Market validation: Forget friends and family!

  • ‘Concierge MVP’ technique helps startups test their solutions
  • Discards friends and family from validation process
Market validation: Forget friends and family!

YOU had a great idea, you established a team around it, and developed the product. To test market viability, many startups go to the people its founders already know, kind of like a toe poke into the water: Friends and family.
That’s the completely wrong way to do it, according to Code cofounder and chief executive officer Zafrul Noordin. Such a ‘target audience’ lacks objectivity.
“Your [actual] target audience and early adopters should be involved in the validation process – these are the people who would actually buy your product,” he told Digital News Asia (DNA) in Kuala Lumpur recently.
Code is the official regional partner of the Lean Startup Machine (LSM), a global movement dedicated to educating and training entrepreneurs on The Lean Startup methodology.
One of the validation techniques used by LSM is the ‘concierge minimum viable product’ (MVP), where startups deliver their solutions manually and test customer satisfaction during the early stage of product development.
“It’s sort of like going manual in the tech world, using the least amount of technology when it comes to validating business ideas,” Zafrul said, adding that some people have called it the ‘Wizard of Oz’ technique.
“In our process, we discard feedback from friends and family due to their lack of objectivity. You can still talk to them, but they should be excluded from your data set,” he said.
According to Zafrul, startup founders can conduct experiments with a very small set of customers, ranging from 10 to 20.
“It allows you to have empathy for customers, where you can actually understand what they go through and how they would use your product.
“That will help you to build a better product. That’s how we teach them. This is one of the techniques from the Lean Startup,” he said.
Zafrul claimed that with the ‘concierge MVP’ technique, the startup can bring its product to market within a week because of the quick feedback.
“To validate your product, you need to go the market quickly so that you can learn, get quick feedback, and iterate your product.
“Speaking to mentors or advisors can only bring you so far – market validation is crucial in order for you to have a good product,” he said.
Not sexy enough?
Market validation: Forget friends and family!Zafrul (pic) conceded that the concierge MPV technique is not commonly practised in Malaysia.
“It’s not common in Malaysia because people like to go ahead and build an app first, skipping the manual process because it’s not sexy,” he said.
However, this is beginning to slowly change, and this kind of market validation culture is slowly seeping into the Malaysian ecosystem, according to Zafrul.
One startup that has exhibited such thinking is Kaodim, a Malaysian on-demand services marketplace which matches users with vetted and verified service providers such as plumbers, cleaners, electricians and photographers. The startup raised a US$4 million Series A round in November.
“We had a Lean Startup Workshop last month where we had the Kaodim team talk about their market validation method,” said Zafrul.
“They explained how they started, and it was all manual for them – they did the concierge solution.
“The point is, you do things manually first, and you will get the clarity you need when you run the business later on,” he added.
Marching on
Meanwhile, Code – which started as a gamification startup but later pivoted into LSM – is gearing up for 2016.
It intends to run LSM workshops across 14 markets in Asia next year. “As the regional partner for LSM, I want to see all 14 markets in Asia fired up in the first quarter of 2016,” said Zafrul.
It is also gearing up for the next phase of the Project Brainchild programme, which was designed to empower staff at government-linked companies (GLCs) in Malaysia to pursue any innate wish to be entrepreneurs, but at an accelerated timeframe using methodology borrowed from the startup world.
The second batch next year will be open to non-GLCs, and Zafrul and his team are rigorously selecting suitable participants.
He said that he is also working on a project in Malaysia to get varsity students involved in startup projects, although he declined to elaborate.
Related Stories:
LSM Kuala Lumpur makes an impact
Code Army official regional partner for Lean Startup Machine
2yrs and a pivot later, Code Army marches on with Lean Startup Machine
Batch 2 of Brainchild open to all
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