Overcome “Inventors’ Blindness” by market-testing your ideas
August 25, 2014
So you think you’re on to the next best thing after sliced bread? Well, I am sure two people in this world would agree with you – you and your mom. But two people don’t make a market, even if you have just one jelly sandwich to sell! As a business owner and product developer myself, I often find that people don’t understand my ideas; and if they didn’t, well, they weren’t really my target audience in the first place! So I continue to defend my product against “criticism”. Yet, if I continue along this line of thinking, I will quickly book my place in the annals of failed businesses. If people don’t understand what you are doing, watch out! You may well have the same shortsighted syndrome as I.
Fortunately, I was able to catch myself on the act of the “Inventors’ Blindness”, a bias which I attribute to people who have developed their own products or ideas and are blind to others’ inability to understand it. It is a particularly strong bias that commingles affect, hindsight, confirmation and even simulation heuristics. A potentially damaging bias, if there was one. We are not here to talk about psychological blindness but ways we can avoid it, and walk down the path of success.
The Four Tests
In her book The Catalyst: How you can become an extraordinary growth leader, Jeanne Liedtka devised what is essentially a market test protocol called the Learning Launch. The Learning Launch is a process where you articulate your assumptions based on four main tests, and then go out to the market to verify them. The four tests are:
Customer value is basically identifying the need to be met and then finding a solution to achieve that. It may be an improvement on a current product, or it may be a technological solution that the world has not yet met. Whichever the case, product inventors normally base their development on assumptions which they don’t normally articulate nor ascertain. Yet just because you think your idea is great does not mean that the rest of the world might. So there is a need to test all the assumptions on the proposed product by bringing it to the market to be torn apart. The more it is torn apart and rebuilt, the more there will be a market for it.
The execution test looks at our operational assumptions. Are you able to make the product that the customers need? Can you find the right suppliers? Can you deliver the product to your customer in a timely fashion? These are all the questions we need to answer as we look at our ability to execute the idea. After all, the minute we put our ideas to the test and try to make it, will we uncover even more questions.
If one cannot pass the first two tests, there is really no point in going on, and the idea needs to be put to rest. But let’s say that you do indeed have the next best thing after sliced bread, and that you can make one, then the next question is to see if you can make more of it in a timely fashion. Here you need to see if there is a way to scale your production, looking at ways to make it cost effective. This might mean you identifying production facilities outside, even, of your country. You might need to source appropriate raw materials, or product inputs, and the people to put it together. You might need specialized machines to create your product, or knowledge that resides in a few. These are all the questions that need to be asked and answered.
Once you have cleared the third test, you are almost home free. Almost. Because you might have to think about how you will defend your idea, especially if it is so revolutionary. Most people go down the patenting route, but others may not need to based on high barriers to entry like expertise or process or machinery. Sometimes your business model may be a source of barrier, thereby restricting people from eroding your margins even before you recover your costs.
Fail Fast, Fail Cheap
The journey to confirm all four tests is not short. It can sometimes take five months for some; for others three years! Obviously, the longer it takes, the more money it requires. The mantra for Learning Launches is to see how fast we can fail, not how long we can avoid it. And the cheaper we fail, the better. One of the key reasons why people don’t cut their losses fast is the sunk cost fallacy; the more they have sunk into it, the harder it is to let go. By making it cheap by design, and resisting the temptation to throw more money into the test than was budgeted for, the “kill” decision becomes easier. And with that, the ability to learn what didn’t work.
Ultimately, we want to get to what works as fast and as cheaply as possible.
Get the Learning Launch template
If you want to start your own Learning Launch, drop me an email at firstname.lastname@example.org and I can give you a Learning Launch template that we created to help companies plan the launch faster. It comes complimentary from us to you.
A I Training & Consulting teaches Prof Jeanne Liedtka’s organic growth methodologies, including the Learning Launch, in Asia. For more information, visit our webpage on Organic Growth.