Let us be familiar with the Validation of market
Validation of the market can be described as the method of finding out whether there’s a demand for your product within your intended market. Validating your business’s concept can allow you to accurately predict the likelihood that people will purchase your product or service and if your business will succeed.
It’s crucial to confirm your idea at the beginning of the process of entrepreneurship. The process of gaining market validation can give confidence to investors, as well as banks that might be interested in financing your venture.
Below are the five important steps you can take to assess the market viability of your business.
1. Pen down your objectives, principles, and interpretation
In writing down the objectives of your company is the first step to validating your market. The process of writing down your vision will help you clarify the assumptions you make and help you define your ultimate goal.
You can ask yourself:
- What is the worth of my service?
- Who is the intended audience, what assumptions do I have about them?
- What is the difference between my product and similar ones?
- What theories do I have regarding my product, pricing, and business model?
The answers to these questions can assist you in communicating the benefits and distinguishing factors of your product.
2. Calculation of market depth and allocation!
Before you embark on your venture, calculate how big your prospective market is and what percentage of it you may take advantage of. This way you can assess the potential of your venture and justify the time it takes to launch.
Let us consider the statistics of the mattress market. In the early days–including the number of units sold annually and the proportion of the market dominated by foam mattresses, as well as the number of mattress retailers who were e-commerce companies. The new founders decided on which segments to target and concluded that they would be able to control just a few percentage points of the market share for mattresses.
This exercise is for the market you want to target. For similar products to yours, study sales statistics, the numbers, and share of manufacturers currently in the market as well as the proportion of the market that the segment you are targeting. Find out where your product is to the market and evaluate the amount of it your company might own.
3. Use Search Engine Optimization
Another method of determining the viability of your business concept is to look into the volume of searches that occur each month for keywords related to your product or goal. When people need an item or service, they usually make use of a search engine in order to find out what they can get from the market.
There are a variety of sources to research the volume of monthly searches, like MOZ. For Casper, one such search term could include “foam mattress”. According to MOZ, it is the most searched-for term, with more than 11,500 searches per month, suggesting a need in the market for this product.
If there are not much of searches for your product, you should use phrases that communicate the intention of the customer. The volume of searches for a specific, longer search isn’t insignificant. It can actually be used to support your theory that there is an interest in your product.
4. Perform consumer approval discussions
Interviewing your prospective market can be a good method of gaining insight into your product’s possibilities. This could include employing a market research agency to conduct focus groups or sending an online survey, or simply asking to speak with somebody.
Interview potential customers about their motives, preferences, requirements as well as the products they utilize. Revert back to the list you compiled during the initial step of the validation process for the market, and then frame any hypotheses or assumptions that you came up with as questions to the people you interview. Accept the feedback you receive, and keep a record of it for future reference.
5. Examine your commodity and diligence
If you’ve found a market for your product on the marketplace, make sure you’re putting the most efficient, user-friendly version out there. It’s possible to achieve this through beta and alpha testing.
- Alpha testing is the process where employees of an organization test an item in a controlled environment. The aim of testing alpha is to identify any issues, or bugs, that exist in the software before making it accessible to users outside the company.
- Beta testing is the process where a product is tested by a select group of external, real users who are specifically instructed to find issues. If it’s an application or software beta testing, the test may be accessible to the public, with a note informing users that the version they’re trying isn’t finished.