Technology is an important part of everyone’s daily lives, and a highly competitive tech and hardware market constantly tries to capture the attention of potential customers and their purchasing power. Despite the feedback of surveys and focus groups, many consumer products fail after launch. Recent data shows a 90% failure rate. This reality has forced startups to find a more reliable method to verify market validation. Startups are now turning to intent-based platforms, where interested buyers confirm their interest with a down payment on the product.
Failure of Traditional Research
The high rate of product failures in the tech market is of considerable concern for startups that invest money and time in the development of their products. Losing substantial amounts of money on a product that originally tested well in traditional research can bankrupt startups.
Traditional market research relies heavily on focus groups and research panels. Focus groups usually bring together between 6 and 12 people to review and discuss a product, who are then asked specific questions about their interest in the product and provide feedback. These sessions last for a few hours, and the participants are paid for their time. Research panels work like focus groups, but are used repeatedly for different products over a set period. They, too, are paid for each session.
The heavy reliance on this type of feedback is suspected to have led to the concerning number of product failures in the tech market. The belief is that because the focus groups and research panels are paid for their opinions, their input is biased or inauthentic.
After many innovative products have failed to catch the attention of consumers, startups have turned to other methods of research.
Real Consumer Feedback
Startups are now using intent-based platforms that feature products in development and gauge interest through different means than focus groups and research panels. PreLaunch is one of these intent-based platforms that helps startups evaluate genuine interest in their high-tech products. This takes the risk out of launching a new product into the marketplace.
Instead of paying for feedback, consumers make small deposits on the products they are interested in. The deposits are usually between $5 and $10 and prove their intent to buy the finished version. There is a high correlation between those who make a deposit and later go on to buy, which averages between 60% and 70%.
There is also a benefit to the customer browsing an intent-based platform. They gain early access, a spot on a waitlist, and usually receive discounts on exciting new products. People browsing also have a “No Thanks” button they can tap, which provides valuable feedback from “non-converts.”
A typical sample size is around 10,000 visitors per product test. The platform tracks the behaviors of each visitor, noting page visits, subscriptions, and reservations. Data is also gathered through the use of AI interactions and surveys.
Even pricing can be affected by this valuable resource. Pricing insights resulted in one product on PreLaunch having a 50% increase in market price.
“Our system helps them discover that ideal audience and optimize their strategy before spending on production,” says Narek Vardanyan, founder of PreLaunch.
The Power of Feedback
It’s estimated that 90% of brands misidentify their customer base and miss their target audience. Through intent-based platforms, startups can discover their true customers and how to appeal to them. Additionally, feedback from genuinely interested consumers can help refine products before launch.
Through the use of real consumer feedback, startups have the power to stay on top of their consumer base, ensuring they are marketing to the right customers. This allows them to know what to focus on for production, leading to a more successful company.
