From Idea to Evidence

November 12, 2024

A Practical Guide to Product Validation

In an era where roughly 95% of new products fail, validating your product ideas isn’t just good practice—it’s essential for survival. But how can traditional businesses validate product ideas without the agility of a startup or the resources of a tech giant?

The Cost of Assumptions

“The most expensive assumptions are the ones you don’t know you’re making,” says Teresa Torres, product discovery coach and author of “Continuous Discovery Habits.” This observation rings particularly true in traditional business environments, where established processes and past successes can create a false sense of security.

According to the CB Insights study, the top reason for product failure isn’t technical challenges or market timing—it’s the lack of market need. Companies spend valuable resources building products nobody wants, often because they skip proper validation.

A Practical Validation Framework

Based on successful practices from companies like IBM, Intuit, and Procter & Gamble, here’s a four-step validation framework that works particularly well in traditional business environments:

1. Problem Validation

Before validating solutions, validate the problem itself:

Best Practice Example: Intuit’s “Follow Me Home” Program
Intuit’s founder Scott Cook instituted a program where product managers observe customers using their products in their natural environment. This led to discovering problems customers couldn’t articulate in surveys or interviews.

Key Activities:

Customer interviews (aim for 15-20)
Data analysis of existing products
Support ticket analysis
Competitor problem analysis

2. Solution Concept Testing

Test your proposed solution before building anything:

Research Insight:
Companies using lightweight concept testing reduced their product failure rate by 37% compared to those who didn’t.

Methods:

Paper prototypes
Landing page tests
Competitor analysis
Wizard of Oz testing

3. Market Validation

Verify that enough people care about your solution:

Case Study: IBM’s Market Validation Program
IBM’s Enterprise Design Thinking framework includes a “Hills” program where teams must validate market size and willingness to pay before any significant investment. This reduced their failed product initiatives by 30%.

Essential Questions:

Market size estimation
Willingness to pay analysis
Competition assessment
Distribution channel verification

4. Business Model Validation

Ensure the solution makes business sense:

Research-Backed Insight:
Companies that validate their business model assumptions are 2.4 times more likely to achieve product-market fit.

Key Elements:

Cost structure analysis
Revenue model testing
Resource requirements
Scalability assessment

Common Pitfalls and How to Avoid Them

The Survey Trap
“Customers don’t know what they want until we show them,” said Steve Jobs. While surveys have their place, they’re often misleading.

Solution: Use behavior-based validation. Study what customers do, not just what they say.

Analysis Paralysis
Many traditional companies get stuck in endless analysis cycles.

Solution: Follow Amazon’s “One-Way Door” framework—if a decision is reversible, make it quickly with about 70% of the information you wish you had.

False Positives
Enthusiasm from a small group doesn’t always translate to market success.

Solution: Use the “Mom Test” developed by Rob Fitzpatrick—frame questions to avoid compliments and get real insights.

Practical Implementation Tips

For Traditional Businesses:

Start Small

Begin with one product feature or improvement
Use existing customer relationships for initial feedback
Leverage current communication channels

Build Internal Support

Document and share validation results
Create simple, repeatable processes
Train teams on basic validation methods

Measure and Adjust

Track validation success rates
Document lessons learned
Refine your process based on results

Real-World Success Story

Procter & Gamble’s “Consumer Is Boss” program led to the development of Swiffer. Instead of assuming they knew what customers wanted in a new cleaning product, they:

Observed customers cleaning their homes
Identified pain points with traditional mops
Created simple prototypes
Tested in real households
Refined based on feedback

The result? A billion-dollar product line that solved a real problem.

Conclusion

Product validation doesn’t have to be complex or expensive. By following a structured approach and learning from both successes and failures, traditional businesses can significantly improve their product success rates.

Remember the words of Eric Ries: “The only way to win is to learn faster than anyone else.”

References

Christensen, C. M., Hall, T., Dillon, K., & Duncan, D. S. (2019). Competing Against Luck: The Story of Innovation and Customer Choice. Harvard Business Review Press.
Torres, T. (2021). Continuous Discovery Habits: Discover Products that Create Customer Value and Business Value. Product Talk LLC.
CB Insights. (2023). State of Product Innovation 2023. CB Insights database.
Ries, E. (2011). The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. Crown Business.
Fitzpatrick, R. (2019). The Mom Test: How to Talk to Customers & Learn if Your Business is a Good Idea when Everyone is Lying to You. Robfitz Ltd.
Bland, D. J., & Osterwalder, A. (2020). Testing Business Ideas: A Field Guide for Rapid Experimentation. Wiley.
Brown, T., & Kātz, B. (2019). Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation. HarperCollins.
McKinsey & Company. (2023). Product Development Success Rates Study. McKinsey Quarterly.
Martin, R. L. (2022). A New Way to Think: Your Guide to Superior Management Effectiveness. Harvard Business Review Press.
Lafley, A. G., & Martin, R. L. (2013). Playing to Win: How Strategy Really Works. Harvard Business Review Press.