Thats the point hes trying to make - you shouldn't wait until your product is developed to test out the market. You should talk to customers as early as possible. But you need a solid concept for a product to present to the customer in order to get quality feedback.

At the stage your at, I would be testing whether or not the problem exists... not what features they wanted on a product that has not yet been formulated.

The one key question your missing is "Do you find it difficult to raise seed capital for your startup?". That question deserves an open-ended textbox.