What is customer validation?
Customer validation is a final checkpoint for verifying that the customer needs - problem/solution fit - are understood and the organization has a realistic and profitable plan of how to sell the product. If you fail in finding paying customers duting this phase, you need to return to customer discovery to rediscover (pivot) what customers are ready to pay for.
Usually the startup performs at least twi iterations of both discovery and validation phases. While this seems expensive, it pays off in the long run because you burn less money in the first two phases than in the remaining ones - customer creation and company building. If the business model proves unprofitable and incorrect, it needs to be fixed and repairing a small organization is cheaper than reforming an accelerating company.
The outcome of this phase is to find product/market fit: to be in a good market with a product which satisfies that market. This is the only thing that matters for a startup. When this fit is achieved, you have not only built a product that people love but also validated that it's profitable.
The goal of this step is to build a repeatable sales road map for the sales and marketing teams to follow later. The sales roadmap is a playbook of the proven and repeatable sales process that has been field tested by successfully selling the product or service to early customers.
Customer validation proves that you found a set of customers and a market that reacted positively ($) to your product. A customer purchase in this step validates all the good feedback received from potential customers.
Completing the customer discovery and validation steps verifies the market, locates the customers, tests the value of your product, identifies the economic buyer of your product and establishes the pricing and channel strategy.
What is the outcome of this phase? Answering thse questions:
- how long does a normal sale take from beginning to end?
- who is the decision maker?
- what is the selling strategy? Is this a solution sale?
- if it is, what are the key customer problems?
- what is the profile of earlyvangelists?
This phase has four phases:
- get ready to sell
- get out of the building
- develop positioning
- verify your learning
While in the customer discovery phase you made product presentations, it's time for a more accurate preview of your solution.
In this phase, you will create a high-fidelity MVP, build the metric toolsets and define product positioning. Product positioning is successful when the startup is able to explain shortly for whom the product is targeted, what is the reason to buy it and how it is different from competitors. This can change later when you get feedback from customers and investors.
Only if you find a group of repeatable customers with a repeatable sales process and that find that it gets a profitable business model, you move to the next step - customer creation.