The Right It

by Alberto Savoia

  You might wonder if this is a case of pretotyping giving a false positive—just like those focus groups and other Thoughtland techniques I criticized. After all, initial interest was high, and many people were willing to pay $1,500 for Glass. Quite the contrary. Google Glass is a great example of how, for some products, initial levels of interest and commitment are necessary, but not sufficient to determine if a product is The Right It. The success of some products and services depends on repeated use and continued engagement.

  It’s relatively easy, especially for companies like Google and Apple, to create a lot of buzz for a new idea. The real test is whether that initial buzz translates into ongoing interest and consistent usage. By combining the YouTube pretotype with the Explorer program, Google not only determined the initial level of interest in the product, but was also able to track how many of those initially enthusiastic Explorers remained enthusiastic after the initial excitement wore off.

  Of course, the Google Glass team was disappointed, but they had never assumed success. If that were the case, they would have jumped ahead to manufacturing and tried to sell hundreds of thousands of units instead of validating the idea first.

  Because in the movies anything is possible, the YouTube technique can be used to pretotype any idea. But remember that metrics like views or thumbs-ups don’t count as data. The key is to combine a video that shows your idea in action with a way to collect skin in the game.

  The YouTube pretotype can often be combined with another pretotyping technique for even better results. Let me illustrate the power of this approach using some of my previous examples.

  Example: The Smart Horn Revisited

  A few pages earlier, we used the Pinocchio technique to pretotype the Smart Horn idea. We installed four dummy buttons for four different horn sounds in our car to see if, when, and how often we would use them. We can combine the Pinocchio with the YouTube pretotype by making a video that shows the various buttons and sounds in action. We begin by recording a video of someone driving around in a Smart Horn–equipped car, showing how it would be used in various situations. A driver distracted by being on the phone does not notice the light has turned green and is given a polite beep-beep. Someone cuts our driver off and hears a more assertive “You #$%^&*!”

  Of course, no Smart Horn exists yet, so those buttons don’t do anything, but that’s where the magic of video comes in. With a little editing, you can add the appropriate horn sounds to the video soundtrack and create the illusion that the Smart Horn actually works. Once you have such a video, you can post it online and give people who watch it an opportunity to preorder it or give you their email to receive more information about it.

  Example: The Portable Pollution Sensor Revisited

  In addition to showing the product-to-be in action, the YouTube pretotype gives you a wonderful opportunity for testing various stories or scenarios for marketing your idea. Remember the portable pollution-sensor idea we introduced in a previous chapter? The team believed that their first target market should be parents of children who live in very polluted cities. To validate their market hypothesis, they can make a video that tells a story of how two concerned parents used the portable pollution monitor to keep their daughter healthy by not letting her spend too much time outside when pollution levels are too high. For pretotyping purposes, the pollution-sensor device shown in the video can be simulated by any nonfunctional object whose shape and dimensions are similar to the ones they are envisioning for the actual product.

  Example: FeeBird

  One product category that is ideally suited for the YouTube pretotype is software. By turning a PowerPoint (or Apple Keynote) presentation into a video, you can simulate the functionality of any program or app you can envision without writing a single line of code. Let me give you an example.

  Let’s say you have an idea for a mobile app called FeeBird. Your app makes it possible for bird-watchers (let’s give squirrels a break for now) to earn money from their hobby by sharing the location of rare or elusive birds that they’ve spotted—for a fee. As the developer of FeeBird, you will make money by selling the app for $5 and by collecting 20% of each transaction.

  If you are a software developer, like me, you can’t wait to fire up your computer and start coding. But let me ask you this: “Do you have any doubt that you can build such an app?” Of course not! It’s just a SMOP (Small Matter of Programming). And even if you are not a software developer, you can safely assume that you can easily hire one to develop FeeBird for you. In other words, there is zero risk or uncertainty about building the app. There is, however, a nonzero cost associated with it. An app like this would take at least several weeks of work to develop, test, and debug. Since we know that most apps don’t get many users or make much money, you should use pretotyping to make sure that FeeBird is The Right It before you make that investment.

  So instead of running to your computer and firing up your software development tools, fire up your favorite presentation or graphics software and use its capabilities to simulate what your app would do. Let me show you what I mean.

  Below are mock-ups of two FeeBird screens I put together on Apple Keynote in about ten minutes. The first screen shows the general location of an interesting bird near you, along with an option to buy a precise map/location for a fee of $5:

  The second screen shows what happens if users decide to buy the detailed information: they get a detailed map, GPS coordinates, and a chance to rate the information.

  In less than one hour, you can create several such slides, each with a mock-up screen showing the result of a user action (search for bird, report a bird, confirm a sighting). You can then combine them in an animated sequence to make them look like a functioning app. For example, when you click on the slide with the “Buy” button, the screen transitions to the next slide, which shows the detailed information on the bird location—and it would look to the viewer as if the click on the “Buy” button worked. Once you have put together an animated sequence, add some narration to complete the demo:

  After you’ve told FeeBird what kind of birds you are interested in, the Alert Screen will let you know whenever such a bird is spotted near you.

  Here, for example, you can see that there’s an Atlantic Puffin within a ten-mile radius of your current location. For $5 you can get the precise location of the bird.

  You click on the “Buy” button and now you see a screen with detailed map, GPS coordinates, and directions.

  You drive to the location, hike a few hundred feet, and . . . success, there’s a pair of Atlantic Puffins. Delighted, you give a five-star rating to your fellow bird-watcher.”

  At the end of this process, not only will you have a compelling and realistic-looking video demonstration of what your app will do, but you will have probably learned a lot about how you would design it and what features you would put into it.

  But this is not a pretotype yet; it’s just a sophisticated, dynamic mock-up. To turn it into a pretotype you have to use this video to collect some data. You can do that in any number of ways. For example, you can create a dedicated website where you show the video and give people an opportunity to sign up to be notified when the app is released, or show the video at a bird-watching meeting and see if anyone is interested enough to give you some form of skin in the game (email address, money, etc.).

  Return on Pretotyping Investment

  This last example gives me an opportunity to introduce the concept of return on pretotyping investment: how a few dollars and hours invested in pretotyping an idea can save you from wasting a ton of money and time building The Wrong It.

  Let’s assume that you’ve invested ten hours and $100 to create a polished YouTube pretotype of the FeeBird app in action, develop a simple website, and buy some online ads in order to collect some YODA. After one week, your video has collected two thousand views, a bunch of hostile comments (e.g., “No self-respecting bird-watcher would charge or pay money for this kind of information”)
, and—most important—not a single piece of skin in the game. You make some changes, run another ad campaign, and get similar results. You decide to try another tack, so you show your video at a meeting of bird-watchers—and you are booed off the stage. Ouch! Time to go back to the drawing board.

  This outcome may be disappointing. But imagine how much more disappointed you would have been if, instead of ten hours, you had invested ten weeks (roughly four hundred hours of engineering time worth thousands of dollars) to develop a real app, only to find out exactly the same information about your market (i.e., zero sales and that most bird-watchers recoil at the premise of buying or selling such information). Ten hours and $100 versus four hundred hours and thousands of dollars to learn the same lesson—that’s a darn good return on your pretotyping investment, wouldn’t you say?

  Test a little before you invest a lot. Don’t jump in bed with an idea until you’ve gotten to know it a bit better. And speaking of jumping in bed, let’s move on to the next pretotyping technique.

  The One-Night Stand Pretotype

  I named the One-Night Stand pretotype after the performing-art practice of holding a single performance of a play or show at a particular place—but go ahead and associate it with the more salacious use of the term if you prefer.

  As the name suggests, the main characteristic of the One-Night Stand pretotype is the lack of a long-term commitment or investment. It does not necessarily have to be exactly one night or one shot, by the way; don’t take the name too literally. The duration of the pretotype experiment can be as brief as a couple of hours or as long as a couple of months; the point is that it’s a relatively short-term commitment—just the time you need to collect enough data to make an informed decision. If you want 100 data points and you can get them in one day or with a single experiment, then make it one day and one experiment. If it will take you a week and multiple experiments to get the necessary data, take a week. Having said that, two of my favorite examples of One-Night Stand pretotypes in action come from Virgin Airlines and Airbnb, both of which began with a one-shot/one-night offer.

  Example: Virgin Airlines

  In the early 1980s, legendary entrepreneur Richard Branson had booked a flight to the British Virgin Islands to meet his then girlfriend for a romantic vacation. When his flight was canceled, instead of moaning, groaning, and cursing the airline—as most of us would have done—he decided to create his own One-Night Stand Airline. He borrowed a blackboard, wrote on it “Virgin Airlines / $39 one-way ticket to BVI,” rounded up a bunch of the other passengers who had been bumped, and sold enough tickets to fill a chartered plane.

  Encouraged by this successful experiment, he returned from his romantic vacation and decided to call Boeing: “Do you have any used 747s for sale?” They did. Branson grabbed one and stepped up from a one-flight pretotype to a one-plane airline pretotype. Eventually, Virgin Airlines went on to become one of the most successful and innovative airlines in the industry. Branson’s girlfriend must have also been quite impressed because she ended up marrying him.

  Example: Airbnb

  Sometime in 2007, two Airbnb cofounders, Joe Gebbia and Brian Chesky, could not pay the monthly rent for their San Francisco residence. To make some quick cash, they came up with the idea of renting out three air mattresses in one of their apartment’s rooms (hence the “air” in the Airbnb name) and, perhaps to make up for the somewhat uncomfortable sleeping conditions, included a home-cooked breakfast in the deal (hence the “bnb” in the name). They bought the airbed andbreakfast.com domain, created a simple one-page website with a map showing the location of their apartment, and advertised it on Craigslist. A few hours later, they had two men and one woman signed up for their one-night-plus-one-breakfast deal, paying $80 each.

  That’s skin in the game—quite literally. Those three Airbnb pioneer customers risked their skin when they agreed to spend the night in a room with two strangers in the home of other strangers. I don’t know about you, but all kinds of horror-movie plots come to mind; I am not sure I would have slept very peacefully that night. In fact, if someone had described this as an idea for a business, my Thoughtland-based opinion would have been: “It will never work. I’d never pay to spend the night in a stranger’s home. What’s wrong with a hotel—or a proper bed-and-breakfast?” This is another great example of how wrong our initial reactions, opinions, and predictions can be, because when I’m traveling these days, Airbnb is the first website I check, and more often than not, I end up booking one of its homes.

  After the first guests left, Joe and Brian realized that this could be a big idea: The Right It. A few years later, with lots done right and going right, Airbnb was worth over $10 billion. I suspect that Joe and Brian don’t worry about being able to pay their rent anymore.

  Example: Tesla’s Pop-Up Showroom

  Not only is opening up an auto dealership really expensive, it’s a long-term commitment to one particular location. What if that location doesn’t work out for some hard-to-foresee reason? How can you get some data to guide your decision? It sounds like a perfect job for the One-Night Stand pretotype.

  To expose its cars to new markets and test the level of interest in those markets, Tesla designed and built a portable pop-up auto showroom consisting of two modified shipping containers that could be easily trucked to a location and then expanded into a 20- by 35-foot showcase in a matter of hours. Not only could potential customers experience the cars firsthand, they would also have an opportunity to make a $5,000 deposit and place an order online—lots of skin in the game. The pop-up store could provide Tesla with great firsthand data on how well its cars would sell in a particular location with minimal commitment—brilliant!

  Let’s say that Tesla wants to open a new dealership in the greater Los Angeles area, but first it wants to figure out which LA location will result in the most sales. The presence and success of other luxury car dealerships in an area might be a good starting point, but it’s OPD (Other People’s Data), and you can’t automatically assume that the people who buy from traditional luxury or sports car makers, such as Bentley, Mercedes, Cadillac, Ferrari, or Lamborghini, are the same people who would buy a Tesla. Tesla knows that its stores attract a lot of interest wherever it puts them, but how many of the people who visit a particular store are tire kickers and how many are serious potential buyers?

  Tesla can use existing data to narrow down its options to three possible locations within a 20-mile radius and then combine its pop-up showroom with a One-Night Stand pretotype and an xyz hypothesis (e.g., at least 0.5% of people who walk into the Beverly Hills showroom will place a deposit for a Tesla Model S) and get some valuable YODA—not “This is a good location for a luxury car dealership,” but “This is a good location for a Tesla dealership.”

  Test a Little Before You Invest a Lot

  As with most pretotyping techniques, the One-Night Stand seems obvious in retrospect; it’s a simple matter of applying the “test a little before you invest a lot” concept to the dimension of time: try it one time or for a few hours, days, or weeks. In other words, before making a long-term commitment, validate your long-term XYZ Hypothesis with a short-term xyz experiment.

  But rational ideas, no matter how obvious they might be, don’t always translate into rational actions. When I look at how most people and organizations approach investing in a new idea, I see the exact opposite happening: organizations sign long-term commercial-space leases and make all kinds of long-term commitments without the data necessary to prove that their idea will work.

  In the past, I’ve been as guilty of this as anyone. In the businesses I started, I regularly signed long-term leases for thousands of square feet of space (enough for dozens of employees in engineering, sales, marketing, operations, etc.), even though at the time we had just a few employees, we were at least one year away from having a product we could sell, and the only validation we had for our product was a bunch of opinions with no skin in the game.

  The Infi
ltrator Pretotype

  Sometimes creating or manufacturing a new product on a small scale requires minimal investment and little risk. The big risk is investing too much to build it right and manufacture that new product in quantity before you have enough data to confirm that there is sufficient interest or demand for it. Wouldn’t it be great if you could use a small batch—perhaps even just a single unit—of your idea and leverage someone else’s marketing and sales resources to see if anyone would buy it?

  That’s where the Infiltrator pretotype comes in. As the name suggests, the Infiltrator technique involves sneaking your product into someone else’s existing sales environment (it could be physical stores or online) where similar products are normally purchased to see if people will be interested enough to put some skin in the game and buy it.

  Example: Walhub

  My inspiration for and favorite example of this pretotyping technique comes from Justin Porcano, who leads an independent design firm in San Francisco called Upwell Design. Justin had an idea for an innovative switch plate, that rectangular piece of plastic or metal that goes around a light switch to protect the wall from finger smudges. His switch-plate design, which he called the Walhub, has hooks and pockets that you can use to conveniently hang or store things like keys, umbrellas, or flashlights. You can put a Walhub, for example, on the switch near your front door to secure your keys and hold letters that you have to mail or near the cellar door to hold a flashlight in case the lights go out and you have to check the breakers in the basement.

  Like all inventors, Justin thought that his idea was great and believed that other people would see its usefulness and buy it. He also thought that home improvement and furniture stores, like IKEA or Home Depot, would be a great place to sell it. However, unlike most inventors, Justin was wise enough to seek data to validate his beliefs (smart man!) and came up with a unique way to do that.