The validation of a product is an essential process for the survival of any startup. However, transforming an idea into a viable product and subsequently creating a strategy to introduce it to the market are complex steps that demand a profound understanding of the problem to be solved and the target audience to be reached. This essay addresses the first stages of this journey, exploring the creation of the "solution idea" and the formulation of a "market entry strategy" based on the concept of early adopters and the use of the MVP (Minimum Viable Product) as an initial validation approach.
Welcome to the first edition of Kamelo in English, a project aimed at connecting with even more people interested in strategies for startup development. I’m Luiz Gomes, and this is a space where we can learn together about this entrepreneurial journey in the digital market.
1. Creating the Solution Idea
The development of a product begins with identifying a specific need or problem. The solution idea arises from a deep understanding of a real pain point in the market, aiming to solve this problem effectively and directly. On my last workshop about product validation, emphasized the importance of conducting a thorough analysis of the problem, observing existing practices, and identifying gaps or inefficient processes that the solution can improve.
A concrete example he used was the digitization of processes in the funeral industry. The analyzed startup identified that the various stages of a funeral involve multiple agents (or "actors") who, despite sharing a common goal, operate in a disconnected and time-consuming manner. In this context, the idea emerged for a digital solution to optimize the process and integrate the various actors involved, offering greater speed and efficiency. This example illustrates how a solution idea is more effective when:
It addresses a real problem: The initial recognition of the problem came from the slow processes and lack of integration among the different agents. The startup proposed the solution idea based on process optimization.
It considers the impact on the end customer: In this case, the target audience includes both process operators and end customers, who would experience a less traumatic and more practical service.
Another relevant point in the conception of the idea is understanding that a solution idea must be flexible and adaptable during development. I emphasized that at this stage, the solution idea is only the starting point: it needs to be tested and constantly adjusted, serving as the first step to becoming a prototype and, later, the final product.
2. Market Entry Strategy: Defining the Target Audience and Testing the MVP
After conceiving the solution idea, it is necessary to define a market entry strategy. This stage is not just about launching the product but identifying and capturing the right group of consumers willing to test the innovation — the so-called early adopters. These initial users have a profile open to experimenting with new products and are critical for gathering initial user feedback.
For me, this process involves the following steps:
a) Identifying Early Adopters
Early adopters are consumers willing to test an innovative solution, but I emphasizes that they do not always represent the larger market. In other words, this initial audience does not definitively validate the business model but provides crucial first impressions of the product and how it can be used. I suggested that to find these users, startups should look within the market for those already showing interest in new ideas and who may be willing to help refine the product.
In the funeral industry example, early adopters were identified among owners of smaller funeral homes interested in optimizing their processes and reducing costs through innovation. This initial group served to test the first version of the solution but did not provide full validation of the business model, as this early phase involves more concessions and personalized adaptations that may not recur during scalability.
b) Developing the MVP (Minimum Viable Product)
The MVP is a simplified version of the product containing only the essential features needed to solve the identified initial problem. I emphasized that the MVP serves not only to introduce the product to the market but also to gather real information about user behavior, such as acceptance, usage frequency, and operational challenges.
Using the MVP, the startup can quickly test the value of the solution and adjust it before investing in a more robust version of the product. In the funeral industry example, the company created an MVP that facilitated the integration of process actors, improving communication and reducing response time. This initial launch enabled the company to assess the solution's reception and better understand client preferences for billing and usage.
c) Pricing Models and Consumption Monitoring
Another crucial point in the market entry strategy is defining a pricing model suitable for the consumption behavior identified among early adopters. I was mentioned that initial MVP tests revealed usage patterns that influenced pricing strategy. For example, clients resisted a fixed monthly fee because the number of monthly operations varied significantly. In response, the startup began offering operation packages instead of a fixed subscription, adapting the model to clients' variable workflows.
This pricing adjustment was possible due to direct interaction with early adopters and consumption monitoring, which allowed the startup to better understand client preferences and payment patterns.
Conclusion
In product validation, creating the solution idea and defining a market entry strategy are critical stages that lay the foundation for product adaptation and success in the real market. The solution idea must not only solve an identifiable problem but also be flexible and adaptable to become a prototype and eventually an MVP. This MVP, launched to an initial group of early adopters, provides valuable feedback that helps the startup adjust its business model, especially in aspects like pricing and market approach.
The initial market entry strategy allows the startup to validate the solution in a controlled context, refine its processes, and create a business model aligned with real market consumption. Although early adopters provide an essential first validation, the market strategy must evolve to capture a broader audience ready to adopt the solution on a larger scale and in a financially sustainable manner.
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