We validated our idea by SELLING a watered down version of the final product iteration.
Instead of the full web app we had planned, we used some code files and video tutorials our users could upload to their own servers. Everything worked...it just wasn't hosted on our app.
We focused our promotion efforts on a subset of our target market (one-man-shop online entrepreneurs who want to increase their email click-through rates). These one-man-shops knew how to upload files to their own domain...and our video tutorials walked them through the process. We also showed them how to modify and customize the graphic elements they purchased.
We built a one-page sales page and focused very succinctly on the benefits with a quick outline of the features. Then we ran traffic to it from an internal list. Finally, we took to Twitter to reach out to some of the influential 'product hunters'...and we got featured on ProductHunt.com!
Within a week, we had over 100 buyers! Product validated!
Now, we're spending the time and effort to build out the originally planned web application.