The Tuesday Roundup
I continued the idea validation series last week with part two: validating the buyer/user. If you missed part one: validating the problem, check it out here. This week, I’ll share another installment of the series, but first I want to share some extra context and resources about the buyer/user.
Before jumping into the buyer, just a reminder of the broader process you’re working toward here. The goal of this process is to generate and validate a product that solves a problem worth building a business around. I wrote an overview of idea generation on the HVL blog that you can read here. It’ll give a good overview of the bigger picture of this process before diving back into the weeds.
In essence, the critical piece of this puzzle is having enough knowledge absorption and immersion to imagine and build a future state. After questioning your assumptions, go back and ask yourself: if your ideal world exists, what would have to happen?
A major part of validating the buyer/user is figuring out whether you have a single buyer and user (or, the buyer is the one who will actually use the product) or if the buyer and user are different. In both cases, you need to understand the characteristics and motivations of the buyer and user. A tool you can use to do this is a customer persona. Here’s a quick guide to creating customer personas.
I shared this article from Profitwell in my post, and it’s worth resharing here. Willingness to pay is a major part of validating your buyer — it’s not just a pricing exercise. This article should help you understand the basics of WTP. It explains what WTP is, how it can impact your growth, and how to measure it. It should give a good foundation for your customer discovery interviews.
A willingness to pay formula doesn’t exist, as one of the big issues with any problem of economics is that humans aren't entirely rational. If you ask 100 people what they'd be willing to pay for a product, you're likely to get 100 different answers from your survey respondents. There's no formula that can be plugged into that will account for that. But although there is no exact willingness to pay formula, that doesn't mean you can't calculate WTP.
Let me know what you thought of this week’s newsletter here, on Twitter, or on Instagram. You can also visit my website shegunotulana.com to learn more about my advisory services if you’re interested in partnering.