Hack:
Pretotype It! Make sure you’re building the right “it” before you build it right.

Hi Joachim, and thanks. I like Kickstarter as an open marketplace for funding innovation, and I do think it can be a valid pretotyping platform, given that it can expose ideas to many potential users/buyers, rapidly and cheaply. I have three minor concerns:

1) Kickstarter is clearly optimized for consumer ideas; testing B2B ideas this way would be harder.
2) It is aimed at Investors rather than customers: Kickstarter pitches ask the question "Do you want to invest in this?". Of course this question has some overlap with "Do you want this?" but only in the cases where I pledge to invest because I consider myself a likely buyer too. It would be important to design the Kickstarter pitch to avoid any bias here.
3)) It reveals the Inventors' idea (the final "it"), in full. Most clients I've worked with are shy about their IP at early stages! In this case, the fix might be to disguise the brand making the pitch, and the team may feel that the advantages of rapid learning may offset the cost of tipping off the competition.

So I'd advocate using Kickstarter or similar crowdfunding platforms at a later stage of testing, when more of the attributes and features of the final "it" have been validated by simpler pretotypes.

Thanks for the comment,
Jeremy

Great question, Shaun. I agree that Investors within established firms are at least as averse to risking damage to the brand with a public failure, as they are to "wasting" resources in the attempt. Corporate Investors don't seem as concerned with the risk of slow erosion of that brand value if the firm fails to innovate.

First, firms can avoid risking brand damage entirely by beginning with the friendliest audiences: employees (think Google's "dogfooding" technique) and alpha- or lead-customers. The second strategy is to only expose a small - but representative - fraction of the target customer base to the pretotype by carefully targeting the test e.g., by limiting geographic exposure. In most cases a good test result can be provided by the reactions of a few dozen customers.

In the B2C environment the third risk mitigation strategy is to decouple the brand from the pretotype test altogether. An established brand stands for a set of attributes in consumers' minds, but from the Inventor's POV, those assets are liabilities. Given that the brand calls to mind core offers that probably differ significantly from that under test, brand perceptions may well skew consumers' reaction to the pretotype offer. So in this case I advocate for either muting or disguising the brand (and/or parent company identity) in presenting the pretotype offer, if to do so could cause confusion and potentially produce unreliable data (which is the exact bias that focus groups introduce). Remember, Inventors initially need a neutral test of offer desirability, untainted by consumers' view of the parent brand.

It's different in the B2B environment, where the brand risk is magnified because most B2B firms have a relatively small number of deep customer relationships, to jeopardize any one of which could be disastrous. In the B2B world, many new offers have clear benefits but come with significant switching costs such as new production methods or equipment. The virtue of a pretotype is to shine early light on the tradeoffs between benefits and costs a customer would face. In this case, the smart way to manage risk is to sacrifice a little of the surprise value of pretotype offers. The firm can discuss with one or more customers and agree in advance to a pretotyping relationship: the supplier firm declares that it will expose very early-stage offers to the customer, in exchange for confidentiality and a measure of tolerance that the offers so exposed will be conceptual in nature i.e., not ready for prime time. The customer and supplier can then explore the cost-benefit tradeoff openly. In this case, some of the pretotyping techniques become redundant (e.g., the Fake Door).

To your point about how startups get funded, the real power of pretotyping is the mindset that Inventors can be more disciplined about their march towards the final solution desired by the market. When startups do this it's called "pivoting" the product, and it usually happens only after earlier product versions are overdeveloped relative to valid market feedback. Pretotyping provides a framework in which the need to pivot can be discovered - and new pivots tested - in a rapid, systematic way. I think VCs ought to demand this kind of discipline from their portfolio companies, with a view to improving their ROI.

Thanks again for your comment.

Thanks for your question, Heminda. The simple answer is, pretotyping for services is very easy, although typically a subset of the pretotype modes I describe above is most applicable. The most appropriate pretotypes are the Fake Door (asserting that an offer actually exists), Mechanical Turk (humans mimic complex technology), and One-Night Stand (pop-up version of full service).

Some examples should help illustrate. I recently worked with a group from a large bank who used all of these techniques to experiment with new B2C and B2B service offerings, as follows:

- One team designed a Fake Door test for a new service offering trade advice to the bank's business customers. The test took the form of an invitation posted on the "closeout screen" of the web platform already used by their target customers. The number clicking through to express interest represented the ILI measure.
- Another team designed a Mechanical Turk solution to test whether customers would value an app that would let them know in real time what the lines were like in their local branch before setting out. A toll-free phone line and dedicated staff member reporting estimated wait times was enough to test ILI for the app.
- A third team designed a One-Night Stand to test whether bundled retail financial services (aka a one-stop-shop) was more desirable to the bank's senior customers (than offering each service à la carte). The idea was to invite target customers who already had accounts with the bank to a financial services fair, at which bank representatives would offer free advice on individual products or services (e.g., investing, insurance, managing accounts online, etc); there would also be a booth at which the customers could discuss the integration of all aspects of money management. Entrance to the fair was free, but each customer's time slot was limited, forcing customers to choose whether to spend their slot at the bundled services booth or with one or more individual specialists.

I hope these examples give a flavor of what is possible without needing to overbuild a service offering ahead of demand validation. An important aspect of each one of these tests is limited scale: a few branches, one or two financial services events, messages out to a few hundred customers...

Thanks again for your question.