How great is your product idea? Every idea is great, but not every product idea can monetize itself. The product development process is crucial in deciding whether or not your product can be pushed to production. This guide will teach you how to validate your product ideas so that you can launch your next product successfully.

1. #UXLearn
#ProductValidation
@koombea, #ProductValidation

3. AGENDA: Product Validation
• Company Type: VC or no VC?
• Evaluating Your Market
• Early Stage Questions
• Trends: Traction Metrics
• Industry and Revenue Streams
• Measuring Your App Idea
Jonathan Tarud, CEO
Ellie Cachette, VP Product Marketing

4. Click here to read more about us.

5. VC (Go Big) or No VC (Bootstrap)?
Which company to build?

7. Bootstrapped (No VC)
Companies that have revenue and customers even if
inconsistently
Common criteria: Started with little to no cash
• No formal investors or capital raised
• Company growth dependent on revenues
and cashflow
• Might have both a product and a service in
parallel (one might fund the other)

8. Companies that Bootstraped?
http://www.businessinsider.com/bootstrapped-companies-2012-10

9. What is the market like for a product for this
segment?

10. Click here for more!

11. *Off/Online Distribution
Coffee shops, etc.
Mom blogs, workplace
Facebook &
LinkedIn groups
Websites
Make a list of keywords,
problems, & phrases
• Look for keywords on
a channel from last
exercise.
• Write down the
patterns that you
see.
• What reoccurring
themes are there?

13. Evaluating Your Market
Are there already players in your space? How close is your
problem to being solved?
• How many end users are possible for
you, in the world?
• What apps already exist? What prices
and models are they using?
• What devices are best for your app?
• Special service? Building on top of APIs

14. • Does your product save time or money? What
value does the user gain?
• Do you know if you are aimed for the direct to
consumer market or enterprise?
• Do you have the expertise for your space?
Figuring out the value

15. User Acquisition
What’s the BMU (Bare Minimum Users)
you need for the app to be successful?
Are users dependent on each other
(dating sites, professional sites, sites
needing inventory)?

16. Early Stage
Questions

17. Early Stage Questions
Questions every app or startup should be asking
themselves
• Features: Could you map your features versus
similar apps features in a table? How is your product
different than what’s out there.
• Do you have basic materials ready for users and
questions? Do you know how to troubleshoot with a
user?
• How fast can your app be built and what is your
advantage?

18. Early Stage Questions
Q: How do I get to an MVP?
A: Make a list of basic requirements
Q: How do I know if people will use it?
A: Ask around, don’t be shy!

19. How Fast is Fast?
Most apps can be built in a few weeks
depending on features and platform
• Have you started scoping
your app?
• Do you know what you
want?
• Have you found users?

20. Ellie Cachette, VP of Product Marketing

21. What is Product Marketing?
Help customers understand their go-to-market for apps built inhouse
at Koombea, pre-sales educational materials, user acquisition.
Main areas of concern:
• App vertical feasibility
• User acquisition costs
• Launch costs
• Risk for user leakage

24. Trends: Traction Metrics
Gaining traction is no longer is a secret but required, most
verticals have existing standards. Know yours.
• Find out how many monthly signups you
need or how much a competitor is
getting
• Look up website traffic on Alexa.com or
other engines
• Try to calculate size of competitors

25. Early
Stage
MVP
Stage
Raise
$100-­‐500
k
Family
/
friends
Val
2.5
MM
–
4MM
$500k-­‐
2MM
Val
$6MM-­‐8MM
Debt
note
cap
Equity
with
preference
Team:
2
full
Kme,
some
part
Kmers
3
full
Kme,
several
part
Kme
CUSTOMERS:
1
LOI
2
LOIs
+
PRODUCT:
prototype,
min
300
users
/
emails
/
signups
Prototype
with
metrics
90
days
Prototype
tracKon,
working
funcKonality
Working
MVP,
repeatable
user
acquisiKon
Examples of Traction

26. Early
Stage
MVP
Stage
Sales:
Several
theories
may
be
in
tesKng
Sales:
Repeatable
sales
cycle
with
some
bumps
Docs:
We
need
a
one
pager?
Docs:
SupporKng
Sales
presentaKons
online
Website
traffic:
5,000
–
10,000
Monthly
uniques
Website
traffic:
20,000-­‐100,000
monthly
uniques
Downloads
(ex:
iTunes)
300+
Downloads
(ex:
iTunes)
1,000
Sales
Advisor
VP
of
Business
Development
lined
up,
will
be
hired
soon
if
not
already
Several
Power
users,
user
tesKmonials
Top
Rated
App
in
category,
4
star
raKng
or
above
Examples of Traction

27. Industry and Revenue Streams
Understanding what area or industry your
app is in decides the revenue model
Example:
Service or delivery app Model (one time event)

28. • These apps can usually charge 10-50% transaction
fee.
• Take avg order size (trans fee) X amount of times a
week your app is operating = y.
• Take avg order size (trans fee ) X amount of times your
app SHOULD be operating = z. Take Z minus y and
you now have whats called a goal or KPI

29. Industry &
Revenue Streams
Deciding on whether you should go to market or not.
Calculate your GTM “Go to Market”
Example:
Monthly subscription for service (Hulu, health, etc)

30. • These apps can usually charge $3.99 X $10.99 mo
• Even with assuming a years worth of subscription (no
leakage) that puts user revenue at $48.00 to $132.00 a year
• How much did your app cost to build – operating
costs for the year = X
• Take X and divide by 2 (two years) and divide by 12
(months) = y
• Now how many months will it take your app to get to y as
monthly revenue?
• If its more than 6months you should reconsider.

31. Quiz: Measuring Your Idea
Here’s a simple Quiz to help you measure your app idea.
Grab a notepad or get ready to type.
Does your app already exist?
(yes) (no)
Do you know the business model?
(no, the what?- 2 ) (yes, exactly)
Do you know the GTM or user goals?
(yes) (no)
Have you done something similar?
(yes) (no)
Get your exclusive
MVP checklist
here!

32. Quiz: Measuring Your Idea
Continued…
Have you started MVP?
(yes) (no)
How confident are you about getting users?
(yes, confident) ( no, not confident)
Have you found your Basic User Acquisition Costs for
the first two years?
(yes) (no )

33. Test Your Idea
If you scored, 4: Minimum MVP
You have some basic understanding of what needs to happen, know of the
space you are in and have some ideas that need fleshing out. Next steps would
be market research and finding expertise in that space
If you scored 6: Scoping Sweet Spot
You have already found similar apps, have an idea of what to do just need to
know the next steps for building and executing.
If you scored 8: Perfect Product Market Fit
You likely haven’t figured out the small hurdles but have an idea of where the
risks are and what to look for. You know your space and plan to approach it.

34. Getting started is ½ the battle. But
once you feel your product is
validated enough, it’s time to
begin.

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