Effectively Complete Problem Validation & Customer Discovery for Your Startup
Problem Validation and Customer Discovery
Problem validation and customer discovery are vital to your startup’s Proof of Concept stage. These steps must be taken before you can even attempt to build a company around your idea. If you aren’t solving a problem and can’t prove to investors that people want your solution, your company is dead in the water.
This is a way of dipping your toes in before making any big (and expensive) leaps. Remember that you’re an investor, too. You don’t want to waste your own time and money on a startup company that’s going nowhere when you could be putting your energy into something truly great.
Before moving on to what many people believe are the more exciting stages of startup (funding, building an MVP, etc.), you should be able to:
- Articulate the problem you’re solving.
- Know your target audience.
- Prove that people are willing to pay to fix this problem.
- Explain why you’re the one to solve the problem.
This article will help you get to that point.
Problem Validation
Is what you’re trying to solve really a problem, or is it something you imagine to be a problem? Too often, companies try to convince consumers something is wrong just to sell a product. If you’re an established company with a big marketing budget, this might work. Or, you might end up like The Facebook Phone.
The folks at Facebook (now Meta) seemed to think that people needed access to Facebook 24/7 without lifting a finger. The Facebook Home app came out in 2013 and used the lock screen for notifications (mostly Facebook notifications, of course) and turned the home screen into a “cover feed” that allowed users to view posts and make comments. The trouble was that very little phone was left once Facebook took over the device.
Customers didn’t like it, and by 2014, Facebook had stopped updating the app.
The company tried convincing customers of a problem they didn’t have rather than listening to what they really wanted. Facebook even went so far as to design, develop, and release the product, only to have it fail to the tune of what we can only assume was millions of dollars.
On the other hand, Facebook itself does solve a problem. People want an easier way to connect with new friends and stay connected to old ones. On that front, Facebook delivers, and that’s why it’s been so successful.
They lost their way for a moment, but they were big enough to come back from it. Chances are, you’ll have more on the line.
So, what is problem validation?
In short, problem validation means making sure your proposed product is relevant and appealing to your target market. You’ll need to find a way to connect with your target market and discover their pain points without thinking too much about what you want to hear.
Take a look at the next section to see the best order of action for problem validation.
Questions to ask yourself when validating a problem:
- Do I have any competitors?
While having a completely original idea and total market control would be nice, you probably have competitors. This is not a bad thing. The ability to identify competitors helps demonstrate that you are, in fact, solving a real-life problem. The challenge is solving this problem in a different, more effective way. You must be able to prove that your solution is the best one – or at least different enough to steal a hefty share of the market.
Feminine hygiene products provide an excellent example of a space in which multiple companies are solving the same problem, but all find success. Let’s look at the Saalt menstrual cup. The obvious appeal is that it stops flow, just like tampons and sanitary napkins. However, the founder, Cherie Hoeger, looked at the sustainability, accessibility, and affordability of these products. The cups last at least one year and come in a two-pack for $49. One pack of Tampax tampons is about $8, and women go through about one box per month.
Saalt is solving the problem for those without ready access to disposable options, those who care deeply about their environmental impact, and those who want to save roughly $50 per year.
- Do I know anyone connected with the field?
One of the most helpful things you can do as a startup founder with a new idea is to get an expert opinion. This type of relationship could develop into an official advisory role, but that’s not where your head should be during this stage.
For example, if you want to start a ride-share company, wouldn’t it help to talk to Garrett Camp? You probably don’t know the co-founder of Uber well enough to take him out for lunch and pick his brain, but you might know someone who did freelance work for the company and can offer some insight. You might know someone who owns a taxi service and can help you understand the pros and cons of ride-share vs. a traditional taxicab.
If you’re very new to the startup ecosystem, just speaking with someone who has experience founding a tech company – any tech company – could be invaluable.
This is where having a network or joining a network, like Scale Omaha, could be helpful. Participants may also be able to connect you with people in your target market who can help you with the next question.
- How can I get public input?
If you’ve answered the first two questions, then you’ve probably achieved the following: identifying and articulating the problem and knowing why you’re the one to solve it. Now, you’ve just got to talk to the people!
Before running full force into the customer discovery journey, you’ve got to take a few baby steps. It helps to talk to a small group of people from your target audience to hear their experiences, confirm pain points, and learn if there is room for improvement early on. This may be best through a simple in-person chat or by finding an online group that fits the bill and floating the idea to them.
You want to be sure you’re putting your best foot forward during customer discovery, and speaking with a small group may help iron out any obvious wrinkles.
For example, say you’re trying to create a new food product. During this early survey, you may learn that palm oil is often associated with deforestation and can be a turn-off to some consumers. Not only do you have an opportunity to remove a potentially controversial ingredient, but you can also use the fact your formula is palm oil-free as a selling point.
Customer Discovery
During the customer discovery stage, you’re achieving two main goals:
- Ensuring you’re targeting the correct audience.
- Proving your product will sell.
This is the stage where, essentially, you are testing your hypothesis. You see a problem, you have an idea for a solution, and now you want to know if it will work. You don’t start by spending money on a minimum viable product (although a prototype may help); you start by listening.
CompanyCam founder Luke Hansen had an advantage before launching his startup; he worked alongside his customers. CompanyCam was developed for construction crews who needed to document and coordinate.
The problem was carrying a bulky camera to every job site, remembering to take photos, and then remembering to upload those photos to the company Dropbox.
The solution was to create an app that allowed workers to snap a photo and have it immediately accessible to the rest of the crew.
Luke thought something similar must already exist, but when he researched it, he discovered a gap in the market, a.k.a. an opportunity. He spoke with all the contractors he knew, and while the fine details of what they wanted differed from customer to customer, most agreed that the app would solve a lot of communication issues.
So, what is customer discovery?
In short, customer discovery is the act of identifying your target customers and their pain points to better align your business with their needs.
Below are a few ways to offer that proof of concept.
How do I determine customer needs?
- Talk
Where would you find your target audience? If you’re creating a product for baby boomers, you might do better to hang out at a local mall and talk to them in person. If your product is geared towards millennials, you may be able to engage them online.
Get creative. Attend a conference. Ask other people in your network for advice on how to get a customer in a room, and then have a conversation.
Note that I called it a conversation. It shouldn’t be an interview with yes and no questions. It’s best to get the interviewee to discuss their pain points naturally and, from there, discuss the types of solutions they’ve tried and where those solutions were lacking.
After the initial pleasantries, a customer discovery interview for a new feather duster might go something like this:
Q: How often do you dust?
A: Oh, about once a month, but it’s such a pain.
Q: What makes it a pain?
A: Reaching everything and moving the small things out of the way so they don’t get knocked over.
Q: What feather duster are you using now?
A: The Walmart version of the Swiffer duster.
Q: Do you mind sharing about how much that costs?
A: About $9.00 for a pack of 18 refills.
Q: How much would you pay for a feather duster that cleans just as well but won’t knock over knickknacks?
A: How often would I need to replace it?
Q: Once a month if used once a week.
A: I’d pay $15.
Keep a record of your interviews and use the information to make data sheets to show potential investors – and for yourself, to be sure you’re on the right track. If your feather duster costs $25 to make, but the average price people are willing to pay is only $20, you’ve got a problem.
- Research.
Eavesdropping is extremely easy these days. I don’t mean you should go to Starbucks hoping to hear people talk about their feather dusters (although eavesdropping at Starbucks is an excellent source of entertainment). I mean digital eavesdropping.
One way to research is by going on social media platforms, like Reddit, X, TikTok, Facebook, forums, etc., and see what people are saying. Let’s keep going with the feather duster example.
There are several Facebook groups dedicated to cleaning tips & tricks, both for professional cleaners and homeowners. Do a quick group search for “dust” or “dusting” and learn what people love and hate about the products they’re currently using.
Check out #cleaninghack or #cleaningtricks on TikTok. Look at the comments.
Social media is one avenue of research, but there are more official ways to perform customer discovery research. A quick Google search will give you access to articles on industry growth and cleaning trends.
- Survey.
Don’t just lurk in the cleaning groups; post in the groups. Ask if anyone would be willing to complete a survey about their experience. Services like SurveyMonkey and Google Forms will let you create surveys for free.
You can also ask people in person for their emails to answer a survey later if they don't have time for an in-person interview. Consider offering a small incentive, like entering them for a gift card drawing, to ensure motivation to participate.
As with the in-person interview, don’t just use yes or no questions; ask thoughtful questions that truly give insight to how your customer feels about their current products, their pain points, and a potential solution.
Again, don’t be afraid to ask for help. Ask someone in your network to look over the questions you plan to ask and offer any helpful advice.
What do I do with this information?
As we mentioned earlier, during the problem validation and customer discovery process, your job is to avoid making assumptions about your customer or falling into the trap of hearing what you want to hear. Once you’ve validated the problem and discovered the customer, it’s time to assume.
There are certain things your customer base has in common. You’ve gotten to know many of your potential customers, and you’ll use that information to make educated guesses about who your customers are and what they want. We’ll look at CompanyCam as an example.
Company: CompanyCam
Founder: Luke Hansen
Product: App for contractors
Customer: Contractors
Assumptions: All contractors have job sites and need to document and share progress. Most find this difficult. Most workers have smartphones with them on job sites. A digital storage solution would make their lives easier.
Pain Point: Communication and documentation
Solution: An app that makes it easy to document jobs and communicate between crews
This is the foundation on which Luke built a successful tech company. However, there were a few stumbling blocks. During an interview, he explained that they cater to roofers, painters, plumbers, and more, and he had gotten too caught up in creating tools for each niche rather than focusing on tools that would help all contractors.
Once he began focusing on what all contractors have in common rather than trying to please everyone, he developed a successful product.
Listen to your customers, but also know who you are and start small – even if everyone is clambering for a bunch of bells and whistles.
Now, discover more.
From this stage, you may consider building a prototype and putting together a focus group. Once you can prove your concept, you’ll move on to talking about funding, building an MVP, and building an MMP. Hopefully, after that, you’ll find success.
However, keep in mind the customer discovery journey never ends. Staying in contact with customers and their needs is how you make your product bigger and better. It’s how you grow your company.
How does Beeso Studio help with problem validation and customer discovery?
Many of the companies in our portfolio started with us as what we call “napkin ideas.” That means the founder had nothing more than an idea, but we believed it had potential. We agreed and researched that there was a problem, and the founder had discovered a potential solution.
When you partner with Beeso Studio, you don’t have to do any of this alone. We use our existing network of founders, advisors, startup professionals, and industry experts to help validate problems and initiate customer discovery. We support founders with compiling the data, review it together, and decide on the next steps. It’s like having a functional startup business without having to organize or fully fund a team.
If you have an amazing idea for a startup and want help bringing it to life, reach out to Beeso Studio. We’re always looking to partner with founders who share our passion for innovation.
