Lean Product Development
By the end of this week you should understand:
The role assumptions about customer behaviour play in product design
What a minimum viable product is and how it can facilitate product design
Product design as an iterative process
You’ve spent hours interviewing customers about their problems. You have an idea for a solution that you think will solve at least some of these problems in a meaningful way. You have done the modelling to convince yourself that solving this problem represents a massive opportunity for both impact and financial return. You can’t wait to start delivering your product! However, you still aren’t sure what this product should look like. What features should the first version include? What will customers actually value? Given limited time and resources, how do you balance between taking the time to develop a good product and pushing your solution out to the market?
Product design is hard, and for every ‘rule’ of product design you can find an example of someone breaking it and still succeeding. As lean entrepreneurs, we will approach product design the same way we have approached other aspects of growing our business. We will try to maximize the effectiveness of the time and money we spend developing our product by soliciting customer feedback as early as possible in our product design.
Lean Approach: Validate Your Core Assumptions Before Developing A Product
When you feel like you have identified a solution to a big problem, it can be very tempting to rush towards building the solution in the way your intuition tells you to develop it. It is very easy to convince yourself that the solution that you are envisioning perfectly addresses your customers’ needs and will inevitably succeed. This is a very dangerous way of thinking. Whether you realize or not, a host of untested assumptions about how your customers will interact with your product are guiding your intuition. Some of these assumptions are super important, and if they are wrong then you are bound to fail.
You could validate these assumptions by spending all your time and money developing a fully realized product and pushing it out to the market. If no one buys your product and your business goes bankrupt, then you got at least a few wrong. This is a pretty costly way to run an experiment. A better way would be to validate these assumptions prior to developing your product. If some core assumptions are wrong, you still have the time and resources to change your design before going to market. If you can show that all your core assumptions are validated, you will be able to make a much stronger case for your chances of success. This will make your start-up even more attractive to investors, partners, and employees. It’s a win-win!
Exercise: core assumptions guiding your product design
Developing a Minimum Viable Product
One of the key tools in product design is the minimum viable product (MVP). The MVP is the most basic form of your product that will allow you to get good customer feedback. The author of the Lean Startup Methodology defines it as:
“Minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
The goal is to validate your assumptions as quickly and for as little effort as possible. The exact form of the MVP will depend on the nature of the product you are designing and the assumptions you need to test.
Let’s consider some examples to develop our intuition…
Imagine you have developed a novel method to grow crops in a drought-stricken region. It involves special agricultural practices, some special soil additives, and it produces a unique species of corn. In this example, let’s assume that you are still figuring out what these additives are and that this will take you a lot of time and money to figure out. A minimum viable product for this could be as simple as asking some interested farmers to try out your special farming techniques, to use a powder that looks similar to what your additives will be, and for you to show the farmers the corn that will be produced. Even though you are not finished the product development, the farmers will still be able to tell you how feasible it will be for them follow the process you have developed. They will be able to inspect the final product and tell you if they think they will be able to sell it. If they won’t be able to adopt your practices or sell your product, then there is no point in you developing your special additives.
Another example would be an app-based marketplace for artisan producers of goods and produce. To fully build out this marketplace, you will need to sign up a lot of producers and a lot of customers to make it useful for each. You will also have to do a lot of hard work to make payments made through your platform secure. Before you do all of this, however, you could develop a non-functional version of your app that shows all of the features you intend to include. You could show this app to the producers and consumers and learn about how they will use it and if they will consider it valuable.
Your minimum viable product will be unique to you. It can also evolve over time – as you move along your product development, you can make a more and more functional prototype. However, you should aim to have your first MVP done as soon as possible to ensure that your product development is being guided by validated assumptions.
Exercise 2: Build a Minimum Viable Product (MVP)
Testing Your MVP With Customers
With your MVP developed and your core assumptions identified, you can now identify ways you can work with your customers to validate your assumptions. It is important to recognize that people cannot always be trusted to report what actually drives their behaviour and what product design decisions will cause them to purchase or not purchase a product. A great recent example is the headphone jack. When Apple first removed the headphone jack, this was widely condemned as a major inconvenience that would cause people to buy different phones. This turned out to not be the case – people did not actually value the headphone jack as much as they indicated, and now every major phone manufacturer is removing it from their design.
To validate your assumptions, you will need to design some experiments that you can conduct with your customers. How you design these experiments will depend on what you are looking to validate and how measurable it is. It may be as simple as presenting different customer designs to customers and asking which they prefer. If you have access to large user bases that you can easily track, you can be a lot more systematic. For example, to test the effectiveness of a marketing message you could run two different Google advertising campaigns in which one campaign includes the message and the other does not. You could then measure conversion rates on the advertisement to have a quantitative measurement of its effectiveness.
Exercise 3: working with customers to validate your mVP
Dive Deeper Resources
Minimum Viable Product presentation with Eric Ries - https://leanstartup.co/what-is-an-mvp/
Archived Lean Product Design Tutorial published by the US Government - https://github.com/18F/lean-product-design/tree/18f-pages/pages
Making customer feedback actionable - https://www.intercom.com/blog/how-to-analyze-customer-feedback-and-make-it-actionable/
Introduction to the Social Lean Canvas - http://whare-aki.org/blog/resource/intro-to-lean-canvases/
The top reason startups fail - https://www.forbes.com/sites/niallmccarthy/2017/11/03/the-top-reasons-startups-fail-infographic/#566d8eff4b0d