What's the best way to validate a SaaS idea?

I co-founded a SaaS company and have advised several other SaaS startups. We thoroughly validated our product before writing the 1st line of code. It saved us a ton of cash and time because we made a pivot before development, despite being veteran domain experts of our target market.

I consistently see startups gloss over the validation step and proceed to waste $50k - $100k in development (and re-development) costs validating their product when it can be figured out before the expensive development phase... Take your time and do this RIGHT!

There is not much in the question about what you already have (i.e: target market, research, clickable mockups, etc.) So I am going to assume you just have an idea.

I give an educational talk called “Idea to Revenue: 5 Steps to Validating your Startup Product”. It is quite an involved topic so for the sake of this answer I will give an outline of the ‘How To’ without the examples and ‘Why To’ explanations. Contact me for more details or help with your specific scenario.

----- The 5 Steps -----

#1: Idea - Brainstorming & Research
Research
- Identify competitors (crunchbase, google, app store, etc..)
- Does your idea exist already? (Google Patents)
- Can you do it better, faster, cheaper?
Brainstorm - Identify huge opportunities to disrupt the market
- How are people addressing the problem now?
- What disruptive technologies can solve the problem?
- Where is the competition missing the mark?
- See non-competitive products for more ideas

#2: Plan - Narrowing the Focus of your Product
- Document your Assumptions
- UX hypothesis
- Goals for the product
- Define the MVP
- What features are required to sell the product?
- Connect the functionality to the product goals
- Define metrics for success
- Define customer personas

#3: Sketch - How to Use a Quick Drawing to Determine the Interface
- Create a sitemap of the product
- Use pen/pad to sketch the interface
- Design whole tasks that testers can complete
- Show the connections between the screens (information architecture)

#4: Clickable Mockups - Create a Realistic Demo of How the Product will Look and Work
- To create a realistic interface use the following tools to mockup flat designs for each screen that you sketched (*hint: use real copy)
- Desktop: photoshop/sketch or axure or a similar program
- Mobile: AppCooker or Proto.io or a similar program
- Use Invisionapp.com to connect the flat designs so that the user can click/tap on the buttons and transition from screen to screen. This will give the tester a ‘real enough’ experience to complete tasks and answer questions about its viability

#5: Customer Testing - Getting Real World Feedback
- Use Questionnaires and Interviews
- Collect qualitative and quantitative data to prove or disprove your assumptions for each persona from step #2
- Repeat the Design/Learn feedback loop until the testers can consistently complete the tasks that you have mocked up. Additionally the quantitative data should suggest that the product will solve a significant enough pain point that they will pay for it.
- You can find testers in your network, linkedin, facebook, twitter. Just ask people for their valued feedback on a new and exciting product :)
- I received a 51% response rate on a Linkedin feedback campaign. I am happy to share the how that works and the exact templates if you contact me.

This is a down-and-dirty overview of how to validate your SaaS product. As mentioned above there are more details, examples and explanations but if you follow this outline you will be ahead of the game. Feel free to contact me for further help.

Cheers,

--Ryan

The best way (in my experience) is try to deliver the value but in a old-school way (not software related). Sometimes this is not possible, so you want to try to get as close as possible to what would be your product.
Example: I wanted to know if people would pay for software that would help them curate and manage their social media feed but get it deliver by email (for 40+ audience). I curated Twitter, LinkedIn and other social network where I could get graphs and started and email list. I got feedback that it was very useful and then I ask them if they would pay for it and how much.

My advice is: find the real value that your SaaS will deliver, and try to do it manually in small scale. Then try to get paid for it. If you get customers, then you may build something to serve them.

**sometimes this is hard to do if the problem you are solving is very complex. In this case you should pitch the solution to possible clients and see if there is enough interest for pre-sales or if they commit to a pilot