For the next couple of posts, I will discuss ways to approach early product design and testing within the startup context. Let me say up front that many of the practices and tools highlighted can be applied in multiple settings, from early ventures to large corporations across many product categories, and applied to B2C, B2B, and multi-sided markets. I will look at how product realization and innovation play out in these varied environments in future posts.
Customer Discovery: From Problem to Solution
I want to set the stage for these discussions by stating that I see product design and testing as part of early customer engagement activities. I encourage startup founders to view the design and testing of customer solutions as part of the customer discovery process starting as they first engage early target customers. The moment you connect with your target customers to validate early assumptions about their needs, you create the opportunity to establish longer-term relationships with these early contacts. If you structure your customer interviews properly, you can establish a rapport that allows you to stay connected. During this period, you continue to learn about the customers’ problems and hone in on some solution ideas. After establishing a good working understanding of the customer experience and their needs, you can go back to these early contacts for feedback on solution concepts and early working versions.
From problem validation to solution testing, these two phases of customer discovery provide early data points about how your target customers move from awareness to interest to early adopters to advocates. If you structure the process carefully and choose your first customer segments wisely, your should be able to make many of these first contacts as your first paying customers, leading to early traction.
In past posts, I have spoken about essential elements of early customer discovery and problem validation. Now let’s turn our attention to solution design and testing.
Solution Development & Testing
Solution development efforts provide vital opportunities to test the underlying assumptions of your business model. As an entrepreneur, you continually refine your business model through customer interviews, market research, and discussions with competitors, suppliers, and distributors. You will have many customer and marketplace discussions as you craft your business model’s “first cut.” Once you have early validation that you have a solution to a customer problem of great value, you can begin to think about the best way to design and build your product.
The main goal of early solution design activities is to provide a tangible and measurable way to test your business model assumptions with customers. This phase of customer engagement helps to clarify any misunderstandings you have about the problem, desired solution, and what they are willing to pay for in a finished product. Engaging the customer early in the design process enables them to visualize and hopefully experience the value of your proposed solution. By engaging with early designs, the customer co-creates the solution. This early customer involvement ensures that you build a solution that truly addresses the problem in a way that the market values.
Involving the customer early in the design process is consistent with the current lean startup philosophy. Early solution iterations allow you to quickly test key business model assumptions about the customer problem, solution, and expected value. More importantly, it establishes an environment where the customer co-creates the solution ensuring that the finished offering meets or exceeds marketplace expectations. This co-creation process has the added benefit of helping you to transition early participants to paying customers and brand advocates.
Minimum Viable Solutions
There is little debate that engaging the customer early in the design process is beneficial to the overall product development and launch process. Early customer involvement is a best practice for fledgling entrepreneurs and corporate product teams alike. However, as an entrepreneur, you will face many challenges in creating your product, including, but not limited to, lack of technical expertise or domain knowledge, time pressures, and funding constraints. With this in mind, you must plan your solution design steps carefully and execute them in small but focused incremental experiments.
Evolving from the lean product development movement, the Minimum Viable Product (MVP) or (as I like to label it Minimum Viable Solution (MVS) is considered an excellent approach to test your solution’s alignment with customer needs and expectations. The initial definition of this approach comes from Eric Reis, stating, “A Minimum Viable Product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
The MVP or MVS concept has evolved through practice. However, the significant tenets remain, especially the need to build a product version that focuses on a particular and limited part of a problem solution to validate the outcome with the customer. Early MVS versions do not have to be fully functional but designed to solicit customer feedback. Don’t strive for perfection, but ensure that the product version is “good enough” to illustrate core features required to solve the customer problem. I consider an essential criterion of an effective MVS is to provide some value to the customer. In order to provide value, it is vital for the customer to experience some portion of the solution and how it will impact their lives.
Once you receive feedback from potential customers, you can make small incremental changes as needed and solicit input on the next version. Early solution design must be iterative to be successful.
Early solution design follows the same experimental testing approach applied to validating all aspects of your business model. You start with assumptions on how the product solves the customer’s problem and creates value. Then, you test these assumptions through customer engagement, make adjustments and repeat the process. As part of the testing process, you should generate outcome measures or metrics that support business model validation. Validating metrics include post-use surveys, web statistics, or specific criteria associated with problem solutions, sometimes referred to as quantifying customer value. Measuring customer value may include how product use has created cost savings, time efficiencies, performance enhancements, or error reductions.
In my next post, I will focus on the steps and tools you can apply to make design decisions and test solution features benefits and outcomes.
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