How to validate your SaaS idea before building an MVP?

The best way to validate a SaaS idea before building an MVP is to have the problem that you are solving for. Especially in SaaS, because you aren’t looking to create another entertainment platform, but instead solve a business need for a customer in exchange for them paying you money. So, if you consistently run into an issue and aren’t satisfied with the existing tool set you can decide to go out and build your own.

But before diving in the steps to validation, let’s clarify a few things.
You need to identify a problem and its solution, yes, but a huge part of your guess (i.e. idea) resides in who you think will want to pay Rs.X per month or year to get their problem solved. This is also called “customers”. This is what will make you filthy rich. For example, the initial guess of Metrics Watch was that digital agencies would be willing to pay for Google Analytics alerts, white label them and send them to their clients. Wrong. So wrong. The point of this post is to help you avoid that kind of mistake and avoid building something people don’t want to pay for.

So, you have an idea and a ton of will to take over the world, a market or just have a fun lifestyle business. We want to validate that it’s legit and has some chances to work. Validating your idea is all about risk mitigation.

What needs to be validated exactly?

First, we need to validate that the problem exists and that people are willing to pay for a solution. We also need to make sure that your proposed solution is a good one that people will be motivated enough to use and pay for. That’s as “simple” as that.
Now before you do that you should, evaluate the market. Have you really tested all of the solutions that are currently out there? Then hone in on your pain point. Why is that you don’t like the existing solutions.

Steps to follow to validate your idea

Clarify your idea

Before pitching your idea to anyone else, first the idea should be completely clear to you. To clarify your idea try to answer these questions:
1. What problem would my SaaS solve?
2. Does this problem actually exist?
3. How would my product work exactly?

Then after that, you need to research about the things such as:
- Identify competitors (crunchbase, google, app store, etc.)
- Does your idea exist already? (Google Patents)
- Can you do it better, faster, cheaper?

The last thing to do is brainstorming to identify huge opportunities to disrupt the market:
- How are people addressing the problem now?
- What disruptive technologies can solve the problem?
- Where is the competition missing the mark?
- See non-competitive products for more ideas

Plan - Narrowing the Focus of your Product

Now after the idea is completely clear, you have to devise a plan for your SaaS. You have to document your assumptions, make a UX hypothesis, set goals for the product and define the MVP of your product. You also have to think about:
- What features are required to sell the product?
- Connect the functionality to the product goals
- Define metrics for success
- Define customer personas

Define your target customer

Understanding your target customers is crucial from the beginning to ensure that your product will be accepted by them. To understand your target audience, you need to segment the different types of buyers. Segmentation can be done based on various factors such as budgets, needs, decision makers, problems and goals.

When starting up your SaaS company, strive to grow with your audience. Keep in touch with your users through email, social media and blogs to know what features they want and get other important feedback about your product.

Sketch - How to Use a Quick Drawing to Determine the Interface

Now, you need to think about the interface of your product or service. To do that, proceed in the following manner:
- Create a sitemap of the product
- Use pen/pad to sketch the interface
- Design whole tasks that testers can complete
- Show the connections between the screens (information architecture)

Test if there is an open market for your potential product

You can use these tools:

1. Google Trends:
   It helps you have a bigger picture of the market where your potential product will land.
   Trend charts can tell you if your target market is shrinking, stable or growing.
2. Online Ads:
   The idea is to create a cheap ad campaign for your future product. This allows you to test people's reactions.
   In this way, you gain a better insight of the market, as your ads will focus on your target customers. The clicks received will be your response.

Create a Realistic Demo of How the Product will Look and Work

To create a realistic interface, use the following tools to mock-up flat designs for each screen that you sketched
- Desktop: photoshop/sketch or Axure or a similar program
- Mobile: AppCooker or Proto.io or a similar program
- Use Invisionapp.com to connect the flat designs so that the user can click/tap on the buttons and transition from screen to screen. This will give the tester a ‘real enough’ experience to complete tasks and answer questions about its viability

Look for your early adopters

You have several options to find them:

• Ask your colleagues or friends. They might be interested in your idea. If not, they could still help you giving some referrals
• LinkedIn. Go to your connections and browse for potential clients.
• Stalk your target customers via Facebook or other Social Media.
• Forums. Join groups of people who might be interested in your solution.

8) Schedule interviews with your early adopters

Try to follow this scheme to get the best results out of them:

• Validate the problem
• Get to know about the pains of your potential clients
• Validate the solution
• Show them how you can solve their issues with your product idea
• Ask them if they would pay for your solution

If they are willing to buy it, this means your idea is successful.

Receive an evaluation from your early adopters.

It's the most precious information they can give you. It's reliable and it reflects reality. You can get three kinds of feedback:

1. Positive response: your idea is useful and people think it's a must-have to solve their problem. You can go to the next step. Start designing an MVP for a more detailed SaaS idea validation or go finding you first paying customers.
2. Negative response: your idea is not solving customers' pains. If you pursue it, your future business will fail eventually. Thanks to this valuation you can move on and find a better idea to be successful.
3. Suggestions and recommendations: they can help you improve and develop your initial idea. You can get feedback not only from early adopters but also from people close to you.

However, it's not 100% useful as they might want to please you and support you.
This doesn't mean you have to avoid their opinion. Just be aware of taking it with a pinch of salt :)

Conclusion

Lastly, just because you do it better doesn’t mean that you will get product market fit. There may be continued refinement that you need to do that makes your product 10x better in order to really grow market share. So, remember, that after you build the right product, you still have to market it. Marketing isn’t about spending ad dollars, that’s advertising. Marketing is really about what is the message that gets your customers excited and want to tell their friends about your product.
And now it's your turn. Give yourself a try with this strategy and tell me if it works for you as well.