How to Reduce Costs With Proper New Product Validation

When inspiration strikes, the last thought an innovator wants to entertain is that its intended audience won’t embrace it. However, investing in a software or digital product without ensuring market demand or verifying that it addresses users' needs to solve a problem can result in minimal or no return on investment.

CB Insights research has found that more than one-third of failed startups point to a lack of market need for their products. That data confirms that validating a product idea must be a priority. Controlling new product validation costs, like all phases of product development, is key to a startup’s success. 

Here’s how you can nail this process. 

What is product validation? Understanding the benefits of new product validation 

Product validation means providing your team with a clear picture of the product idea’s value proposition and how much interest there is for it in your target audience. 

Collecting information through product validation allows you to make informed decisions before investing time and money into your idea. It also provides insight into how the idea could be refined to have more appeal to customers.

Moving forward without product validation is risky. Investing in product development without knowing a willing audience is ready to buy can lead to losses, poor brand reputation, and business failure.

Furthermore, up to 80% of product development costs are dictated by the first stages of a project, so validating and adapting the idea early can play a huge role in a business’s financial health. 

Factors contributing to new product validation cost

Proceeding with a product development project without validation is unadvisable, and it has a hefty cost. Product validation has three key components contributing to its price, and we outlined them below.

1. Target audience market research and data collection

Market research is critical to smart decision-making. However, performing market research requires more than pulling up a Gartner report that indicates you’re on the right track with your idea. Thoroughly researching your market requires polling actual members of your target audience to understand potential customer’s perceptions of the solution you’re proposing. 

Companies can choose from several market research methods, including surveys that collect qualitative or quantitative data. Collecting market research data from your target market can be labor- and time-intensive, mainly if researchers use one-to-one interviews or travel to specific geographic locations to interview potential customers where they live or work. Companies can also use surveys, questionnaires, and polls to collect data and solutions like Dovetail to record and tag interviews so you can draw insights from them. 

Adding to the costs of market research are expenses related to recruiting participants if you don’t have access to your target audience. Using services like can help you connect with potential participants in market research projects but add to market research costs. 

2. Prototype development and testing

Prototyping, which allows you to test product features before building them at scale, contributes to new product validation costs. Prototypes can be as simple as depicting software screens on paper or cardboard. However, interactive prototypes enable you and members of your target market to experience what it’s like to use your product. 

Several prototyping tools are available that help create the prototype, from low-fidelity prototypes that are rough versions of the product to high-fidelity prototypes that provide a more detailed, interactive version. No-code tools, such as Bubble, offer sophisticated prototyping capabilities, and open-source frameworks like Vue.js and Tailwind, which Patent 355 uses, enable you to build a prototype that delivers an experience similar to using the final product as well as helping your team accurately estimate product development costs

Testing the prototype with tools like FullStory, and hiring or contracting resources to perform testing, can also contribute to new product validation costs. 

3. Consumer feedback and focus groups 

Once you’ve developed a prototype, you can collect usability data and customer feedback through interviews or focus groups. The costs of conducting research with focus groups are primarily related to recruiting participants for the research and compensating them. 

It’s advisable to proceed with caution with focus groups. Group members can sway participants or tell you what they think you want to hear. On the other hand, one-to-one interviews may provide more valuable data since you can collect honest information from participants without influence from others. 

How much does testing and validation cost? 

Software development costs vary significantly; for example, a minimal viable product (MVP) could cost up to $20,000, while a full-scale mobile app will have you shelling out over $100,000. When budgeting for your project, estimate that testing and validation costs can account for 20-30% of the total cost of launching a new product.  

How much does it cost to launch a new product? 

Many factors come into play when determining the cost of launching a new product, such as research and development, marketing, and distribution. The cost can vary greatly depending on the industry, your company's size, and the product's complexity. It's important to carefully consider all expenses and create a detailed budget before launching a new product.

Strategies to reduce costs in new product validation

Although new product validation is no place to cut corners, there are ways to control costs, including the following.

Leverage existing work

Even though your idea may be original, existing libraries and off-the-shelf products eliminate the need to start from scratch with prototype development. For example, if you’re testing an educational platform for dog trainers, you may be able to leverage open source educational software that has solved a similar problem. 

Efficient target market research techniques 

In order to successfully connect with your desired audience, it's important to understand their needs and behaviors. Staying up-to-date with industry trends and market demands will help you stay competitive. 

Utilize affordable tactics such as online surveys  to gather valuable insights and make informed choices about how to appeal to your market with your new product. You can also consider tapping into your personal network to try and recruit participants to avoid paying high recruitment costs.

Lean prototyping and testing

Your vision may be for a highly sophisticated application. However, solving your target audience’s problem may take less. A minimum viable product is the bare-bones version of your product that will meet your users’ needs. 

Beginning with an MVP will reduce the costs of product validation, testing, and development, enable you to take your idea to market more quickly, and then build a roadmap to add the features you envision for your final product. 

Online surveys and digital customer feedback channels

Some market research methods are more costly than others. For example, compare traveling to a metropolitan area where users can get value from your app versus performing surveys online.  Find the most cost-effective way to collect the accurate, relevant data you need to shape your project. 

Early adopter programs 

Enlisting early adopters to provide feedback about a new product can give you feedback you can use to refine an MVP, helping to focus investments on users’ priorities. This will result in a more attractive product for the market as a whole and more ROI for your business. 

Open innovation 

In the realm of reducing costs during new product validation, another strategy is open innovation. This principle revolves around the notion that a business can gather valuable information from external sources, rather than relying solely on its internal organization. It operates much like a "crowdfunding" platform for ideas, enabling the acquisition of insights that aid in the development, validation, and refinement of products.

By embracing open innovation, businesses can actively involve others in the fact-finding process during new product validation, leading to potential cost savings. Although it does not guarantee immediate cost reduction, soliciting early feedback and insights from individuals within or adjacent to your industry can reveal opportunities that may have otherwise gone unnoticed, thereby lowering innovation costs.

Implementing cost-effective new product validation 

Planning is key to developing an effective product validation plan—and controlling new product validation costs. To ensure the success of your project, it is important to have a well-planned product validation checklist. This checklist should include market research, prototyping, cross-functional collaboration, effective communication, as well as the necessary data and insights. By following this checklist, you can invest in your project with confidence.

Moving forward without a product validation plan will lead to higher costs, reworks, and gaps in the information you need to develop a product with the best chance of success in your market. 

Takeaways for innovators 

Understandably, you want to bring your ideas to market quickly and in the most economical way possible. However, it’s important to allow enough time to properly validate your idea. The best way to look at product validation is to ensure investing in a project with the greatest potential for return rather than an extra step that slows you down or pads project costs.

However, you can control costs when you validate your product idea. Make smart, cost-effective decisions about how to collect feedback from your target audience. Also, leverage existing libraries and products when you can. 

Additionally, beginning with a minimum viable product can help keep product validation and launch costs low overall. Thinking out of the box to establish an early adopter or open innovation program can help you collect the information you need to guide your project without the high costs of other feedback or data collection mechanisms. 

How Patent 355 can help

Startups often don’t have validation expertise, much less experience with developing a strategy that results in ample, accurate data for smart decision-making and a plan to control new product validation costs. 

With Patent 355 as your digital product development partner, you gain resources to help you validate your product and overcome other pain points you may experience with product development. Our team is also ready to assist or take the reins with project management, quality assurance, testing, building a prototype, and getting it in front of users to test resonance. 

Additionally, we do more than advise clients on addressing validation and product development. We use the same methods in-house to incubate our products and continually optimize them, so you benefit from that experience to give your idea the greatest opportunity for success. 

To learn more, book a strategy call.

Fuel & Friction Newsletter
Where tech meets behavior: 3-min gems for driving product growth.

Explore Our Services

Design and Development

We specialize in helping companies bring innovative products to market from idea on a back of a napkin to a fully functioning scalable product.

Customer Discovery Research

Gain valuable insights into your customers' needs and behaviors. Uncover hidden opportunities to enhance your products and strategies through in-depth research and analysis.

Product and GTM Audit

Discover the untapped potential of your product and go-to-market (GTM) strategy with our behavioral focused comprehensive audit. Our experts delve deep into your product's to identify areas for improvement.