Product validation vs market validation: what’s the difference?

When you have a new business idea, there are two main types of validation you need to think about: product validation and market validation.

But what’s the difference? We’ll explore this topic by defining them, looking at why they matter, and sharing actionable tips that you can use to make sure your product and market fit together perfectly.

What is product validation?

Product validation is about making sure your product idea is something people actually want.

It answers the question, “Is this a good product?”

Testing your product idea

1. Build a minimum viable product: A minimum viable product is a simple version of your product that has just enough features to allow you to run some tests. It helps you to see if there’s real interest without spending too much time and money.

2. Talk to potential customers: Customer interviews can help you to understand what people want and if they would be willing to buy your product.

3. Monitor paying customers: Watching how many people are willing to pay for your product, even at this early stage, can give you strong evidence that you’re on the right track.

Product validation process tips

• Think lean: You can use a lean product validation process to test your product ideas quickly and without wasting resources.
• Work closely with software development if you’re creating a digital product. They can help you create a prototype to test your ideas.

What is market validation?

Market validation is about understanding if there’s a real market demand for your product. It answers the question, “Will enough people buy this?”

Researching your target market

1. Identify your target audience: Knowing who your target customers are helps you to focus your efforts.

2. Use market validation research: There’s lots of information out there, from market research company reports to monthly search volumes online. This research can help you understand the size and nature of the market.

3. Talk to potential customers: This is key in both product and market validation. But in market validation, you’re trying to understand the broader market demand, not just if individual customers like your product.

Market validation process tips

• Understand the needs of your target customers. If you know what they want, you can make sure your product meets those needs.
• Don’t be afraid to adjust your business idea if your research shows the original idea won’t work. It’s better to make changes now rather than after you’ve invested a lot of time and money.

How do they work together?

Product validation and market validation go hand in hand. One is about the product itself and the other is about the market it fits into. Both need to be successful for your business to succeed.

• Product market fit: This is when you’ve found a match between your product and a hungry market. It’s the goal of combining product and market validation.
• Validate product ideas with your target market: The people you’re aiming to sell to are the best source of information for both validating your product and understanding the market.

Conclusion

If you follow these tips and really look into both product validation and market validation, your business idea stands a good chance of success. If you’re working on new software, making a physical thing, or starting a service, getting to know both the product and the market can keep you from wasting time, money, and a lot of headaches down the road.