Product validation: how to validate your new product or service idea [ep.14 transcription]


Darren Moffatt (00:02):

Hi there and welcome to the Nerds of Business podcast. My name is Darren Moffatt. I’m a director at Webbuzz, the Growth Marketing Agency. And I’m your host. It’s great to have you with us for episode two of season two on the theme of product development. Now, if you’re new to this podcast, our vision is to make entrepreneurs happier by solving the key challenges that all businesses must overcome. One problem at a time. In the previous episode, we looked at the challenge of product ideation. We revealed how design thinking and product development frameworks are used by corporations and design gurus to develop those billion dollar business ideas that literally change markets and make careers seemingly overnight. The notion that all you need is a powerful idea is seductive, but of course it’s a fantasy. The reality is that ideation is just the beginning of a long, often arduous journey towards a fully developed product that the market might actually want. Arguably, the real work starts with the next stage in the development process. Product validation you’d expect that big brands with plenty of resources would be careful to get this step right, but it often doesn’t work that way for one reason or another. Even the most successful companies are sometimes guilty of launching terrible products. That sounded like a good idea at the time. And as we’re about to hear in our opening story, the entertainment industry is no exception.

Darren Moffatt (01:55):

The year is 1981 Raiders of the Lost Ark is a massive box office smash at the movies its success with young audiences has given the famous director. Steven Spielberg, an idea for a new product. His theory is that movies can cross over to become a hit in the burgeoning market of video games to test this hypothesis. He partners with a small Silicon tech startup called Atari. The company gives the task of coding the game to a young prodigy called Howard Scott or Shaw. It takes him 10 months to design the Raiders game, write the code, get user feedback, validate the concept and put it through quality control when it’s finished or shows the game to Spielberg. He loves it and he pays Warshaw. The ultimate compliment by saying that the game is just like being in the movie, the product is then released as a game for the Atari 2,600 console.

Darren Moffatt (02:58):

And it’s a commercial success. This is where the real trouble begins. It’s now July, 1982. And Steven Spielberg has another big movie scheduled for release in Christmas of that year. E T is the story of acute alien lost on earth and trying to get back to his family after negotiating a license fee equivalent to $53 million in today’s money. Steven Spielberg demands that Atari put the young Warshaw on the ITI project to again, work his coding magic, but the extensive legal delays between Atari and Spielberg’s production company mean that this time Warshaw has just 36 hours to devise a game concept to make matters worse. He’s given only five weeks to code the entire game so that the product can be manufactured and shipped to retailers in time for the Christmas movie release. Although initial sales are strong on the back of enthusiasm for the film, it soon becomes clear that the Atari ET video game is a Christmas Turkey.

Darren Moffatt (04:07):

The game concept has no real relationship to the film plot and users find it confusing to play because of a weird six sided world that keeps returning players to the same screen again and again, without explanation, the game soon receives a stream of harshly negative reviews and sales quickly dry up retailers demand an official return program for all the unsold stock. And it ultimately leads to the end of the Atari 26 console as a viable product in September, 1983. The Alamogordo daily news reports that between 10 and 20 semi-trailer truckloads of Atari boxes, cartridges and systems from an Atari storehouse in El Paso, Texas had been crushed and buried at the landfill in the city limits and then covered with concrete this forever dooms the legacy of the ET game, which goes on to become universally regarded as the worst video game in history. And it’s all arguably because they ran out of time and failed to undertake any product validation

Speaker 3 (05:18):

E.T Phone home.

Darren Moffatt (05:25):

Now there are a few really interesting footnotes to ET game story. The first is that the burial of the ET cartridges was the basis for a film in 2014, an independent science fiction comedy called “Angry video game nerd: the movie” was released now I’m not making this up. You can actually read all about it on Wikipedia. It even featured the game designer himself. And that brings us to the second footnote. What actually happened to the young Howard Scott? Well, many years later after stints in real estate and computers, he’s made his name as the Silicon Valley therapist. He now tends to the bruised psyches and fragile egos of tech leaders, which goes to show that there’s a big market of stressed, burned out startup founders out there. Now I’ll bet that one of the main causes of this stress is a failure to properly validate product ideas.

Darren Moffatt (06:25):

I know this from personal experience in 2013, my partner and I launched a social networking site for neighbors. Now, we quickly got mainstream media coverage and attracted thousands of users. We thought we were on the way to success, but in fact, because our validation was poor, we were just beginning a very frustrating journey into failure. Now, ultimately our story ended well. We took our learnings from the startup and pivoted to a growth agency model. That’s still going strong today, but only after we burned some serious cash and put close personal relationships under real strain. So if you’re thinking of doing a startup or creating a new product, what can you do to properly validate and avoid the pain of a poorly conceived idea that no one wants.

Speaker 2 (07:21):

I love data. You need to have systems need to have structure. You’re going to get shocked to pieces is unstoppable. We kind of hit a point where we were like, we need another round yourself with people who are smarter than you and reaching. This

Darren Moffatt (07:42):

Is nerd of business. We’ll start the show in a minute, but first a word from our sponsor.

Ben Carew (07:55):

Hi everyone. It’s Ben Carew here. I’m a director at web buzz, the growth marketing agency. I work alongside the host of this podcast. Darren Moffatt, if you’re a business owner who wants to grow, but you don’t have the spare funds to invest in marketing right now, you’re not alone. Since COVID hit, we’ve noticed more clients suspending campaigns or delaying their marketing altogether due to cashflow issues. In response to this, we developed a solution called buy. Now pay later digital marketing. It provides eligible small businesses with nothing to pay on SEO, digital marketing, and website development for up to three months, we think it’s perfect for entrepreneurs who need a helping hand getting sales flowing. Again, I’ll be back later in the show to explain how it works, but if you can’t wait, you can download a free info pack. now that stands for buy. Now pay later that’s

Dr Wei-shin Lai (08:57):


Darren Moffatt (08:59):

So the title of today’s episode and the problem we’re trying to solve is how to validate your product idea and avoid creating a money pit that destroys your life. It’s a really important topic today, and we’ve got some truly inspiring guests on the show. You’ll hear from a Norwegian bar, prop tech founder. Who’s worked for Uber and Google and will completely nerd out without two product design experts and stay tuned for our feature story with the founders of a acoustic shape, their electronic hardware manufacturers who have sold over 1 million units globally of their hip product sleep phones. Here’s a sneak peak.

Dr Wei-shin Lai (09:41):

Yeah, it was kind of a blue ocean, uh, uh, thing where we just landed on a, on a category that nobody tapped into. You know, it’s, it’s, it’s, it’s definitely a niche and we’ve discovered that kind of the hard way over the years.

Darren Moffatt (09:56):

But first here’s just a quick reminder that if you’re enjoying Nerds of Business to please hit the subscribe button on your podcast player, it means you’ll automatically receive each new episode every fortnight. And it makes it easier for us to stay in touch when it comes to product validation. I think a good place to start is a technical explanation of the concept for this. I turned to Carrie Peters. Carrie is one of our two product design experts with this series. She’s product design principal at Sydney agency, us too, originally from Oregon via New York, where she’s designed for the likes of Nike and class pass. She’s now a leading exponent of human centered design. I began by asking her what exactly is product validation.

Carrie Peters (10:45):

Um, product validation is basically, um, at its essence. It’s just finding ways to test our assumptions about ideas and concepts, so that two different things can happen. Either one, we gain a lot of confidence that, yes, this thing that I thought was a winner is in fact going to be the best thing ever or, um, to you fail really quickly, um, in a sort of safe environment, um, before it’s actually in the hands of your intended users or out in the world. Because if you wait till then to find out if it’s gonna work, um, you probably won’t make it. If you find out early, you can iterate sooner and then you can potentially make that concept even better.

Darren Moffatt (11:24):

Now that is, for our listeners I might just sort of bold and highlight this particular section, uh, sort of in a, in a Sonic way, um, failing fast, that’s obviously an established concept in sort of lean methodologies and startup land. Um, and this is a mistake that I’ve seen quite a few people make. It’s a very common mistake. I’m sure you’ve sounds like you’ve seen it yourself. Oh, I’ve participated

Carrie Peters (11:54):

In it. It’s hard because I know what it’s like, you come up with this idea, right? And you just, you’ve talked to a few people and people build onto it and you get really excited. And I I’ve done this, like I’ve done this with ideas, um, and even started to design things up. But I think the thing that, um, that these processes and training yourself in them and putting them in your toolkit give you

Carrie Peters (12:18):

Is they, they help you remember

Carrie Peters (12:21):

That ideas and products or services. Um, they don’t live alone siloed. They live once they launch, they live amongst many systems around other products. Um, and in environments and contexts that you may not have thought about. Um, so, you know, we design and think about things and, and our imagining the ideal situation, but in reality, a good product is one that can be used in the worst of situations. Right. Um, so that’s essentially what you want to try and, um, you want to try and simulate, you know, those situations. And so in order to do that, um, there’s a few different things you can do. I think there’s this framework that’s really helpful. Um, it’s basically like the sweet spot of innovation and there’s these three lenses. I’m sure you’ve seen it before. Um, the three lenses of a usability or desirability, which is basically, um, what people want, um, and can, or will use there’s feasibility, which is the, um, the materials and tools that we have to make it.

Carrie Peters (13:19):

And then there’s viability, which is about how the business model and the value exchanges between the different people that are using the product. Um, if they’re enough to make us sustainable. So these three lenses, um, feasibility, viability, and usability, we look at those three things, um, and we have assumptions across all of them. So we do this thing called assumptions mapping. You write down, basically all your assumptions across all those, those things, you know, um, what you assume users will do, what you assume that the technology is capable of. And then what you assume will make a, um, a sustainable business. You ride those up, all up on, on post-its. And then we just do a simple matrix with two different axes, um, one accesses risk, low risk to high risk. And then, uh, the other is known to unknown. And basically what you’ll find is, um, there’ll be assumptions that would be high risk.

Carrie Peters (14:08):

Um, like for instance, walking across the street, it’s very high risk if there’s a car coming, right. But if you’re walking across the street on a crosswalk, um, you kind of know that you’re not going to get hit because there’s rules of the road that you can kind of trust people are going to follow and that you probably won’t die, but there might be an assumption. Um, that’s both high risk. So you’re walking across the street again, but not on a cross crosswalk. You don’t know if that car is going to slow down. You don’t know if they don’t see you, they aren’t expecting to slow down because there’s no road signs to kind of tell them that. So you’ve, in that case, you’ve got a high-risk and really unknown situation. And it’s those types of assumptions about your product that you want to go out and, um, experiment on. So you’ll set up experiments then to see if you can validate or invalidate or gain confidence in those things that are those high risk unknown items in that quadrant.

Darren Moffatt (15:00):

Well, that is a wonderfully again, wonderfully nerdy. And I, and I loved that. That was a great, a really great visual example as well. Thanks for that, because I think that really paints a picture for listeners today. You know, essentially what we’re talking about here. Uh, another way to perhaps just describe what, what it is that you and your colleagues do, it’s, it, it, it’s almost like a, um, and I use this term very affectionately, a mad scientist, uh, experiment in the real world. Would you say that to fair?

Carrie Peters (15:31):

Absolutely. Yeah. Which is also called efficacy. Sometimes it’s not about, um, uh, if it’s effective, if the thing would work in an, in a, in a silo, it’s about like, does it work in the real world? If you throw it up against the wall, does it have, do people have efficacy with it? Can they actually use it in those situations?

Darren Moffatt (15:48):

So that’s what validating a product is, but how does it work? Ross Gales is a director of design and strategy at Sydney agency. Pollen. Ross has designed product solutions for some of the biggest brands in Australia, including Gumtree, which is owned by global giant E-bay. And Ross of course, is the second of our product design expert for this series. I asked him from a technical perspective, what are the key processes that entrepreneurs can use to successfully validate their product idea? Yeah. So look, building a new product is a, is a massive learning process for anyone. And I think the biggest tip I can can give anybody is just to think lean particularly for a new business idea. It really is a lot of time and energy can be wasted very quickly. Um, if we’re not thinking lean, what do I need to do to get to the next stage?

Ross Gales (16:42):

And it’s about doing just enough to get the right learnings in order to progress. Lots of people talk about lean methodology and it’s really quite simple. It’s it’s, it’s keep it simple, stupid. It’s the kiss principle. Yep. Yeah. So, so I think the, the less people bandy around words like the MVP or the MMP nerdy now that’s, that’s, that’s super nerdy roster. Um, I know what MVP is, but you might like to explain that for our listeners. So it’s like an MVP is a minimum viable product. And I think that word viable is the problem that I’ve got with an MVP framework. So that for something to be viable, it just needs to function it’s to do the bare minimum. And yes, that aligns with my lane sort of methodologies, but what I, what I’m more of an advocate for. And, and with that sort of getting too jargonistic about it is is the MMP or the minimum marketable product.

Ross Gales (17:32):

And the reason I like that term is that it’s about something that’s worth talking about. And if you’re taking a new product to market, it’s one thing for it to function, that’s the MVP, but for it to deliver the types of value that are worth talking about, and that’s where things start to get a bit more interesting and you something a bit more tangible to use in a conversation with your customers and really start to build that relationship and deliver value to them. So even at the early stages, I suggest to our clients, do the MVP, do all the must have features that the platform needs to function, but find some things that are worth talking about, definitely invest in building something that’s going to be a real value driver for your users. And lastly, look a framework that I talk a lot a lot about when validating product ideas.

Ross Gales (18:19):

Um, I’m a big advocate for inclusive design, and I think this is a really big topic. Um, probably too big to unpack in this, in this session. Um, but it’s really about ensuring that nobody gets left behind by your design. Okay. And I think a lot of small companies, particularly in startup world invest in doing just enough, but with a very small lens of who the user is. And without thinking more broadly about what are the different requirements, particularly in a multicultural countries like Australia, um, of, of how do we address people, um, in different languages with different sort of cultural understandings, different literacy levels, just really understanding because one of the, one of the things I advocate for is the growth potential in, in making sure that all people are included in the platform. People see it as being a bit of a accessibility edge case.

Ross Gales (19:11):

It’s a small audience. It’s not, it really is about making sure that everybody gets access to the same tools and services and can have the same experience. So the principle is inclusive design, as you’ve just outlined. There obviously makes a lot of sense. And when you, when you consider a couple of facts, you might already be aware of this, but one, you know, some of the major newspapers like the daily Telegraph, for instance, they on public record of saying that they, the writing in that publication is pitched at the functional literacy level of a 14 year old, because that is what that is the actual average for the older demographic, absolutely for the younger demographic, the better, but for the older demographic who are buying the papers that’s delivered, it has to be pitched at. And so these kinds of issues must open up lots of challenges for designers because, um, you know, it’s not a monocultural society anymore, as it once was, you’ve got these educational and, and, uh, sort of literacy, uh, constraints.

Ross Gales (20:14):

And, um, to illustrate my point, um, I noticed, uh, there’s a famous, um, recent advertising campaign by Bankwest where they’ve gone digital, it’s a character morphs into an avatar. And, you know, I think that’s partly because of the society in the age we live in now, like you’ve got to be a blank canvas. Um, what are your thoughts on that? I mean, H how that must be hard to kind of aggregate all of that fragmentation in the D in the demographics and the psychographics of the, yeah, look, it sure is. And I think there’s some, there’s some basic principles in the way you design and build a product that ensure that that most needs are being met. And, and that can be things about, as you say, um, ensuring the literacy levels, right. For your, for your audience. So if it’s particularly in, in financial services, you want to make sure that everybody’s got access to the financial products that you’re building.

Ross Gales (21:09):

So, so writing to, and, and I agree with the 14 year old or the, the year nine student is the right demographic. There’s some statistic I believe is over 50% of Australians actually have a low literacy level lower than year nine. Um, so that’s, that’s a big, big chunk of the audience of people who may miss out and, and pertinent information. Um, if it’s not articulated in the right way, but older audiences, um, you know, things like, um, the design high contrast ratios in your design, ensuring your font sizes is legible. These are just simple design decisions that you can make to ensure that everybody’s included and can access and use the platform.

Ross Gales (21:50):

And now for the entrepreneur perspective, Mina Radhkrishnan is the founder and CEO of PropTech Mina h.erself has a design background and was a product designer for Google. And also for Uber when they had just 20 employees, Mina has bought design thinking to the problem of property management. So she’s trying to make that less painful for investors by creating a platform that manages properties for just $100 per month, different has raised over $30 million in capital. So far from the likes of leading VC firms, square peg capital. I asked Mina what she did to validate the underlying value proposition of her product and what she shares has value for all business owners.

Mina Radhakrishnan (22:37):

Yeah, you actually, I think the validation comes in for you and start building a product. So one of the things that we did is, um, neither my husband or our designers, but we like pulled together as our rusty skills and stuff. It makes them like, you know, online working stuff. And we ran Facebook ads. We’re in Facebook ads with absolutely nothing. We just say, Hey, like, here’s the, here’s the, here’s the idea would you use? Would you add like, so we ran in to see, like, what, what do people click on? Do we get emails? Can we get phone numbers? Like, what is this something that people actually want, not a single developer, nothing else. It was just the two of us are trying to figure out like putting together, like the prettiest ads we could make and, and actually putting them on people on Facebook.

Mina Radhakrishnan (23:13):

And you can kind of, and you can do this, you can validate this for like $200. And then we just have a slightly more seasoned. And after we got like a whole bunch of emails and phone numbers, we’re like, okay, this feels like something that people are really to do. And that’s the point in which we actually started investing in doing anything with regards to building a product, building a company, kind of defining the rest of it. Um, and I, and I think that that’s really important is like, you have to start small, right? Like there’s no point in building when you don’t even know if you want to do the stuff. Right. Like, um, I think the, the phrase that I’ve heard around this is, um, there is a,

Mina Radhakrishnan (23:47):

There’s a gap in the market, but is there a market in the gap? And that’s the question that you have to solve for?

Darren Moffatt (23:53):

That’s a good one. I haven’t heard that one before. That’s great. And you’re quite right. I mean, it’s a very common mistake that first time entrepreneurs make is they go out and build this massive machine or sort of, you know, complex platform and what have you. And I haven’t really successfully or properly validated the idea. And of course, when you get to, if you take that approach untangling, that is becomes a very costly exercise. So, um, no, that’s, that’s a great insight that you shared there. Thank you. But in some industries it can be difficult or even impossible to fully validate a new product idea, hacks and work arounds are sometimes the only option hospitality is a great example. How can you test the market for a new bar or restaurant experience without investing millions on the venue and the fit out in the first place? Sven Almenning is the founder and CEO of the Speakeasy Group. They’re a hospitality business with eight venues across Australia. Sven is originally from Norway and he brings a real product design ethos to the service industry. And he recently launched a unique Viking inspired restaurant called Mjolner. I asked spin what approach to product validation he uses for his venues. And his answer is literally unforgettable.

Sven Almenning (25:12):

And at no point did we sit down and go, well, Viking seems to compete, coming into trend with the show and came from a place of biking and opportunity F & B space to take advantage of this emerging trend of Vikings. That was not something we ever did. Um, and we never thought it was going to be as popular as it was. Cause when I came up with the idea, everyone thought it was weird.

Darren Moffatt (25:38):

Everyone thought it was weird. Okay. So that’s so interesting. And that leads me to the next question. Like what did you do to validate the idea? Okay. So how did you test the market? Was there any kind of process or framework in place to validate the idea? Or did you really just go on gut instinct? It’s just like, we’re going to run with this cause I’m, I’m loving the idea myself.

Sven Almenning (25:59):

Yes. I’ve got a business partner who I worked with and we have developed, um, a singular question that has to be answered for us to do it. Obviously we will also do the financial forecasting and they should, it makes sense financially, but, um, uh, it’s just a single question. Is it a “fuck yeah” it, if it’s not a “fuck yeah” we’re not going to do it.

Darren Moffatt (26:24):

I’m loving that. I can’t tell you how much I love that. I mean, that is hands down. One of the best things I’ve ever heard an entrepreneur side, like, so it, there was no real validation other than you guys have an internal, um, kind of a question that you ask yourself and if, if a concept becomes so compelling to you guys as business partners, that it’s a “fuck yeah” then you do it. Yeah.

Sven Almenning (26:56):

Yeah. And if it’s, if it’s anything else, then we just wait for another moment. That’s going to give us that. There’s no point going out doing something we are kind of into it.

Darren Moffatt (27:05):

Right. Okay. Well, uh, listeners, you heard it here first, um, uh, spins, um, sort of, uh, trademark approach to product development is the “fuck yeah” process. And, um, yeah, we, we, we endorse that here at Nerds of Business.

Darren Moffatt (27:21):

And now for our feature story, acoustic sheep is an electronics company based in Pennsylvania, in the us. It was founded in 2007 by dr. Wei shin Lai, a family physician and her husband, Jason Wolf, who was a video game developer. Now, dr. Lai has struggled with getting back to sleep after patient phone calls in the middle of the night. And she needed to listen to some meditative music to help her relax, but headphones were bulky and buds were uncomfortable since there were no headphones specifically designed for sleeping on the market. They invented their own, the product is called Sleepphones and they’ve sold over 1 million units. It’s a brilliant product, listen to their fascinating entrepreneurial journey from the initial ideation phase all the way through and beyond product validation. Firstly, I’d like to, uh, welcome, uh, the two founders that a husband and wife team dr. Wei-shin Lai and Jason Wolf. Uh, welcome to the show guys. Thank you. Thank you. It’s great to have you with us. Um, so, um, look for those listeners hearing about Sleepphones, uh, for the first time I think we might just start with, you know, let’s paint a picture for the, for the product, describe to our listeners, uh, what the product is and then we’ll, we’ll get into the Genesis and how, how you put it all together.

Dr Wei-shin Lai (28:43):

Sure, absolutely. Uh, and they’re super soft, so they’re unlike any other headphones out there because they’re, they’re just soft and, uh, they look more like a headband than headphones.

Darren Moffatt (28:54):

That’s right. So for the listeners that are coming to this sort of just with audio only no video, um, the, it, these, this product is essentially looks like, um, a sweatband from the Jane Fonda, uh, aerobic videos of, of the 1980. It’s very groovy, nicely designed. Um, but, but in fact, uh, there are headphones inside the band. Yeah.

Dr Wei-shin Lai (29:16):

Yes. Uh, and then there are speakers that are very, very thin, um, and flexible. Uh, and then here we have, uh, a Bluetooth module that’s also thin and flexible with, uh, with a battery and the Bluetooth receptor and all of that kind of stuff. You barely know there. The key word is comfort.

Darren Moffatt (29:35):

Comfort. Yeah. Uh, no, look at it. Two fabulous, fabulous product. And it’s one of those products that you, you know, when I first came across it, I was like, Oh, well of course, of course someone has put, has done that. Well, I did, I think of that, you know, uh, so I’m reading and, and like all the best products, you know, they seem obvious in hindsight. Yeah. Uh, but I’m really keen to hear about the whole Genesis story, you know, like how, because, um, um, dr. Lee, your you’re obviously a qualified doctor, you were practicing, um, uh, general practitioner, I think. Um, and, um, so you’ve, you, you’ve pivoted into becoming an entrepreneur and you’ve got a very successful business now. So I’m really keen to hear the Genesis story, how this all came about and, um, yeah. And how you actually came up or discovered the product concept.

Dr Wei-shin Lai (30:32):

Uh, so as a doctor, I was getting phone calls late at night from patients, uh, and at 3:00 AM when they would call, then it would be hard for me to get back to sleep. Um, and you know, my mind would be racing. And my, uh, Jason here, uh, recommended I listen to some relaxing music. So he found me all kinds of songs with binaural beats, which are specialized tones that are supposed to kind of help my brain relax. And so I thought, great, sure. I’ll give it a try. But then, you know, I tried headphones and they’re bulky and you can’t sleep on your side. And then I tried to hear buds and they just poke into my ears and they hurt. Um, and so then, uh, we sat down, uh, night after night and just hammered out some prototypes. Um, first we had kind of an idea of, uh, putting speakers inside of like a fabric made a headphone, traditional headphone, uh, with cans and stuff.

Dr Wei-shin Lai (31:28):

But, but it was all made out of fabric, but that didn’t really hold very well. It didn’t stay on my head and keep it on. Yeah. Um, and we just use like different wires around the house and stuff to, to make our prototypes. But, uh, eventually we came up with the idea of speakers inside of a headband. And when, you know, I, I made one stitch one together and put it on and tried, it stayed on all night. It was super comfortable. Uh, it dawned on us that, you know, Hey, this is really interesting. Uh, well, you know, first we, we looked all over the internet and there was nothing. Um, this was now back in 2007. So, you know, the internet wasn’t as broad as it is now. Uh, but there was still nothing. Uh, Amazon was already around, there was nothing there. It was nothing on Alibaba, nothing like that. And so we, we basically had to come up with our own solution and this was it.

Darren Moffatt (32:23):

Yeah. So it it’s that really, that, that sort of classic entrepreneurial moment of discovery, you know, you had a problem, uh, you, you, you want, you needed to solve it and you couldn’t find a product to solve it. So you had to actually make one yourself. Yeah. So, um, so I mean it’s, and here you are, all those years later, you’ve got a really thriving business. So, um, you know, what research did you do to confirm the market opportunity? Like you, you talked a little bit about there, about how you, you know, you made your prototype and I want to get onto that in a minute in more detail, but, you know, when it seemed like, Oh, there’s something here, um, you know, how did you validate the idea?

Dr Wei-shin Lai (33:10):

So our approach at the time, it really wasn’t so sophisticated as is how we might do it. Now, everybody might do it now, but it just, the whole thing was, was very much driven by, you know, a little bit of lateral thinking, but, uh, just definite personal need. Right. And we really felt that need, and we, as soon as we’ve made it available to others, they showed interest. And so, so it was, it was that, that personal need, that lateral thinking and, um,

Dr Wei-shin Lai (33:37):

And just, just the validation of showing it to others was a big deal. But I think also like luck was a big part of it that, that we did happen to find something that, that really came together from all those three sources. Yeah. It was kind of a blue ocean, a thing where we just landed on a, on a category that nobody’s tapped into, you know, it it’s, it’s, it’s, it’s definitely a niche and we’ve discovered that kind of the hard way over the years, because we thought, well, everybody’s sleeps. So a hundred percent of people might be interested, right. But that’s not necessarily the case. It is an age. And perhaps because we did not do any market validation or research, um, and, and, you know, it was born out of a need for just me. Um, so we didn’t really anticipate on needing any of that kind of stuff.

Dr Wei-shin Lai (34:24):

We just kind of winged it and we put it out there. And then that’s what told us that this was a viable product. Um, you know, we made the first 500 pieces ourselves. Uh, we, we didn’t spend really any money. Uh, we didn’t go into debt. We didn’t have to have a startup fund or anything like that. We just, you know, spent maybe $20 here. They’re buying a few parts from radio shack and put it together. I always thought it was entertainment. I think we were going to be doing something in those days. So why not do something that, that, that could go somewhere. Right. You know, but I think the other key to this, uh, you know, gauging the market is it’s easy for me to say because all these things did align very well. Right. And we have to hit upon some of that was, that was just going to take off, but it’s also just being very honest with yourself and, and sober and just empirically looking at what response you get and judging that carefully. Right. And I, I honestly think that if we didn’t see the results we saw, you know, we would just wouldn’t, you know, clearly wouldn’t, we wouldn’t have kept doing it if it was questionable, you know, we weren’t, we weren’t gonna spend a lot that we didn’t quit our day jobs.

Darren Moffatt (35:31):

How long was it? Like, what was that period? Like, how long did it take for the product to kind of really hit some critical mass where you were like, Oh, okay. We can throw in the job now and focus on this five years.

Dr Wei-shin Lai (35:45):

I think, I think, uh, probably we were really conservative about that. I think others might have done a lot sooner, but

Darren Moffatt (35:53):


Dr Wei-shin Lai (35:56):

We weren’t risk takers in that regard. Yeah. We’re both high earners. Right. You know, he’s a game developer, I’m a doctor. We make good money in our day jobs. So why would we give that up for a hobby unless the hobby was going to make more money and be sustainable and something that we can actually depend on and live on longterm. Right. And so that’s, so it really depended on the product making more money than we did in our day jobs. And, you know, there was some lead time in that or threshold for letting those days jump. So it was pretty high, but it worked out

Darren Moffatt (36:30):

Well, clearly it worked out and I just want to kind of digress for a second and go into the psychology, um, of, you know, being an entrepreneur. Like, I mean, it sounds correct me if I’m wrong, but it sounds like this was almost a bit of an accidental sort of, you know, digression down a side road that ended up being, you know, the main journey. Right. But I’m interested in like w were either, or both of you, did you, uh, sort of maybe foresee this in your future, that you might go down this path where you always kind of, sort of entrepreneurial by nature where you, where you tinker is, you know, a lot of entrepreneurs start out as tinkering and, you know, putting things together and playing with different things, you know, like, is that where you guys came from

Dr Wei-shin Lai (37:16):

Floating things here or there. Right. But I just say, it just didn’t come from a, uh, from a place of extreme risk taking. Right. We, we, we wanted to find something that we knew would be solid. Yeah. I would say he’s definitely a tinker. Uh, he’s constantly inventing new things. You know, w we’ve got gadgets around the house that just have one purpose in the tragedy. Did you have to be really disciplined once you find something successful, or even when you’re trying to grow something, you have to really put the effort into that thing. If you do believe it’s going to be successful. So there’s always a bit of a tension there. Yeah.

Darren Moffatt (37:55):

And now another word from our sponsor.

Ben Carew (38:02):

Hi, it’s Ben again from web buzz, the growth marketing agency. I mentioned earlier in the show, how we’ve developed a buy now pay later digital marketing solution for small businesses, if you want to grow. But cashflow is holding you back where buzz offers you a way to invest in marketing with no interest and nothing to pay for up to three months. It’s a simple five-step process. And here’s how it works. Number one, book, a video meeting with our team to choose a digital marketing package. Three apply online for funding for get approved five, start your campaign with $0 to pay up front. You can use it for lead generation content branding, SEO or social media campaigns are buy. Now pay later. Digital marketing is just the thing you need to get sales flowing again. So get that life is good. Feeling back in your business, go to web that I use slash B N P L that’s web N P L, and download a free info pack to learn more.

Darren Moffatt (39:08):

So the problem we set out to solve in this episode was how to validate your product idea and avoid creating a money pit that destroys your life. Our product design experts, Carrie Peters from us too. And Ross scales from Poland revealed the theory behind effective product validation and why it’s such an important step for all businesses to take. And we’ve also heard some real life stories from our entrepreneur, guests, Mina at different Sven at the speakeasy group. And of course, Wei-shin and Jason at SleepPhones. I hope their wisdom and insights have given you ideas to crack the code to growth in your own venture. Now, as you can tell, product validation is super important for me. There are three conclusions that we can all take from this episode. Number one, identify your assumptions. Every product idea is actually a hypothesis of human behavior that is based on a range of assumptions.

Darren Moffatt (40:08):

You need to map these assumptions first before you can then validate or not number two, test and measure. So you can fail fast, get the data and use the frameworks to thoroughly. Test your assumptions. It’s okay if you’re wrong and it’s better to fail fast rather than waste a small fortune on building a white elephant. Number three, if all else fails, consider the year principal. I loved Sven’s approach, but this should only be used where conventional validation methods are unavailable. If you can use Facebook ads to validate like Mina suggested do it, don’t use Sven’s approach as a lazy cop-out, it’s simply too dangerous in the case of SleepPhones. Although Jason and Wei-shin admit to not doing any form of validation, it’s equally clear that were getting positive signals from their users, right? From the early days, these form, the basis of an informal validation process, which was crucial to their success, they themselves said they would not have progressed to venture without it. The brutal truth is that some or perhaps even most product ideas don’t deserve to live, but history is loaded with the broken dreams of founders and investors bought down by a kind of group self-deception that their idea will conquer all product validation is a much needed of reality against the over-hyped excitement that can cloud judgment in early stage ventures. If you’re an entrepreneur or business owner, you owe it to yourself and your family to do due diligence on any idea that may well dominate your life for years to come.

Darren Moffatt (41:53):

We’re coming to the end. But before we go, it’s time for our regular segment nerd under pressure where a guest has to share one killer hack or tip they recommend for you. Our listeners let’s find out who our nerd under pressure is today. Okay. Mina from, um, PropTech company, different. Uh, we now come to a regular segment of ours called nerd under pressure. And today Mina, you are the prop tech nerd. You’re the, um, property management technology, digital nerd. And we’re really asking for one killer hack, um, for our listeners around product development. And in particular, as it relates to validating your product idea, I’m going to give you five seconds of thinking time. Okay. Over to you.

Mina Radhakrishnan (42:52):

Okay. So again, I think I’m going to go back to pen and paper here. So this is going to assume that you’ve established that your idea is actually a good one and that’s where it might mind. That’s my Facebook ad killer. That’s my killer hack, Facebook pen and paper. It’s like, Oh my God, bring out your arts and crafts child. Right? Like I use my kids like kind of like stickers and things sometimes just like actually like cut out pieces of paper, especially when I’m doing mobile development to give people a sense of what it’s like to actually play with something there. And I think that that tactile nature of like picking, touching, pressing, especially when you’re building a mobile app makes a huge difference. So that’s my, that’s my one for product validation.

Darren Moffatt (43:24):

That’s fantastic. Thank you. That’s great. So, I mean, maybe we can take that a step further and we can actually say to our listeners look, uh, to, to sort of save on the arts and craft, go out and procreate have children first. Then you’ve got the arts and craft just lying around the house. Nice and handy. Um, fantastic. So thanks for listening to episode 14 of the nerd of business podcast. If you’ve enjoyed it, please leave a review on Apple, Spotify, Google, or wherever you listen to your podcasts. It helps us climb up the ranks and become more visible to other people. Remember we want to help as many entrepreneurs and businesses as possible. If you’ve got a question or some feedback we’d love to hear from you, you can engage with us That’s web So feel free to reach out and say hello. I want to thank all of our guests and the team at Webbuzz for helping me put this show together. We’ll be back in two weeks with our next episode, which is “product planning, how to develop your idea into a real thing people can actually buy”. Until then I’m your host, Darren Moffitt. And I look forward to nerding out with you next time. Bye

Darren Moffatt (44:41):

For now.


Ben Carew

Ben Carew

Ben is the Director of SEO Services & Analytics at Webbuzz. He started in graphic design and web development in 1999 and has ridden many of technology's waves since then. He co-founded social media site Housenet in 2013 and began moving into digital marketing & SEO from his experiences growing this tech start up. Ben co-founded agency Webbuzz with former band mate Darren in 2014.

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