Market Scouting and Metrics-Driven Market Validation

A practical method to turn new technologies into validated product opportunities

What is Market Scouting?

Market Scouting (aka metrics-driven market validation, MDMV) is a simple, structured method for researchers and inventors who want to find out where their technology creates real value.

It helps you move from invention to pilot project—step by step, by building and testing value hypotheses.

Why it matters

Taking a new technology to market is not a straight line. Most tools for early-stage innovation assume the product or customer is already clear. Market Scouting / MDMV works earlier. It helps you figure out:

• What your technology might actually be useful for

• Who benefits from it, and why

• Whether the benefit is measurable and worth paying for

How Market Scouting / MDMV works

The Market Scouting / MDMV process has 10 simple steps. Each step helps you form and test hypotheses - about applications, business processes, metrics, customer types, and people to talk to. In the end, you know where to start and whom to talk to about a pilot.

One key principle: MDMV delays customer interviews until the value proposition is clear. This avoids two common problems:

• Wasted time: Early feedback is often vague or misleading

• Wasted contacts: Every conversation uses social capital - use it when it counts

What you get

• A clear hypothesis tree that links your tech to concrete business cases

• Better use of your time and network

• Faster progress toward viable product ideas

The approach 

Market Scouting suggests the following process to build a hypotheses tree:

Brainstorm potential applications of a technology. Result is a list of application hypotheses. For one application: Build a list of business processes the application could affect. For one business process: Describe how the technology would change and improve the process.  Identify the metrics / KPIs that measure the performance of the old process and your new version. Describe the change of the KPI. Try to build a business case: What is the financial benefit for the customer if they use the technology?  Build a list of ideal target organizations that would profit most from these business cases.  For one target organization: Identify the key roles & personas in the target organization that would profit most from the business case. Shortlist concrete organizations and persons that you want to talk to.  Determine the best possible proof that will convince these personas to enter a discussion with you.  Develop a teaser & pitch from all the previous results to successfully reach out to a person.  Reach out to this person, meet, learn and refine your hypotheses. Ideally, you've found a partner to build a pilot project with.

This is not a linear approach where you follow the steps and are done once you've reached the bottom; rather, you navigate up and down this list and constantly explore new options as you go. After a few iterations, you'll have a reasonably good understanding of how your technology can be commercialized.

Obviously, every step needs a bit of preparation and some know-how. The Market Scouting / MDMV manual, available to customers, describes these. In addition, a software tool helps developing options and navigating the tree. 

Why it works

Market Scouting rests on the following pillars:

1. Customers buy benefits, not features: Focus on understanding the impact of a technology, not the features of a product.
2. Customer-first: Only customers can understand and assess the value of a product. Investors, experts, consultants, or coaches can provide additional insights and ideas.
3. Collaborative product development: The fastest way to innovate is to build a product together with a customer. Building a product in advance and trying to sell it later usually doesn't work.
4. Paid MVPs: Pilot customers contribute to MVP development. This is the key to their active engagement with the actual development and reduces the development cost and risk.
5. Empowering customer innovation: Market Scouting helps startups focus on the impact they generate with the customers, thus helping them innovate.
6. Focus on cost reduction in high-value processes: A technology's biggest impact is when it reduces the cost (or the risk or the duration) of processes that are very important for a customer.

Benefits of the Market Scouting / MDMV approach

Benefits for support organizations

1. Boosts Success Rates: Minimizes risks by focusing on customer-driven validation, increasing startup success.
2. Efficient Resource Use: Streamlined, step-by-step method ensures optimal allocation of time and funding.
3. Scientific and Technological Impact: Brings high-impact research to market, aligning with the mission to promote innovation.
4. Proof of Market Fit: Data-driven validation supports funding and strategic decision-making.
5. Financial Sustainability: Customer-funded MVPs reduce dependency on external funding.
6. Scalable Framework: A structured, repeatable method adaptable across diverse startups.

Benefits for technology- and science-driven entrepreneurs

1. Direct Relevance: Focuses on solving real market problems, enhancing product-market fit.
2. Reduced Market Risk: Customer-validated development mitigates entry risks.
3. Early Customer Engagement: Enables meaningful feedback from decision-makers, refining product direction.
4. Resource Efficiency: Conserves budgets by focusing on high-impact processes.
5. Evidence-Based Decisions: Uses KPIs to guide predictable, data-driven growth.
6. Clear, Guided Path: Step-by-step framework eases the journey from lab to market.

Next steps

Market Scouting / MDMV is currently in its third version and is rolled out in a university. Parallel to that, many entrepreneurs use it and help to improve it everyday. A software tool is work in progress. 

If you're interested in trying Market Scouting / MDMV for your support organization or your startup, reach out to j@janfuelscher.ch.