Market Validation vs Market Research: How do I define who my target users are?

If you have ever had an idea for a product or service you’d like to build, you most likely have felt the urge to build it and make it available for people to see what they think about it. This is probably the most time-and-effort-consuming approach, and it is hard for you to correctly guess what people need.

Instead, here at Apptimist Studio, we like to think first about the problems we are solving and for whom we are building them (even before we start building anything). So, a question we ask ourselves usually is, “Who would buy that?”

You may have a hypothesis about who the potential customers are, but do you know how to actually validate it or where to start?

Terms like market validation and discovery market research have been trending topics in the startup world, and they are key to the success of a product. Even though both are part of market intelligence, they do not refer to the same thing.

Market research: the activity of gathering information about consumers' needs and preferences.

Market validation: In contrast with market research, it focuses on confirming there is a need and demand for the product or service in a specific market and its customers.

You can validate if your idea has the potential to be profitable by defining who the users are and if your assumptions about them are correct. One way is by conducting user research. There are two methods for User Research and they can uncover different types of information.

Attitudinal Research: This approach is all about the feelings, expectations, experiences, beliefs, and opinions users have.

Behavioral Research: On the other hand, behavioral research studies how people interact with a product or service.

Even though each of them serves a different purpose and has pros and cons, using both will give you a 360º understanding of who your users are. Additionally, with all the information you will gather, you can create user personas and find the journey maps for each (we will cover in-depth this soon, so make sure to subscribe if you haven’t already).

Let's learn how to validate your market by analyzing your target audience and challenging any assumptions.

Determine the main characteristics of your idea.

Before we start thinking about surveys and interviews, we need to examine your business proposition, even if you haven't worked out the details. When you have a clear idea of what you're selling, you have an easier time determining who will benefit from it.

1. What is the job you're getting done? What is the problem or challenge your idea is solving? In a previous edition, we dove into this subject using the Jobs-To-Be-Done framework. If you're still unsure about this point, you can give it a read here and come back to this post.

2. Who needs to get this job done? Think about who will be happy or whose life will get easier by having access to your product or service. You can list it by occupation, profession, lifestyle, etc., this will help you figure out where you can look for these users.

3. What is the unique selling proposition? You may not have a fully-fledged business plan, and you don't need to, but if you already thought about what could make your idea different from the rest, it's good to keep it in mind so you gather insights to validate this as well.

Understand what you need to find out about your users

Collecting demographic information is always useful, but it is not the only information that will help inform your decisions. Data such as demographic location, age, profession, etc. always comes in handy for segmentation purposes and to find insights that, for example, might be related to an age group.

Qualitative information such as the motivations behind needing your product or service, the points of friction they have while using the product, the frustrations, how they use such products in everyday life, etc. is rich in usability insights for development.

Methods for Data Collection

There are many ways to get close to users, talk to them, and understand who they are. This mainly depends on your budget, time, and what resources you have available at the time.

• Interviews: This is a simple but very powerful and effective method. Avoid asking yes-or-no questions, and let the user talk as much as they want. What you want to achieve with the interviews is that the user feels comfortable enough to share with you the how, why, where, and when's of their behavior.

  
  

• Surveys and questionnaires: This is the cheapest and fastest way to collect data. However, you have to really think about how you're asking questions in the survey to avoid user burnout and confirmation bias. This method is most effective when you can segment the users you're targeting, so you can better cluster data results to find insights and trends in user behavior.

  
  

• Field studies: This takes place in the user's natural environment. There are three types of field studies: site visits, contextual inquiry, and direct observation. Each serves a different purpose; site visits are a combination of observation and interviews. Contextual inquiries are similar, but they focus on a small group of users, and direct observation is purely observational; you do not intervene in their activities or ask any questions.

  
  

Some tips from Disciplined Entrepreneurship by Bill Aulet that would take your research to another level:

You must have a high level of intellectual curiosity.You must be fearless about getting on the phone, in the car, or on a plane to pursue this information.You must have an ability to listen and get people to talk.You must be open-minded and unbiased, and never presuppose a solution (inquiry, not advocacy).

Data Analysis

After conducting user research, asking questions, and getting to know your user, it is time to synthesize the data to be used in decision-making. A great tool for companies that can be created with the data gathered are user personas.

These are profiles of users that represent customer segments; it's very common that a product has more than one persona. They are composed of demographic information, a brief description of who they are, their values, interests, and motivations.

If you don't know who your users are, you might end up with a product that doesn't solve a real issue. An MVP that doesn't have the right features to entice and keep users or your team might prioritize the wrong features to build, wasting time, money, and other resources that could be allocated to other areas.

By investing time in understanding who your target users are, you will be well-equipped to quickly determine the right course of action at every stage. The right features to build, the marketing messaging that targets the right audience, and even the right price that would work best with the needs of the users.

Case Study

Here is how we apply that in a project, you can find a lot of useful tips here

Here at Apptimist Studio we had the opportunity to help NomadCowork, a startup that takes the form of a search engine to help workers find co-working spaces, accommodations, and workstations all over Europe. To validate this idea and discover who those potential users were that could benefit from the platform, we started by defining the following:

Market opportunity: During the COVID-19 pandemic, as offices closed, many from colder European countries chose to relocate temporarily to warmer locations to enjoy the sun while working remotely. They sought engaging activities for evenings and weekends. However, an initial review of options on platforms like Airbnb revealed that many accommodations lacked proper workstations and reliable internet, discouraging potential travelers.

The Problem: Traditionally, co-working spaces have catered to digital nomads and those with permanent home offices. Recognizing the oversight in addressing office workers as potential users, the founding team sought to develop a solution that would benefit both users and co-working spaces.

The Goal of Research: The goal was then to conduct a discovery research to validate the market opportunity and assumptions about the problems that workers were experiencing when considering working from abroad. The research insights were then used as a basis for the design of the co-working services and the creation of user personas.

At the beginning, we kick-started the research with two assumptions:

1. The pandemic has brought about greater flexibility for office workers in terms of working locations.

   
   

2. While working from home has benefited many, staying home all the time, especially when the weather is bad, has pushed people to experiment with working abroad, predominantly from southern European countries like Spain and Portugal.

   
   

To dive into the validation, we held semi-structured 30-minute virtual interviews with 20 people over the course of two weeks. The interview questions were written keeping in mind the research goal and were tested with a couple of users to account for any bias and lack of concreteness.

After the initial analysis, two tables were created, one with nominal and the other with ordinal variables. A different color was assigned to each participant, and started laying out their answers on the two tables to detect any similarities in their answers.

After mapping all the insights, we crafted a contingency table in order to understand which participants had the most in common. The results then informed the next step, namely creating personas

What We Learned

Always double-check research questions

• We learned about the importance of collaborating with others to spot and eliminate potential biases, leading questions, and ambiguous phrasing, to secure objective results. It is always better to run the questions by others, as we may not be aware of our own biases.

Stay impartial during interviews

• When conducting interviews, it may be tempting to nod or to provide one's opinions. However, this may temper the results, as the interviewees may be led to answer questions in a way that pleases the interviewer. It is important, therefore, to be aware of one's behavior by checking past recordings and creating mental guardrails against potentially leading reactions.

The Challenge!

It’s time to dive into user research. After you define your initial product idea and who can benefit from it, it's time to get close to people and validate your idea!

• Come up with at least 15 things you would like to know about the user and turn them into questions.

• Think of at least three places where you can find these users, whether it's on the internet or in real life.

• Depending on your idea, you might only need surveys or field studies as well as interviews. Regardless of the method, come up with a plan to collect the data.

  • If you're doing surveys, choose which forums or platforms you will be distributing your questionnaire and craft a nice, inviting message to entice people to participate. It could be Facebook groups, LinkedIn groups, Reddit, or even WhatsApp groups that you are part of.

  • For interviews, a good idea is to look ask your friends, family members, and acquaintances first to see if anyone could be a potential user. You can also leverage the power of the communities you're part of and ask if anyone would be willing to talk to you.

  • Field studies are a bit easier to execute; once you decide where those potential users will be, make sure you have the list of things you'd like to know so you can keep it in mind as you observe them. Remember to bring a notebook or laptop to take notes.

💡 ApptimisTip! Ask them about their problems, this is perhaps the most important takeaway, you will find a lot of hidden potential for feature development of your product or service when you tap into people’s frustrations.

Research can seem like a complex process, there are a lot of things to keep in mind and action items to do but it doesn’t have to be complicated!

If you have an idea or are already working on a product and would like to leave research in the hands of professionals you can always reach out to us at Apptimist Studio.

We’d love to hear what you have in mind, you can book a free discovery call with us here.