Any time you have a new product idea everything is an unknown.
- Who is your target customer?
- Why will they like your product idea?
- What will the product do?
- Will the market buy the product?
- What will the product be competing against?
- How much will it cost the business to make and offer the product?
- How will the business make money and will it be enough to make a profit?
There can be hundreds more.
Some of these questions we may think we know the answers to, others you may have no clue about. It is possible and quite common to become overwhelmed by all the things that you don’t know. Fear of the unknown can cause an inertia that prevents action.
As early as possible we need to start trying to convert unknowns to assumptions and assumptions to reliable data points and facts to reduce the risk of product failure and to help develop confidence the idea.
UNKNOWNS TO ASSUMPTIONS
First make a list of the things that you need to understand to have confidence that your idea will be a success. As you create a list of the questions that you need to have answered, it is useful to convert these into an “assumption” that can be tested as being true or false. State the answer to each question as though it is a fact.
For example, from the question
“Who is your target customer?”
we could make an assumption that your target market is
“Product Managers with 0 to 3 years’ experience in the role in organisations with 100+ staff who have never been formally trained how to perform their role.”
“Owners of small businesses selling services products who need help to establish an on-line presence that allows their customers to book appointments”.
In many cases these assumptions are based on “Gut Feel” and experience and may be perfectly valid, however if they turn out not to be true there could be dire impacts for the success of the product and business. Initially there will be so many assumptions made that it can be difficult to decide which one to address first. We need a way to prioritise.
MOST DANGEROUS ASSUMPTION
The best way to prioritise this list is to identify the assumption that represents the biggest risk if you are wrong. This will be your “Most Dangerous Assumption”. Strangely this is often the assumption that many business founders or product managers are so confident is true that they don’t ever bother testing it.
Instead this is the assumption that needs to be investigated first.
It is important to recognise just how difficult this can be emotionally for the owner of the idea and the associated assumption because if it is not valid then the whole product idea may be flawed. Form a purely rational perspective identifying the flaw early is great and creates huge efficiencies however from a personal perspective, people don’t like being proven wrong, and the more senior or experienced they are the harder it becomes. Instead the “Most Dangerous Assumption” can go untested until the product is launched and then market will “test” the assumption anyway, except now all of the expense of developing, testing, releasing and supporting the product have also been incurred and if the assumption was invalid from the start, product failure is very expensive.
USING LEAN START UP APPROACHES
This lack of early assumption testing is often a symptom in Traditional Business Planning where all of the assumptions are captured up front, but they are treated as facts and are not robustly tested and validated (or invalidated).
By contrast Lean Start-up methods (as popularised by the book by Eric Ries) champion rapid, cheap and early testing of these assumptions to remove the business risk early and create multiple opportunities to change the product and businesses direction well before product launch.
Once you start testing your assumptions and reviewing the results you will learn an enormous amount of information about your market, but stay focussed. Capture new information but be sure you are gathering unbiased data for your test. If necessary pair up with another tester whose role it is to prove your assumption wrong.
As you go, WRITE EVERYTHING DOWN. The problem with lightweight methods is that often key information is not captured and is lost. The hardest part about this process is that sometimes you find out that your assumptions are wrong. Dead Wrong. Idea Killing Wrong.
In my opinion this is the number one reason why businesses fail to perform this validation activity. They don’t want to know that they are wrong, so they forge on with their idea with hope instead of confidence. The cost of finding out you are wrong after launch is hundreds of times more than this realisation at the earliest stages of product development.
The flipside of hope is confidence. It may take a number of false starts as you discover that your “Most Dangerous Assumption” were incorrect, but as you learn from the market you will start making better assumptions that can be validated as FACTS.
When developing a product that is supported by documented facts the whole business benefits from and increased confidence of success that is good for team morale and provides an infectious positive energy to launch with.