Validation Experiments
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Validation Experiments

At this stage you have spoken to a lot of people about a whole bunch of different problems and ideas, you have honed in on just one problem that you think is within your strategic focus to solve. Then you have run design sprint/s and are feeling like you are onto a winner. How exciting!!! That is HUGE progress already 🤯

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Now it is time to discover how much interest there really is, because 'everybody lies' so how can we prove that people who say they are willing to buy something are actually willing to buy something?

There are only two ways to do this (1) get them to buy the thing or (2) get them to think they are buying the thing.

There are 3 experiments you can run to determine this:

  1. Concierge
  2. Crowdfunding
  3. 404

Concierge

A concierge experiment is simple and very accurate. Whatever you think the produce or service would do in theory you get them to pay you to do it in real life. This experiment is not always possible but it is the best experiment to run if you can. As an example, WipeHero's value proposition is an on-demand car wash at your location so instead of building anything or hiring anyone you can just give them your mobile number and say text me the location and time and your car will be cleaned, no app, no booking form. This streamlines the process and forces the customer to either buy or not.

Crowdfunding

Within crowdfunding, there are 'all or nothing' campaigns that give you the ability to send all the people you think are early adopters to the one page and if they put in their credit card details then they are pretty well validated as an early adopter. The catch is that no money needs to be actually taken because an 'all or nothing' campaign only triggers payments if the crowdfunding goal is reached, which you don't need to do in order to validate early adopters. Using crowdfunding as an experiment has the additional benefit that if it goes very well you can raise some capital in the process, however, it is important to focus on the experiment results as the first priority.

404

A 404 experiment is similar to the crowdfunding experiment in that you can drive all the people you think are early adopters to a landing page and ask them to put in their credit card details only instead of the product/service at the end of the payment process they reach a 404 page saying that the solution is still being developed and no money was taken nor was the credit card details stored. This experiment is riskier than both the concierge and crowdfunding experiments because unless done properly your early adopters will feel cheated but sometimes there is no other way.

When validation experiments are impossible

There are cases when all three of these types of experiments are impossible, in those instances you want to push to get at least a letter of intent, which is just a signed piece of paper saying that your customer will purchase the product or service if you make it. Just be warned that when this approach is taken the risk of moving forward increases and the founders and investors need to be aware and on-boarding.