You sometimes get it right the first try, but more often than not, you only get it right on your third, fourth or fifth attempt. This poses a challenge to a lot of businesses since they just don’t have the resources to go through all these different iterations, leading to the business’ failure before being able to get to a successful product.

Eric Ries in The Lean Startup suggests a different approach to address that problem. Instead of diving all in, developing a finished product and then trying to sell it, he suggests that the goal should be to get a basic version of the product to market as soon as possible in order to have the market actually tell you whether there is sufficient interest in the product to justify the remaining development costs. He gives the example of a shopping product recommendation service algorithm company. Instead of building the algorithm and the back-end before going to market, they had real people do the recommendation process (all the while giving the impression that this was being done by the algorithm.) This allowed this business to go to market quickly and actually validate whether there was a real interest for the service and to tweak that offering to exactly what its customers wanted. This made that business much more agile and facilitated pivots as the business was not committed early on to the wrong product or to a product which people didn’t actually want.

This approach promotes real-world testing over hypothetical market research and analysis. In addition, by determining where the real market interest lies, you now have a much more attractive pitch if you need to raise money to fund your venture. Essentially, you are exchanging hypotheses for market-tested results.

Pre-sales

Another way to approach this same issue is to pre-sell your products with the caveat that you actually haven’t fully developed it yet. Similar to KickStarter, you are selling a product before it is actually available. If lots of people buy it, then you know that it is worthwhile to go ahead and make the product. You can even add the possibility for people to buy add-ons to see what additional features people will actually pay for. On the other hand, if you have minimal sales, you can abandon the project or make important changes and this, without having invested large amounts of time and money beforehand. In this latter case, just refund your customers and move on.

If you are not comfortable with actually selling a product that you don’t have yet, you can create a sign-up link where people can put in their email address to be kept up-to-date about the product’s development. This is not as good as doing actual pre-sales, but it should give you some indication of the level of interest for your product offering. Alternatively, you can have ask these people to give a deposit of a couple dollars to reserve some pre-sale price. By forcing people to actually open up their wallets, you will get a better read of the market interest for your product.

Minimum Viable Products

For projects which require significant research and development, your goal should be to rush towards the most basic product which can do what you want even if you are substituting human labour for tasks which can be programmed. Once again, you are trying to see if there is actual market interest for your product before investing the resources in its development.

Once you have this minimum viable product in the marketplace, try to get in touch with your customers to get their feedback and feature requests. This gives you high-quality market research as actual customers are telling you what they think should guide your product’s development. Often times, these customers will reveal that they like your product for completely different reasons than you envisioned. Such feedback is really gold.

The concept of a minimum viable product can also apply to the services sector. For example, for my tutoring business, I was exploring the idea of offering crash courses. I initially planned on renting a classroom to give the course, but then asked myself, how can I simplify the product offering to test market interest beforehand? I opted instead to go for giving the crash course by videoconference which drastically reduced the set-up expenses and the time needed to organize it. It also gave me an out if there was a very limited interest as I could simply refund the registration fee without having lost additional money on the classroom rental. In fact, the crash course did garner some interest and, interestingly, the students actually preferred the videoconference format. Afterwards, one of the participants requested that I give another crash course on a different topic.

Not knowing if there was sufficient interest for this second crash course, I asked the requesting student to get me a list of 10 people (name and email address) who were ready to register for that new crash course. She got me this list in a matter of days, so I then put the crash course together. Little surprise, this second crash course was also successful and I went into its development knowing that it was answering a real market need.

Putting this all together, we see that the goal is to try to limit your business’ research and development to products or services for which there is actual market interest. Then, the focus should be on trying to speak to your customers to tweak the product offerings to better meet their needs. Give it a shot and see how this approach can help your business!