So you’ve had an idea for a new product, a product that you think could improve the work or lives of thousands of people and one that would be extremely popular – you need to know how to get on and build it, right?
In a tiny, tiny fraction of examples the answer would be ‘yes’, but for the overwhelming majority the answer is a resounding ‘no’. There are many activities that need to take place before a product is built, and there are even more that should take place if you are to maximise your idea’s potential and get the most out of any resource-heavy build, avoiding as much as possible any waste of time and money.
This article will explore some of the reasons that you should resist the creative impulse to build, and what customer-focused activities you can do to make the most out of not building.
When innovating, an assumption is a dangerous thing. An untested assumption is a problem waiting to happen, a hurdle waiting to trip you up. It is where your business risks lie, and before embarking on any build – before launching any new product onto the market – you want to make sure that all risk has been minimised as much as possible.
Now, many people (even established businesses that should know better) avoid challenging assumptions, and it's easy to understand why - it can be hard to hear. It can be hard to hear that your idea isn't perfect just the way it is. It can be hard to hear that it needs tweaking, necessitating even more research and tests. And it can definitely be hard to hear that it's completely wide of the mark.
But really what is the downside? There isn't one. Those hard-to-hears are all things that save you time, effort and money you would have wasted if you hadn't heard them. Don't treat your product idea like that bank balance you're ignoring until the overdraft warnings start coming in - face your potential problems head on by hunting for them in your business assumptions.
Assumptions, assumptions everywhere
So what sort of business assumptions do we make?
The short answer is everything. Everything that you know about your business, your industry, your market or your customers is an assumption until it’s been tested, until you know, to the best of your ability, that it is indeed true. Typical areas where assumptions lie are:
Can you sell your product or service at a price that at best covers costs in the near future, and that can scale as the venture scales? A lot of business ideas fail because owners put too much reliance on future sales supporting the business, but have failed to correctly investigate those future sales.
Can you create and maintain a team that can get the job done. The initial thinking is just about delivery, but a product with no way of finding customers is a failed product. You need to be thinking about every element, and therefore every capability needed to make it work. Are the right people already in your employment, and if so can you guarantee that they won’t have to work on other projects? If there’s nobody suitable on your staff, are you able to bring in freelancers (bringing you, once again, to check your financial assumptions). And either in your employ or on your contract, can you be sure they’ll be with you for the duration of product development?
This one can be a difficult pill for founders and executives alike to swallow, but it’s important to assess whether the right expertise or experience is in place to support the business through an innovation and/or product development process. Not only can the process itself benefit enormously from expert guidance, but the shift in business priorities can add extra pressures to organisation, accounting, marketing, finances, legal requirements, and all sorts of other areas. Make sure you can not only cope but thrive.
Every company that’s dreamed up a new product likes to think they’re making the impossible possible, but don’t forget to ask and answer that question: is it actually possible? This can be from a technology point of view – it’s possible that there simply isn’t the technology to deliver what you want to, which at the very least would drastically alter the size of your project – but also from a legal or restriction of jurisdiction point of view.
The way in which you talk about the idea is most likely not the way that's going to end up selling it. Test the language you use early on, before spending money on a fancy marketing campaign. You never know, you might be able to make a great deal of headway yourself.
Perhaps the biggest assumption to get to the bottom of is whether people actually want to buy your potential product, and if they do what sort of people are they. Many a product has been built on the assumption that it provides an desirable function or service only to find that nobody wants it. Or, if people do want it, that not enough people want it. However, tackling this assumption can be an extremely productive process, and the tests you execute to find out whether customers would want your product can actually be used to find out what sort of product you should build in the first place. In this way, not building your product can in fact be one of the best ways to build it.
It’s easy to see now how you could end up with hundreds of assumptions. When you consider that each challenge of an assumption can in turn reveal other assumptions, the numbers can become impossible to grasp. It’s therefore useful to grade your assumptions in terms of their criticality and to enjoy the focus that this brings. You don't have the time or money to test every single assumption, so find efficiency in testing the ones the can deliver the most impactful results for the least effort.
This grading is by no means gospel – by definition, we’re dealing with unknowns – but is in itself a useful process in terms of getting a feel of your business. You are, in essence, building an assumption map of your business, allowing you to see where your dangers are. If you looking for the most impact for the least effort, then a simple impact/effort matrix is a good place to start in grading your assumptions.
Those assumptions that are circled? They're the ones you should test first, and in turn should reveal other assumptions that are most likely high impact for your product idea/business. Another more thorough approach might be an innovation board, as below.
The idea of this innovation board is to move assumptions from left to right, those on the left being assumptions you have low confidence in and those on the right being those you have tested and know (as much as you can) as fact. The ones you should prioritise moving are those at the top of the board, those that are of greatest importance.
But how do you know what assumptions are most important? Or high impact? Or carry the greatest risk?
Broadly speaking (because different industries will be slightly different), the rankings of assumptions in terms of their important/impact/risk/etc runs as follows:
Desirability - do they want it?
Does you product idea deliver value that people might want? These are your most important tests, as there is, essentially, no point in carrying on if you find your assumptions here to be false. This is where your customers tests need to be deployed, as well as investigating acquisition channels (where, and how, your product reaches potential customers).
Feasibility - can you build it?
After determining whether people want your idea, the likely next most important set of assumptions will be those around feasibility. This is where an idea of a solution may have started to take shape (but don't you dare build it) and so you need to investigate whether building it would be possible. This is a broad definition of feasibility, encompassing not only whether the technology exists to roll out your solution but also whether you have the resources to do so and whether you have key partners in place to aid your solution delivery.
Viability - should you do it?
An important level of testing, but normally below desirability and feasibility. Should you do it? This is where issues of pricing, of profitability and revenue, come to the floor. Would the initiative be financially viable for your business? You also need to challenge any legal assumptions that you may have, as well as other viability issues such as geographical challenges. Companies with established reputations or clear cultures may also have to consider product-company fit.
Potential customer vs. Potential product
As they normally characterise the biggest business risks, I’d like to home in on investigating customer assumptions and highlight one particular slight tweak in the approach that should be remembered. It's understandable to think that you are looking to bring a product to potential customers - instead, you should be bringing customers to a potential product.
What does that mean? It means that when you are investigating customer assumptions, you should have made no concrete decisions about how it’s going to look, feel, what features it’s going to have, or even what its primary function will be – this is how not to build a product, remember? It is not the customer's job in these tests to approve your solution, or even to design your solution for you. There job is to give you their problems. A solution crafted for known and confirmed problems is likely to be viable - a solution crafted in absence of known or confirmed problems is not.
Think of finding the right product to build as being the same as finding treasure in a field, and think of your customer assumption testing as your equivalent of a metal detector. You’ve no idea what the treasure looks or feels like, nor do you even know if you’re looking in the right field. There’s no way of you finding that treasure by instinct or deduction alone – you can’t even use your experience of finding treasure in another field, as every field is different. You have to put yourself entirely in the hands of your metal detector, and you have to search every square inch of land in the field. To make matters worse, there are lots of tiny, useless bits of metal in the field that send your metal detector crazy – you either have to dig up every bit of metal to thoroughly check that it isn’t treasure (recommended), or you have to get good at listening for the right feedback signals.
Because if you’re thorough, and search every square inch, you’ll find the chunk of metal that’s the chunk of gold... if it’s there, that is. And if it is there, and you do find it, you’d better start digging because you’re unlikely to be the only one searching that field.
Don't build - question
By allowing the customers to lead the customer testing, and by encouraging them to explore their comments fully - always asking 'why' - you’re allowing them to tell you want they need, what they want, and what their problems are. You can find out what their hold-ups are, what their frustrations are, and what the hardest parts of their job are. By uncovering what hinders a customer and what they wish they didn’t have to do, you’re going an incredibly long way to finding out exactly where there’s a gap in their market, and so where they may be a gap in the market in general. Furthermore, by allowing a customer to lead, they can reveal what currently technologies they currently use and where the shortcomings are, given you further insight into any market gaps.
The overarching message when developing a product is to forget everything that you know or think you know, even the potential product itself. Once you’ve done that, you can begin the process of relearning through targeted assumption testing, a process in which you let the tests speak for themselves. The result should be a vastly expanded knowledge base about your company, your own customers, and your own market, a knowledge base that should, finally, leave you in a position to – at last – begin thinking about building your product.
If you wish to explore your venture further before building, then get in touch and we'd love to discuss how we can help.