Original article published in the FT
Most of us have built prototypes to communicate and validate our ideas. Even a simple sketch or mock-up of an advertisement can help solicit high-quality feedback from potential customers. And any part of your start-up can be prototyped – even the final pre-launch press release.
Although most of us prototype in some way, too often we avoid taking our prototypes out into the big wide world. We have all been trained to perfect our offer before going public, perhaps through a fear that we’ll be copied, we’ll lose the option to patent or because we’re embarrassed to launch without all questions answered.The power of social media and television programmes such as Dragons’ Den may have even increased our fear of public humiliation from failure in business.
But there is an alternative: instead of soliciting feedback from customers in focus groups, which we all know never really mimic real life, why not try placing the prototype in its real context?
Walter Faulstroh did just this. When co-launching V Water, a soft drink that was subsequently acquired byPepsi, he took a prototype of the product and placed it on supermarket shelves without asking for permission from the retailer.
After watching if passing shoppers ignored or picked it up, he would ask them why. The in-market feedback was faster and higher quality because the context was real.
Social media are making it even easier to release prototypes to a wide number of users. Zynga, the social gaming developer, goes public even before it has written a line of code. It prioritises new game concepts by creating a five-word pitch for each and advertising it on a high-traffic website of relevant users. If the pitch is clicked on, the user is diverted to a survey that harvests e-mails and additional information. Zynga then compares interest for each pitch and prioritises accordingly. The company calls this approach “ghetto testing” and it guarantees an excited market before launch, lowering the chance of most entrepreneurs’ greatest fear: market rejection.
An ex-colleague of mine, Scott Wilson, has had astonishing success using a similar approach. He had a hypothesis that the iPod nano would make a great wristwatch but didn’t know whether enough potential customers would share this belief. To test market appetite, he placed a short video describing his idea on Kickstarter, a crowdfunding website, and asked people to make commitments to purchase ranging from $1 to $500. Scott’s goal was to raise $15,000 within 30 days but he actually raised almost $1m, shattering all Kickstarter records and instantly validating his designs – all without giving up a single per cent of equity. Scott now runs LunaTik, a successful company based on the watch, but had he been too scared to go public with his idea, it may never have seen the light of day.
A similar process can be employed by big companies, too. Amazon’s innovation approach, which it calls “working backwards”, has hinged on prototyping since its early days as a start-up. Its product managers begin any project by writing an internal press release announcing the finished product, forcing themselves to be concise about the benefit.
Technology company Intuit went a step further. It had the courage to release unfinished prototypes to market. When it wanted to create a text message marketplace to help Indian farmers reduce waste produce, it sought real feedback from them. Instead of spending months building the complex technology behind the trading platform, the company launched a prototype direct to farmers in just seven weeks. In place of the back-end technology, however, the trades were fulfilled by the project team themselves.
By launching the fake site and finding that the farmers embraced the project, Intuit confirmed that its product fulfilled a need and, when it began coding the complete platform, it was able to incorporate the feedback it received from its customers.
For a start-up, launching a prototype of all or part of an offer can yield a real competitive advantage by shortening the time to receiving quality feedback. This is likely to become the norm given the new tools that technology provides us with and because markets are more dynamic and unpredictable than in the past.
Any start-up consists of a string of unanswered questions and an entrepreneur’s job is, in part, to prioritise answering them with limited resources. Launching prototypes to the world is an important tool for choosing how to answer these pressing questions.
So, what are your unanswered questions? And in what order do you plan to answer them?
Don’t be afraid to launch a prototype and you may be able to answer them faster and more accurately than you think.