How we validated our market hypothesis at Onethread!

Building a business is a complex game. More often than not it is aligning different activities. You have the tech side where you start with an MVP and then work your way towards making the full product. But then again you can't just build the product in isolation, you have to market it as well.

You need to understand how to navigate the process in the best possible way. You have to reach out to the right audience to make sure you get the right feedback and then only you can build the right product.

Here is a quick framework that has recently worked well for us at Onethread to trim down on the noise and find our own niche. This took a lot of iteration. So hopefully you don't have to go through the same trial and error that we had to go through.

1. Choose a niche:

It might sound intuitive but it is pretty hard to do especially if you are playing on a big TAM (Total Addressable Market). It is fine if you can't find one niche from the get-go. What you can do is talk to a lot of people and then instead of listening to all of them blindly note what their feedback is.

Once you have all the feedback noted down, you can then go one of two ways. Either build for the most lucrative set of users or you can cater to the group whose problem statements resonate with you the most. For example, at Onethread, we had the option of building for manufacturing institutions who'd be willing to pay the big bucks but we opted for agencies because we felt like our feature regarding project management is most suitable for them. Also, we realized that our price points are a huge advantage for the smaller companies.

If you can find a niche where you think that your solution has a chance of working out, you can now just be razor focused in terms of getting their feedback.

2. Take time out to talk to potential users:

A lot of people I have seen will get an idea from something and then start with building the MVP. Once the MVP is ready, they proceed with paid ads and aggressive marketing. While that can work out at times, most times this will lead to a complete lack of understanding of the market.

Especially relevant for B2B is that you take time to talk to your customers. If you are a founder, please try to attend as many discovery calls as possible. Even if you can't convert them to users, you need to understand where they stand. You will get a very nuanced understanding of the problem and the market.

But more importantly, it will help you build the most suitable product. Please remember that your job as a founder isn't to build the best product, it is to solve a problem. As you talk to more users, chances are high that your understanding of the matter will also change even if it's slightly. Your product roadmap must reflect those feedback. Then you will have actual happy and sticky users.

3. Diversify the people you talk to

This might sound counter-intuitive as I mentioned beforehand that you should be focusing on a niche but this is from a different angle. There is a tendency among founders that always talk to our close people. While that can have some good aspects to it, it limits the scope significantly.

As we are building a global SaaS at Onethread we started locally. We talked to only small companies that had a set of workflow. But we were constantly worried if foreign agencies and larger ones would have similar workflows. That was fundamental because otherwise, we'd have not built it for the larger audience in our niche.

Then we started to reach out to foreign agencies and our delight, we found out that they have similar pain points to manage their workload and they want something simple and affordable to use regularly. Now we have users from the UK, Germany, Singapore, etc. so now we can move more aggressively in the market very easily.

In larger companies and agencies, we realized the case was almost similar but to cater to them, we have to slightly tweak our product roadmap. This was a crucial bit of info that has helped us modify the roadmap and pitch to lock those big players in the market.

4. Having users who are willing to pay

In a world where everything is derived from growth, it is hard to ask users to pay as there is always the risk of churn. But you can't ever truly understand the value of your product unless you ask your users to pay.

We had an early base of users who just wanted to give us feedback. While that was helpful to build the product, we never knew if the value is strong enough for people to pay us. It was a difficult challenge but we lessened our Free Trial to 14 days just to make sure that if you are using the product regularly, you are a paying client.

The confidence you get from a user actively paying for the product is unmatched and it just shows that you are providing value. If you can replicate that a few more times, then you have something great in your hand most likely. For us, the biggest boost was when we were able to sell our yearly license, it gave us the indication that now we are truly ready with an amazing product.

If you have any feedback for us on how we can improve even more and give you a better experience we would love to hear that. Feel free to explore more at Onethread