From Concept to Conquest: The Art of Bulletproof Product Validation and MVP Creation

In the dynamic world of product development, where innovation meets market demands, the quest for success is a continuous journey. Amidst the clamor of competing ideas and the ever-evolving needs of consumers, understanding the principles of product validation and leveraging the power of a Minimum Viable Product (MVP) emerges as indispensable tools for achieving product excellence for international corporations and small startups.

Product Validation 101

Let’s begin with the basics. If you are an experienced Product Manager (PM), you can skip to the next section, but it still might be a good idea to review what you already know :)

Product validation is the process of ensuring that a product meets the needs and expectations of its target audience before it is launched into the market, and before millions are spent on product development. It involves a series of steps, including market research, user feedback, prototyping, and testing to identify and address potential issues early on.

Product validation is crucial because it:

• Reduces risks: It helps identify and mitigate potential problems before they impact the full product launch
• Optimizes resource allocation: It ensures resources are focused on features that truly matter to users
• Enhances customer satisfaction: It leads to products that better align with user needs and expectations

Some common misconceptions about product validation include:

• It's a one-time event: Product validation is an ongoing process, not a single step in development
• It's only for new products: Even existing products should be regularly validated to ensure they remain relevant
• It's expensive: Product validation can be cost-effective if done early and efficiently

As a part of product validation, an MVP is often developed.

Reid Hoffman, the founder of LinkedIn and currently a VC investor, has a great line about MVPs. He says:

If you aren't embarrassed by the first version of your product, you've launched too late.

In simple terms, an MVP is a stripped-down version of a product that focuses on the core features essential to deliver its intended value proposition.

Adding notes from my experience, more often than not, an MVP is the most simple version of your intended product for what users are actually willing to pay. While that might not be applicable to 100% of products & industries, it applies quite well for 90%+ of them.

You certainly can change the target user action from “pay for MVP” to “register on MVP” or even “click on an ad about MVP”. But, it is important to remember that the further you keep MVP users from the final target action (usually payment), the more disperse your results will be, and the less confidence in the results you will have.

I really love how Pawe? Huryn has put an entire post on this subject, so I’ll leave down a link to his post.

Starting with an MVP offers several benefits:

• Reduced development time and costs: Focus on essential features, minimizing time and resource investment (it is much cheaper to build an MVP than the ‘complete’ product)
• Early user feedback: Gather valuable insights to guide further product development (you might learn that the product you wanted to build is not needed in the market and instead come up with better ideas)
• Iterative improvement: Continuously refine the product based on user feedback (you will get much better insights on what to do next because this is what actual people “need” rather than what you, as a PM, “want”)

Now that we are clear on what product validation and MVP are, let’s delve deeper into how to actually do product validation and develop an MVP.

The Art of Bulletproof Product Validation

Market Research and Analysis

Before starting to collect user feedback on the upcoming product, it is often useful to research the market, and this typically takes two variations or a combination of both:

• Market and competitor research
• Audience research

While there are countless frameworks to analyze markets, my favorite ones are:

• Porter’s 5 Forces
• PESTEL Analysis

It is important that I will not be covering audience research here, as it greatly varies among industries and should be covered in a separate post.

Porter's Five Forces

Porter's Five Forces is a framework that identifies and analyzes five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths. First described by Michael Porter in his 1979 Harvard Business Review article, Porter’s insights started a revolution in the strategy field and continue to shape business practice and academic thinking today.

Porter's 5 forces include:

• Competition in the industry
• Potential of new entrants into the industry
• Power of suppliers
• Power of customers
• Threat of substitute products

While it’s a great tool for analyzing virtually any industry, it’s a comprehensive topic that is out of the scope of the current one, and I might write a separate post on this later also.

If you want to explore Porter's Five Forces further, you can read the following post:

PEST Analysis

PEST analysis (acronym for "Political, Economic, Socio-cultural, and Technological") describes a framework of macro-environmental factors used to analyze markets. It is a strategic tool for understanding market growth or decline, business position, potential, and direction for operations.

Recently, an extended version of PEST has been mostly used - PESTEL or PESTLE, which adds legal (discrimination law, consumer law, antitrust law, employment law, etc.) and environmental (weather, climate, and climate change, etc.) factors.

While some factors can safely be excluded from analysis for small firms (i.e., a new AI startup launching will not necessarily need to examine local environmental factors in details), they increase in importance as the firm grows in size to account for possible risks.

Also, it is important to note that whereas the PEST analysis is broadly used in business practice, it is helpful to explain market changes in the past, but it is not always suitable to predict upcoming market changes.

User Feedback Loops

Once the market research has been done, and data support your assumption about the potential demand, it is time to collect user feedback about their pain points. While market research and feedback collection (and later MVP development; depending on the type of MVP) are separate stages of the same continuous process – product validation, it can be done simultaneously.

The idea of feedback is that when an event happens, the resulting actions are observed or felt, which then modifies further actions.

Collecting and Incorporating User Input

This feedback loop is crucial for ensuring that your product aligns with user expectations and delivers a truly exceptional experience. Here are some effective strategies for collecting and incorporating user input:

1. Establish Multiple Channels for Feedback: Create a variety of channels for users to provide feedback, such as surveys, interviews, online forums, and customer support platforms. This diversification ensures that you capture a wide range of perspectives and opinions.
2. Actively Seek Feedback from Early Adopters and Potential Customers: Early adopters are invaluable source of feedback as they represent the initial user base. Engage with them regularly to gather their thoughts and experiences.
3. Analyze Feedback Patterns to Identify Common Themes: Once you have collected a substantial amount of feedback, analyze it to identify recurring themes, pain points, and areas for improvement. This will help you prioritize your development efforts.
4. Prioritize Feedback Based on Impact: Not all feedback is created equal. Prioritize feedback based on its potential impact on user experience and product goals. Focus on addressing issues that have a significant impact on user satisfaction.
5. Incorporate Feedback into Product Iterations: User feedback should not be siloed; it should be actively integrated into the product development process. Use feedback to inform product iterations, continuously refining the product to meet user needs.

Iterative Improvements Based on Feedback

The product development process is not a linear journey; it's an iterative cycle of learning, refinement, and improvement. User feedback plays a pivotal role in this iterative process, providing the necessary insights to guide product development in the right direction.

Here are some key principles for implementing iterative improvements based on feedback:

1. Embrace Change: Don't be afraid to make changes to your product based on user feedback. This demonstrates your commitment to providing a user-centric product and shows that you are open to new ideas.
2. Filter and Prioritize Feedback: While user feedback is valuable, not all feedback is equally valid or actionable. Learn to filter feedback and prioritize the most relevant and actionable insights.
3. Establish Clear Feedback Goals: Before seeking feedback, define clear goals for what you want to achieve. This will help you focus your efforts and collect meaningful feedback.
4. Communicate Feedback to Stakeholders: Share user feedback with stakeholders to ensure that everyone is aligned on the product's direction and the need for potential changes.
5. Close the Feedback Loop: Once you have implemented changes based on feedback, communicate the changes to users and gather their thoughts on the improvements. This closes the feedback loop and demonstrates your commitment to user satisfaction.

Prototyping

Once you have collected feedback from users, you are ready to start conducting tests and experiments. Experiments in this phase focus on validating how the market will engage with your product idea. One effective approach is the XYZ Hypothesis, i.e., “at least X% of Y will do Z”.

This way, you can test:

• Value proposition
• Viability (including pricing)
• Messaging

All experiments in this category can be considered MVP prototypes and pretotypes. Depending on your budget, the confidence levels you are looking to achieve, and the importance of development speed, some options might be a better choice than others.

Some of the approaches are listed below:

• Email campaign for potential customers (typically combined with a landing page)
• Paid ads campaign (test value proposition & CPC)
• Social media campaign (test messaging & value proposition)
• Landing page (gather leads, test willingness to pay; will require a paid ads, email, or social media campaign)
• Fake door or the mock sale (offer a nonexistent product; you will need to apologize later and offer something to the users who “fall in the trap”)
• Facade (typically for physical products; create artifacts of product availability while it is, in fact, limited)
• Pinocchio, a.k.a. “Pretend to Own” (create a non-operational product and imagine how you, as a potential user, would use it)
• Explainer video (self-explanatory; typically used with a landing page)
• Pre-order (allow users to purchase the product before it’s ready; allows to finance product development)
• Letter of Intent (informal interest in purchasing a product; not legally binding; most suitable for B2B)
• Provincial (test the product on a small local market before launching to a broader audience; suitable for services and physical products)
• One-Night Stand a.k.a "Pop-Up Store" (offering a basic product version for a limited time; suitable for services and physical products)
• Infiltrator (offer your product at another store to see if people are interested in buying it)
• Crowdfunding (provides evidence of market demand, but investors might not necessarily be target product users)
• Piecemeal a.k.a “Impostor” a.k.a “Mash-Up” (using off-the-shelf components and no-code / low-code solutions to simulate the experience of a future product)
• Concierge (performing personalized services of yet-to-be automated products; for example, manually creating personalized learning plans for users, instead of fully automating it on the MVP stage)
• Wizard of Oz (100% the same as Concierge – illusion of an automated product, with the difference that here users are NOT aware that behind the service is manual work, while in Concierge you do inform the user that it is manual work at the current stage)
• Single Feature Product (limited version of a product that satisfies only one customer need; more of a GTM strategy)

Pawe? Huryn has put an entire Product Validation Cheatsheet, so I’ll put down his link, and feel free to read the entire post on it there:

Once you have your prototype or pretotype, it is time for testing it and running A/B experiments. While by this point you might think that doing an MVP and testing it is a time-consuming process, the short answer is – yes, it is. However, building a fully-fledged product and then running experiments will take you at least 100x more of your time and budget.

To build a finished product and run tests you would spend, for example, $100 (actually it's usually in hundreds of thousands of dollars or even millions), having an MVP allows you to launch a simpler version of the product for $10 only, and you could run 10 tests simultaneously, which ultimately provides firms with a competitive advantage, as opposed to their slower peers.

Real-World Example

The above might seem like a “utopian world” showing how things “should be,” while the reality is different. However, there are plenty of examples of how top tech firms have utilized the product validation strategy successfully and became the market leaders. My favorite example among many is the Chinese firms, especially 字节跳动 , which is now one of the largest tech firms globally that shifted the power balance in the tech market.

While there are many factors in ByteDance’s TikTok success, one of the most important ones is:

Continuous and fast product iterations.

Below is a quote from WSJ’s article about ByteDance:

Chinese internet companies’ organizational efficiency is overlooked by their American competitors, say investors, engineers, and analysts.

‘They are totally killing it in markets where they need to constantly reiterate products to meet user demands,’ said Guo Yu, a former senior principal engineer at TikTok’s parent ByteDance Ltd.

The companies use data to drive every decision.

Former ByteDance engineers say ByteDance is one of the most aggressive in executing a strategy known within the industry as ‘horse racing,’ where multiple teams are assigned to build the same product or feature with slight variations. Once it becomes clear which version is performing better, the winning team is given more resources while the other versions are scrapped, these people say."

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Quite illustrative, isn’t it? While I haven’t worked at MAANG and cannot comment on whether these firms employ the same strategy, ByteDance’s growth, and many other Chinese tech firms, clearly show which strategy performs better (at least as of now).

Conclusion

In the ever-evolving landscape of product development, the journey from concept to conquest hinges on mastering the art of bulletproof product validation and MVP creation. We've explored the fundamental principles of product validation, emphasizing its continuous nature and the indispensable role of the Minimum Viable Product (MVP). The guiding philosophy is clear: understand your audience, mitigate risks, allocate resources wisely, align your product with user needs, and act fast!

A real-world example from ByteDance, highlights the potency of continuous and fast product iterations. The “horse racing” strategy, where multiple teams build variations of the same product, illustrates the efficiency and data-driven decision-making that powers Chinese internet companies, which helped them to shift the global tech power balance.

As you embark on your product development journey, remember that excellence lies in embracing the fast, iterative, feedback-driven nature of the process.

What of the above product validation strategies have you used?