This document discusses product development and testing methodologies. It emphasizes defining hypotheses about customer needs and desires, then rapidly building minimum viable products to test those hypotheses. Several examples are provided of hypotheses that could be tested for a hypothetical frozen treat business, as well as examples of minimum viable products and experiments used to validate or invalidate hypotheses. The document stresses testing assumptions early and often through small, low-cost experiments.

1. MIT Entrepreneurship and
Maker Skills Integrator
DE Theme 2: What can you do for your customer?
DE Theme 5: How do you design and build your product?
January 2018
Elaine Chen

2. Revisiting that ice cream thing

4. …
Pivots are a good thing

5. Themes 2 & 5: What can you do for your
customer? + Hypothesis testing

6. Theme 2: All about the solution
6

7. Full Life Cycle Use Case
7
Find out
they
need
some-
thing
Explore
options
Anal-
yze
options
Get
Product
Install
Use &
Get
Value
Determ-
ine
Value
Pay
Buy
More
Tell
Others

8. Let’s whiteboard this
8

9. High Level Product Spec Example:
Zeo Mobile
9
Zeo MobileZeo 2.0 Bedside Display
Universal Bluetooth Headband
Zeo Sleep
Hub
Environmental
Sensor
Accessory
Secondary
Headband
Other
Sensor
Accessories

10. High level product spec example: Dropbox
10

11. 11

12. VALUE PROPOSITION
Quantified Value Proposition
Task: transferring paint cylinders from one
conveyor to another
Without Baxter: 1 operator per shift x 2
shifts - $104k annual cost
With Baxter: Up front cost $32,000 + $625
annual operating cost
Savings analysis: 4 MONTHS ROI
3 year savings: $310k

13. A note on luxury items
13

14. Competitive 2x2 Example
Changeovertimetoaccommodatenewjobs
Slow(months/years)Fast(days)
Expensive InexpensiveTotal cost of ownership

15. Competitive 2x2 Example
Changeovertimetoaccommodatenewjobs
Slow(months/years)Fast(days)
Expensive InexpensiveTotal cost of ownership
Important concept:
It’s all about the axes

16. Competitive 2x2 Example
Changeovertimetoaccommodatenewjobs
Slow(months/years)Fast(days)
Expensive InexpensiveTotal cost of ownership
Important concept 2:
UP and to the RIGHT

17. Define your core
17
Hardware core Software / systems core

18. What is the core for each of these companies?
18
Subscriber list
Online fulfilment etc etc
Customer Experience
Hardcore technology
Search etc etcOperational excellence

19. Theme 2: Reprise

20. 20
Imagecredit:istockphoto.com

21. Theme 5:
How do you define and build your product?
21

22. Hypothesis testing
“A good hypothesis
needs to be written
down.”
– Ben Yoskovitz, Co-Author, “Lean Analytics”

23. Basic structure
23
I believe [target market] will [do this action /
use this solution] for [this reason].

24. Basic structure
24
I believe [target market] will [do this action /
use this solution] for [this reason].
Easily testable

25. Example hypotheses
25
I believe frustrated sleepers will wear a
headband every night to measure their
sleep quality to understand what’s going on.
I believe plant managers will buy Baxter
without a proof-of-concept because the
price is below the POC threshold.

26. Which hypothesis should you test first?
26
Pick the first hypothesis you want to test – and define a
corresponding MVP to test it with
Riskiest
Longest lead time
Costliest if invalidated
… etc

27. In class exercise: Hypotheses
27
Define the top 3-5 riskiest hypotheses that, if invalidated,
could cause a pivot for the frozen treat venture.
For each hypothesis, use this structure (or at least start
with “I believe”):
I believe [target market] will [do this action / use this
solution] for [this reason].
Pick 1 hypothesis to be tested first

28. Sharing!
28

29. The Minimum Viable Product
29
The least amount of work you can do
to learn the most of something

30. 30

31. Example MVPs
31
Fake, non-functional
headband
Ugly interactive prototype
Drawing of a robot plus an
animation

32. iOS App MVP Test
32
Hypothesis: “I believe users will find the gesture UX
delightful.”
MVP: Functional interactive prototype
Experiment: Usability benchmark. Users were given
tasks to complete that required them figuring out the
gesture UX on their own.
Duration: 30 min UX test + 15 min debrief
Threshold: 50% of users will complete the task.
Result: 0% figured it out.
We killed the feature.

33. On Currency

34. Examples of ”currency”
• Yes to scheduling a meeting to discuss
• Actually getting a scheduled meeting on the calendar
• Actually meeting you
• Giving you the email of someone else you should meet
• E-introducing you to someone else you should meet
• Providing an email address
• Providing Credit Card for a pre-order (no charge)
• Providing Credit Card for a pre-order (charged, rain check provided)
• … etc
34

35. Example 1: Landing Page Test
35

36. Example 2: Kickstarter
36

37. Example 3: Preorder on own site
37

38. Example 4: Paid concierge beta
38
Hypothesis: “User will pay for this SaaS
visualization service”.
MVP: Fully faked via emails and Photoshop
Experiment: 10 customer, paid beta
Duration: 3 months
Currency: $199/month, prepaid
Threshold: Able to close more than 5 for beta
They closed 10. It’s a GO!
Extreme example of “get paid from day 1” without a
line of code

39. Solve for speed.
Test small things.
39

40. DE Theme 5 Reprise: Test early, test often
40

41. Supplemental Readings
• “Our dangerous obsession with the MVP” – Bill Aulet,
Techcrunch
• “Defining and Building the MVP” – Elaine Chen
(Slideshare)
• “Product definition templates” – Elaine Chen (Slideshare)
• “Validating Hypotheses with Landing Page Tests” - Elaine
Chen (PDF)
41

42. Questions?
42

43. Elevator pitch
• Take what you’ve got thus far with the hypothetical
customer, end user, use case, and product concept…
• And concoct a 60 second elevator pitch. WE WILL TIME
YOU AND CUT YOU OFF.
• What to include in some order:
• Problem (must have)
• Solution (must have)
• Benefits
• Ask
• Have fun with it!
43