April 28, 2020

3 Strategies Entrepreneurs Can Use to Test Their Product Ideas

If you’re a first-time entrepreneur, you are embarking on one of the most exciting journeys in the business world. Chances are that you’re feeling the same mix of fear and anticipation that every explorer feels before setting off into the unknown. If, at times, the fear outweighs the anticipation, rest assured that this is completely normal. Releasing your big idea into the marketplace means there’s a real chance the marketplace will spit it back out, or even just ignore it. That’s not a possibility anybody likes to dwell on, but facing that fear head-on is critical to your ultimate success.

Now, we’ve all heard the same platitudes about facing your fear of failure: You miss all the shots you don’t take. If at first you don’t succeed, try try again. The only true failure is never to have tried. And there is truth in all of them. But we prefer the words of one of history’s greatest inventors, Thomas Edison: “I have not failed. I’ve just found 10,000 ways that won’t work.” You see, accepting the possibility of failure in business is not about having courage, though we suppose that can only help. Rather, you must come to see failure as critical to your success, as something you literally cannot succeed without. As both a scientist and a businessman, Edison is a great example of the “experimental mindset,” which sees failures not as defeats but as vital data. Think of the word “experiment” in its scientific sense, as an attempt to disprove a theory rather than to prove it.

And yes, that’s easier said than done. It probably does take a bit of courage, in the end. And we’re not saying that successful entrepreneurs simply leap headlong into the marketplace with no preparation, heedless of the costs in time or capital, throwing good money after bad until something finally sticks. Unlike Edison, most people don’t have the resources to discover 10,000 ideas that won’t work. Instead, a properly experimental entrepreneurial mindset will involve at least three critical strategies for leveraging failure:

  • Finding the cheapest ways to fail early in the venture
  • Taking advantage of early failures by systematically gathering valuable data about customer’s felt needs
  • Exercising good design discipline to remain problem-focused

Test Your Product Idea by Failing Cheaply and Early

A common trap for first-time entrepreneurs is the false imperative to build something that can’t fail. “I’ve only got one shot at this,” they think. “Failure is not an option.” The problem is that they are assuming they know what it takes to prevent failure. The reality is that no one can know for sure what the market wants without testing concrete ideas with real customers. Instead of spending big money on design and development from the get-go, you need to find the cheapest ways to fail.

In practice, this means finding the least expensive way to get your idea in front of potential customers in a form that they can respond to with meaningful feedback. Focus on the core features that you think will be most useful to them, keeping in mind that this is exactly what you’re trying to discover. Here are some examples of cheap but useful failures, presented in increasing order of cost and complexity:

  • Pictures on paper, whether they’re pencil sketches, wireframes, or doodles on the back of a napkin
  • “Storyboards” made of images or screenshots
  • “Click-throughs”: user interfaces that navigate between visuals without functionality built-in
  • Prototypes with the application itself used as click-through, but scaffolded for basic experience only

That list should tell you a lot about how we’re using the word “failure.” All of these tools are opportunities to discover that your product is not ready for the marketplace as it’s currently configured. But they’re also drastically less costly in terms of time and money than a more or less fully-developed product, which wouldn’t give you nearly enough data about your customer’s real needs to justify all that overhead. Don’t over-estimate what your customers need in order to give you useful feedback. Remember that they’re the ones dealing every day with the problems you’re trying to solve. They very well may know more about the kind of product they need than you do–in fact, they almost certainly will.

Gather Data About Customers’ Real Needs

Once you’ve developed a cost-effective way to present your core features, waste no time in getting it in the hands of potential customers. Talk them through the basics they need to know to understand your vision for the product, but then spend most of your time listening to them describe the real problems they’re trying to solve in their everyday business. Remember that nothing is precious–they may look at your favorite idea and say, “Nah, that’s not something we need here.” This would rightly feel like a massive setback if you’d already sunk lots of your start-up capital into a high-functioning demo, but if you’ve started with a sketch, you can just cross it out and redraw what they really want.

It’s important to be very systematic at this stage. Make a spreadsheet of proposed features and functions, adding rows for new ideas that you glean from meetings with customers. Add new columns for each target customer until you start to see trends in what they’re asking for and what they’re ignoring. Of course, you’ll have to start with several rows of ideas based on your assumptions, but that’s true of any start-up. The mark of a savvy entrepreneur is their determination to validate their assumptions through real interactions with customers. Or perhaps, remembering the skeptical disposition of good scientists, you are almost as determined to prove your assumptions false as you are to validate them.

One more thought about this phase: in addition to gathering invaluable data for your product development phase, you might just be creating your first customer relationships. They’re now invested in seeing you succeed, not least because they’re helping develop a product that is being customized to their felt needs. Remember how many incumbent products are vying for their attention, many of which are committed to platforms that really are “too big to fail.” Your ability to fail cheaply, early, and productively is your greatest advantage in the competition for their business.

Remain Problem-Focused for the Entire Product Life Cycle

This is something we talk about a lot in this space, but it’s worth repeating in this context: your determination to discover shortcomings in your own product, especially relative to customers’ evolving needs, doesn’t stop once you’ve developed a product and signed up your first clients. Staying tuned in to customer feedback can help you keep the focus on the features they really use. We’ve all seen kitchen-sink platforms that prioritize doing everything over doing a few things very well. This is where your systematic catalog of early failures can continue to pay dividends, although you may outgrow your original spreadsheet. If you haven’t kept close track of the problems your customers are experiencing–including the problems they’re having with your product–your upgrades will lose the urgency and simplicity that made your 1.0 such a success. Cheap failure will always be a tool for identifying faulty and missed assumptions that lead to bloated, inefficient platforms.

In the same way that entrepreneurs can develop cooperative relationships with target customers, creating safe spaces for cheap failures, established firms can cultivate these relationships with “beta customers.” These existing clients become your “street team,” your “insiders,” your “early adopters”: a trusted group of end users who are excited to provide feedback about ideas and changes. Even a corporate giant like McDonald’s was compelled to invent the “franchise prototype” to test new ideas on a single franchise before pushing out changes to the rest, lowering the stakes of “failures” in order to make them opportunities for growth. Perhaps counter-intuitively, the more dependent customers become on your product, the more essential it becomes to engage them in these experiments.

We should add that it’s not just first-time entrepreneurs who experience the fear of failure. Maybe you’re a discouraged entrepreneur who has spent time and money on a product prototype, only to discover that you misjudged the market demand. It’s all too easy to take this “failure” personally or to feel like you threw away your shot. But what if you don’t need a new infusion of capital to jolt your start-up back to life? What if you can afford to “fail” a dozen more times by doing it on the back of a napkin? You may be pleasantly surprised how your interactions with target customers change when, instead of trying to shoehorn their needs into a product that already exists, you’re letting them in on the ground floor as co-developers. And perhaps you’ll even feel some relief as the stakes of those interactions are lowered because you are free to fail until you find the right answer.

Wherever you are in your journey, remember these keys to successful failure: fail cheaply, early and often, gather data from your failures voraciously and systematically, and never stop failing constantly and purposefully in your pursuit of products that meet your customers’ needs.

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