The key to success when testing a startup idea on a limited budget is identifying and validating the correct assumptions first. To do this, you need to gain an understanding of your target market by characterizing them through their needs and tasks in specific contexts and listing and ranking your assumptions. We have described the preparation for this process in our article on how to prepare your startup idea for validation.
Today, let's dig into eliminating the uncertainty from your concept by finding strong evidence from customer research and interviews and how to proceed from there.
Validate your low-evidence riskiest assumptions first
To validate your riskiest assumptions, it's time to start engaging with potential customers with some DIY market research. Validating means finding the evidence that confirms your beliefs. The best place to start is within your network of contacts. Start with the people you know: friends, family, and professionals in your network who are willing to help (and their connections) provides an opportunity for direct feedback and saves money in the process.
You can also use SaaS services for recruiting interview subjects, which is becoming increasingly inexpensive. Last but not least, many early-stage companies we work with, and not only in the healthcare industry, recruit and screen their own participants for market validation. This can be done even with a simple Google form and basic Google, Linkedin or Facebook Ads to reach the right people, screen them and schedule interviews or meetings.
Talk to your (potential) customers
Interviewing your customers with an open mind is key. Ask them questions about their past experiences, needs, the current solutions and alternatives they use. Listen especially for pain in their answers, as this will help you identify opportunities for improvement and potential value propositions.
Focus on their past experiences much more than on what they'd like to have or do in future. Refrain from what-if questions. What people say they'll do and what they actually do are most often two very separate things, so focus on understanding what they did before and the deeper reasons for their actions. Remember that since they do want to help you, they will unwillingly try to produce answers that they think you might be looking for.
5-7 interviews should be enough to tackle the biggest risks quickly, update your assumptions and ask yourself new questions. A usual Research Sprint takes no longer than 4-5 days, including the time to recruit, screen and schedule the interviews, and yields heaps of valuable insights.
Supplement interviews with desk research
Desk research using online forums, Facebook groups and App Store reviews can be a great way to supplement the results of customer interviews and provide you with more information. Online forums and groups for discussion about particular topics can be used to gain insight into the problems that customers face, as well as how they currently solve them. Reddit is similar in this regard but often provides more detailed answers, given its very specific subreddit structure and upvoting system.
Remember the regulatory affairs and compliance risks
With healthcare system-related digital health startups, there are often assumptions and risks pertaining to regulatory issues, as well as healthcare providers, insurers, and payors. Those will often require a separate inquiry with an expert from a specific part of the healthcare industry who can quickly assess what requirements in compliance, certification or clinical trials must be satisfied to make a specific digital health solution possible or acceptable to partners and other digital health companies.
Structure your concept with a Business Model Canvas
Last but not least – The Business Model Canvas and Value Proposition Canvas are useful frameworks to help you find and refine startup ideas. The former allows you to understand how your startup will operate, while the latter helps you define and articulate your startup's value proposition. Both of these tools come together (VPC is part of BMC) and can help you clarify customer needs and target customer segments. This process is iterative because as you move forward with the other parts of your Business Model Canvas, you'll discover more assumptions and risks that need validation.
After the interviews, you also finally have enough information to return to your previously drafted Proto-Personas and create full Personas, which will both help you test the startup idea further and will be helpful in your product design, development and go-to-market strategy for planning a successful company in the next steps.
What's next for your new digital health startup?
Congratulations! You've just taken crucial steps towards making your idea a reality on a budget. With the right strategy and approach, you can get valuable insights into customer needs and validate risky assumptions before investing in development costs. This validation process does not require any business plan writing but rather skillfully structuring your hypothesis, identifying your target audience, and digging deeper into this particular market for evidence and insights.
Prototype and test test test!
What's next? The next natural step is to create solution prototypes and test them with your customers. Experiment with prototyping options like paper and low-fidelity prototypes to iteratively inform changes. Take advantage of free design tools, customer surveys and A/B testing tools to help drive decisions. Don't forget to ask experts in the industry for their advice and insights as well. They can offer invaluable direction and are often much more open to sharing insights than many first-time startup founders expect.
Ultimately, the most important thing is to start taking action on what you’ve learned today as quickly as possible so that you can bring your digital health startup concept from proof of concept to product launch success! Go talk to your customers about their problems. Good luck!