customer work entirely. While having some market data can help you draft a pitch deck with your TAM/SAM/SOM, it only gives you a bird’s eye view of what is happening. How is a top-down view dangerous when developing a concept for your startup?

To give a simple example, let’s say you observe that the adoption rate of a popular investment app is declining rapidly. You see an opportunity to introduce a better product in the market, so you kick off market research. You find that people are slowing down on investing due to market conditions, there was a breach of privacy within the app, and the company recently swapped its CEO due to a negative PR release. These all seem like problems you could solve with your product, so you start building.

Six months after your launch, you see the same trend with your product, and you have no idea why. You used all the available market data, understood the trends, and fixed the issues you found in your research. You frantically start talking to your customers to figure out why they have stopped using your app, and you find out that the attrition rate has nothing to do with the competitor’s issues above. Your customers want to use a product that allows them to invest in causes they care about instead of ETFs. And now, it’s back to the drawing board. You must completely change your product's back end to save a rapidly sinking ship. Ouch.

Now imagine if you would have combined the market learnings with some early customer conversations. Not only would you have been able to make minor product tweaks that make your company appear stronger than your competitor, but you would also have been able to create a whole new investment structure that met your consumer's needs. Building a product that people need is a surefire way to save time and money in the future - be it through rebuilds, pivots, or long validation processes.

Some Quick Tips for Successful Discovery

While we work with founders 1:1 on how to draft a Discovery plan for their companies, we want to give you a few quick steps to follow as you think about implementing this process into your company. The following tips are meant to give you a bit of direction and are not entirely comprehensive.

Step 1: Market Research. Market research should be much more than market sizing and SWOT analysis to be effective.

  • Examine your competitors, their investors, and their customers. What trends do you see? (Your competitors' investors might be interested in you, as well).

  • Do a STEEP analysis. Look at the societal, technological, environmental, economic, and political trends in your space. Will your product be regulated in the future? Can you piggyback off of the momentum of a political shift? Will a changing economic condition affect your customers’ ability to engage with your product?

  • Market sizing - TAM/SAM/SOM.

  • Social listening - this one is new for most people. Check out Twitter, Podcasts, Social Media, and conversations on the street. Listen to what people say in the wild, not just in a report.

  • Who is your audience?

Step 2: Customer Research. Talk to potential customers about themselves, not your product, which is the step many founders skip.

  • Catch up on the Jobs to Be Done Framework - it’s beneficial at this stage! The premise is that customers hire a product to complete a job. Just like an employee that performs poorly gets fired, products that perform poorly are eliminated from the market.

  • Reach out to 10-20 potential customers for a 30-45 minute conversation about their lives, behaviors, engagement with products in your space, pain points, and the “jobs” they want to accomplish.

  • At no point in the conversation should you mention your product or idea. Just listen and take notes. After a few conversations, strong trends will emerge (we promise).

Step 3: Analyze your findings.

Synthesize your market and customer research - make the qualitative information as quantitative as possible. Find the major trends, count up how many times they appear, identify key personality traits for personas, etc. It is particularly helpful to see where the trends converge and diverge. A strong product is developed at the intersection of what the customer needs and the market is ready to handle.

Step 4: Revamp your concept

Your initial idea is likely “close but not quite.” You may have discovered that you need to prepare for political regulations or that your customers don’t use the product how you thought they did. This is the best possible outcome of Discovery! You now have a data-backed approach to your product pivot. You can confidently tell customers that you met their needs and demonstrate to investors that you conducted your due diligence when designing your idea.

While many nuanced details go into the Discovery Process, we challenge you to reflect on your current launch plans. How many of the steps above did you take when you began to build your MVP? It’s never too late to have customer conversations or take another deep dive into the research; the results will speak for themselves.

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