Tim Vang (Denmark) is co-founder and CEO of preeto. He is the quintessence of innovation, experimentation, and entrepreneurship with 20+ years of experience from the start-up sphere. Now focusing on bringing the entrepreneurial spirit into the corporate world around the globe, Tim pioneered crowdfunding in 2004.
Exponential growth has made its way into numerous industries. The development of epoch-making products and services is fed daily by new technology, and large businesses are suddenly overtaken on the inside track by intelligent and agile startups that understand how to exploit technology to its fullest. Well-established businesses must increasingly close. And this is only the tentative beginning of the exponential growth!
With the same starting point, Google used a couple of years to develop pretotyping—a powerful tool that immediately enables businesses to be able, quickly and cheaply, to test the market in a world characterized by fierce competition, critical consumers, much shorter product life cycles, and technological exponential growth. Pretotyping is a vital tool in the new reality and addresses both entrepreneurs and corporates that don’t want to be overtaken by two people in a garage.
Time to change direction
Despite a flood of books and articles on innovation, business development, and the like, incredibly little has happened in these fields. Even large international players are whip shy about acting on the opportunities taking place outside their front doors, where the great majority of all businesses still use outdated methods for development of new products and services. Traditional tools such as market analyses, trend studies, and business plans all have one thing in common: they build on well-meaning assumptions of what they think customers want. Decisions must be based on market data and not based on customers’ opinions gathered via interviews, focus groups, or the business’s own beliefs about their customers’ needs.
Selling the skin before the bear is shot
Most of you probably know about prototyping, which contributes to forming an idea or a concept on the path to a more or less functioning product or service (editor’s note: the term product is used herein). Prototyping answers the question of whether a product in reality can be created using the available technology and knowledge or whether a design is satisfactory. But why use resources to build something that the market isn’t interested in or ready for, despite what the price, target group, and market analyses have all indicated? Even projects executed in world-class circumstances fail in a frightening 80% of cases when they’re launched on the market, simply because they were based on the wrong premises.
What would it mean for your company if you knew that you were having the right product before you made it? Pretotyping distinguishes quite clearly between a good idea and a good business idea. The decisive aspect is getting the most valid market data with the smallest possible use of resources. It is all about testing assumptions on market terms and verifying positively or negatively whether a given product has the potential for commercial success. Pretotyping has just one purpose: to find out whether customers are willing to buy a product or start using it here and now. In other words, small experiments before large investments.
Failing cheaply
When Sara Blakely, entrepreneur, founder of Spanx, and self-made billionaire, relates her success story, her speech of thanks is always directed at her father. Every day during her childhood, he never asked Sara how her day had been. Instead, he asked her what she’d failed at that day. Sara was brought up in a culture of errors, which put her in a position to challenge the status quo and test new limits and learn from her mistakes. By comparison, many organizations suffer from a zero-error culture (although something else may be stated in the business’s values and mission statement). If you take large chances and fail, you’ll get a warning or, in the worst case, you’ll be fired. But if, on the other hand, the business is successful, you’ll be rewarded on the condition that you did everything correctly.
Pretotyping makes it possible to take big chances with little risk by doing things in a completely new way. That gives the business the possibility of failing easily and cheaply four times in a row, for example, and still hitting the jackpot the next time. With pretotyping, your failures cost you next to nothing; in return, the gains can be larger than one can imagine at first glance because you can test breakthrough ideas.
A real startup mindset
Pretotyping is more than a tool; it’s a mindset. Pretotyping gives businesses wider wings with which to rise to new heights and allows them to ride on a wave of products that have the potential for exponential growth. That makes the business capable of competing with agile startups, which are capturing the arena with increasing speed. No dearly bought campaign or hype can sell a product that from the get-go doesn’t match the customers’ demands. The rule that applies to every business is to start small and test the market before the big guns are deployed. In Silicon Valley, pretotyping has become an organic standard in startups but also in the giants. The point is that as a pretotyper you understand the value of speedy and almost resource-free iterations being tested on the real market, no matter how big an organization you are in.
Empty air
A pretotype is mainly made up of empty air—in a good way. Fundamentally, you’re making people believe that a product or a service exists that isn’t found in reality. It is from this that the term pretotyping derives—from pretending. This means that consumers are first told you’re shooting with blanks when they have their money in their hands. You therefore pretotype most often with a selection of potential customers to learn about conversion rates and contexts with their next interaction. If a customer experiences that the product or service, which you pretend exists, is a test, then the pretotype hasn’t been executed properly. This may sound a little bit like a magician and his tricks, but it is precisely what Alberto Savoia (when he was at Google) has used years on systematizing.
1-2-3 pretotype
Is pretotyping, then, just another theory from the 75,000-plus books on innovation, each requiring you read 350-odd pages and an appendix that’s twice as long? No! The fact is that pretotyping is a true game-changer that businesses can start to use very quickly. It’s also very easy to learn, as in just some hours you’ll be armed to fight with methods such as Fake Door, Pinocchio, and One Night Stand. With pretotyping in your toolbox, you’ll ensure that your organization can test physical products, technology, and services across consumer groups—cheaply, quickly, and efficiently. Make your business entrepreneurial with the emphasis on failing often, daring more, and not least taking healthy decisions based on data from the real world.
Pretotyping Manifesto
Innovators beat ideas.
Pretotypes beat product types.
Building beats talking.
Simplicity beats features.
Now beats later.
Commitment beats committees.
Data beats opinions.
Take risks,
Tim
Most prototypes are builtto answer questions suchas “Can we build it?” or “Willit work as expected?”instead of focusing onquestions such as “Shouldwe build it at all?” or “If webuild it, will people buy itand use it?”
Alberto Savoia