Market validation and setting the scene

There are a number of words, methodologies or approaches that all are focused on doing the same thing…creating evidence that someone wants to buy what you’re producing. 

This is the second year in a row our first block course has focused on market validation.

The reason:

We’re getting all the companies aligned in their thinking that solving a problem for a customer is the most important focus the company can have. 

Alongside this we spend some time setting expectations on what is involved in the next six months.

We like to approach market validation from a number of different angles:

JD Trask
  • Real life stories
    • This year we had JD Trask, CEO of Raygun, come and share his and his company’s journey. He touched on a number of items, but what stood out most to the Sprout companies was the ongoing work Raygun does to keep the feedback loops open with customers to ensure their customers love their product and will keep using it.
    • Stu Bradbury spoke about his experiences in developing products customer’s wanted in the agricultural sector. From farm mapping, livestock trading and variable rate irrigation, Stu has a strong handle on the work required to get farmers and growers wanting to buy your product.
       
  • Theories/Methodologies
    • Sprout utilises a number of common methodologies including ‘Business Model Canvas’, ‘Lean’, ‘Agile development’ and ‘Customer development’ models.
    • Customer Development:
      • The customer development model was created by Steve Blank and is discussed at length in his book ‘The Startup Owners Manual’.  In this book he gives highly practical steps in how to move through the process of being a start-up.  It involves four key steps:
        • Customer Discovery
        • Customer Validation
        • Customer Creation
        • Company Building
      • We focused heavily on the Customer Discovery process.  This process recommends companies hypothesized the specifics of what they believe their business will be:
        • Customer definition
          • Problem definition
        • Product/Solution definition
        • Demand creation
        • Market type
        • Distribution and pricing
  • Peer to peer discussion & learning
    • We are fortunate at Sprout that a number of our teams have farmers or growers as representatives in their teams.  This means there is a lot of value for Sprout companies in presenting and giving feedback to each other on what they’re currently doing. 
    • At our block course this came in the form of multiple attempts at pitching the Customer Discovery information and allowing time for questions from the other Sprout companies.

Market validation is ingrained in everything Sprout does. 

While the block course is key to kicking this process off, the Sprout companies revisit their customer discovery hypothesis every week during the programme and we expect them to be constantly adjusting and learning. 

Markets move very fast and we believe that the concept of aligning your product/service offerings with the market needs to be a dynamic and ongoing process.

We are looking forward to seeing where all the companies get to over the next few months.