The short answer? Yes, writes The Lean Startup author Eric Ries.
1: Asking potential customers what they want doesn’t work because many times, customers don’t know what they want.
A much better strategy, Eric suggests, is to build a simple product, a “minimum viable product” or MVP, and then watch what actual customers actually do. “The minimum viable product lacks many features that may prove essential later on,” Eric writes. The key is getting “in front of potential customers to gauge their reactions.”
The MVP concept is not limited to startup ventures. It applies whenever we want to try something new. Early in her career, Caroline Barlerin was a director in the global social innovation division at Hewlett-Packard. She was charged with getting more HP associates to take advantage of the company’s policy on volunteering.
The traditional approach would be to survey people and ask what types of programs they were interested in. “We could survey them to get their opinion,” Eric writes, “but that would not be very accurate because most people have a hard time assessing their feelings objectively.”
Caroline didn’t send out a survey. She didn’t conduct market research. Instead, she did an experiment.
The idea is radically simple: when team members “voluntarily invest their time and attention in this program, that is a strong indicator that they find it valuable.”
“Unlike in a focus group, her goal would be to measure what the customers actually did,” Eric observes.
Caroline identified an opportunity for a small number of employees to volunteer. “In this case,” Eric writes, “a simple experiment would involve taking a very small number—a dozen, perhaps—of existing long-term employees and provide an exceptional volunteer opportunity for them.”
One key is to focus on what Eric calls “early adopters,” the customers who feel the need for the product most acutely. “Those customers tend to be more forgiving of mistakes and are especially eager to give feedback,” he suggests.
Next, she measured what they did: “How many of the first volunteers actually complete their volunteer assignments? How many volunteer for a second time? How may are willing to recruit a colleague to participate in a subsequent volunteer activity?”
2: Yesterday, we looked at the two indicators that demonstrated Facebook was going to be a success: the “value hypothesis” and the “growth hypothesis.” The same idea applies here as well. “The value hypothesis tests whether a product or service really delivers value to customers once they are using it,” Eric writes. When HP associates volunteer for a specific volunteer activity, that tells us they see value in it.
The growth hypothesis looks at how the program will spread among HP associates, from the initial early adopters to mass interest throughout the organization. “A likely way this program could expand is through viral growth,” Eric notes. “If that is true, the most important thing to measure is behavior: would the early participants actively spread the word to other employees?”
We ask: Out of the first ten HP team members to complete the first experiment, how many volunteer again? How many are willing to recruit a colleague?
Because these are early adopters, we expect to see good results. “Put another way,” Eric writes, “what if all ten early adopters decline to volunteer again? That would be a highly significant—and very negative—result. If the numbers from such early experiments don’t look promising, there is clearly a problem with the strategy.”
Do we give up because the initial results are weak? Of course not. “It means it’s time to get some immediate qualitative feedback about how to improve the program,” Eric writes.
3: Here is another area where experimentation beats traditional market research: “We don’t have to commission a survey or find new people to interview. We already have a cohort of people to talk to as well as knowledge about their actual behavior.”
Another benefit? This entire experiment can be completed in several weeks, a fraction of the time for a traditional strategic planning process.
More tomorrow!
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Reflection: What is a new project or initiative I want to get started? Is there an opportunity to utilize the minimal viable product concept?
Action: Do it.
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