The SaaS App Startup Journey

Introduction:
Now that you feel confident in your initial idea, it’s time to know what your target audience has to say. Conducting external market validation is a critical process for entrepreneurs and businesses to validate and refine their ideas. By engaging with potential customers, partners, investors, and industry experts, you can gather diverse feedback that helps shape your product or service offering. This article explores the significance of external market validation and provides a step-by-step guide on how to conduct them effectively.

The Importance of Sharing and Gathering Feedback:
One of the key aspects of conducting an external market validation is the emphasis on sharing your idea with others and seeking feedback from the market. By doing so, you can gain valuable insights into potential customers’ preferences and pain points, which can lead to crucial improvements in your offering. The process involves early engagement with potential customers to shape the idea, keep track of their feedback, and ask for permission to follow up with them, fostering a continuous improvement loop.

Timing of Offering Free Services:
While offering free services can be enticing to attract early customers, it is advisable to do so after the beta phase. By waiting until you have gathered substantial feedback and refined your product, you can ensure that the free services align better with the needs of your target audience, increasing the chances of success.

Market market validation and Benchmarking:
To further validate the findings obtained from potential customers, it is essential to conduct market market validation. This involves researching what customers typically pay for similar products or services in the market. For instance, when considering mobile apps, the research revealed that customers generally expect to pay around $9.99 to $29.99 per month. This benchmarking exercise provides valuable context for pricing discussions with potential customers, enabling you to set a competitive and reasonable pricing strategy.

Soliciting Feedback from a Diverse Set of Constituents:
To ensure a comprehensive evaluation of your idea, it is crucial to seek feedback from a diverse set of marketplace constituents. These include:

1. Potential Customers: Test the value proposition of your product or service and gain insights into what resonates with your target audience.
2. Potential Channel Partners: Assess their willingness to distribute your product or service, which can help you identify potential partnership opportunities.
3. Subject Matter Experts: Seek feedback from industry experts to gauge the quality and viability of your idea from a professional perspective.
4. Potential Investors: Understand their interest in investing in your venture, which can help secure funding and validate market demand.
5. Potential Acquirers: Evaluate the attractiveness of your idea as a potential acquisition target, which can impact your long-term business strategy.

Best Practices for Conducting External market validation:
To make the most of the external market validation process, consider the following best practices:

1. Engage with as many constituents as possible to gain diverse perspectives and insights.
2. Stay open to negative feedback and avoid confirmation bias, as critical feedback often leads to the most significant improvements.
3. Continuously tweak your idea and how you present it based on the feedback received.
4. Pay close attention to any substitutes or direct competitors that are mentioned during the feedback process.
5. Be prepared to pivot, redo, or even abandon the idea if feedback indicates significant issues or challenges.
6. Establish a commitment to ongoing dialogue and feedback with the stakeholders involved.

Conclusion:
External market validations are an indispensable part of the entrepreneurial journey, allowing businesses to validate assumptions, refine ideas, and increase the chances of success in the market. By engaging with potential customers, partners, experts, investors, and acquirers, you can gather diverse perspectives that contribute to a robust and well-informed business strategy. Embrace feedback, continuously improve, and be prepared to adapt your idea as you progress through this valuable process.

Action Items

• Initiate outreach to a wide range of marketplace constituents, including potential customers, channel partners, Subject Matter Experts (SMEs), investors, and potential acquirers, to thoroughly assess your idea’s viability.
• Actively seek and value both positive and negative feedback, as it provides valuable insights for refining your concept.
• Continuously iterate on your idea and its communication based on the feedback received, addressing potential concerns and suggestions.
• Pay close attention during interactions for indications of substitute products or direct competitors that may arise, recognizing their significance in shaping your idea’s positioning.
• Mentally prepare for the possibility of significant changes or even abandonment of your idea based on the feedback and insights gathered.
• Secure commitments from stakeholders for ongoing dialogue and feedback, fostering a culture of continuous improvement and collaboration.