How to know if a market exists for your new product or service? … by Pretotyping it first!
Pretotyping… wait… don’t you mean Prototyping?
No. The term 'Pretotype' was first coined in 2011 by Alberto Savoia in his pretotype edition eBook “Pretotype It” (available as a free PDF here), where he defined Pretotyping as:
“... a way to test an idea quickly and inexpensively by creating extremely simplified, mocked or virtual versions of that product to help validate the premise that "If we build it, they will use it.”
Unlike traditional approaches to new product development which are largely concerned with questions around whether the organisation has the internal capabilities to build a new product/service, and at a level that delivers a return on that investment; Pretotyping starts by trying to answer the key question - "Does a market exist for our new product or service?"
What are some examples of pretotyping?
Alberto Savoia’s Pretotyping eBook - Alberto actually used a pretotyping technique when he wrote the first version of his pretotyping book idea over an accelerated 5-day period (books normally take up to a year or more!). He then handed out copies to friends, who after reading it, started to ask for more copies to give to their friends (this was starting to go viral). After many more requests for even more books, Alberto decided to create a PDF copy and then made it available for free online, plus listed it on the Amazon Kindle store for the minimum allowable price of $0.99. Downloads and purchases of the booklet were significant and feedback from avid readers encouraged Alberto to expand the book’s techniques and examples. So, Alberto invested the time and expenses into writing and publishing a completed version of the book, and had it published for sale with considerable commercial success!
Business Model Generation - A while back I was co-author on a series of books relating to Business Modelling, including Business Model Generation, Business Model You, and Value Proposition Design. When designing the first book, we used an entirely new business model for writing and publishing books (in our case, a book on how to generate and evaluate new business models!). By adopting a pretotyping approach, it allowed us to spend orders of magnitude less time and money to pull together the design concept, and most importantly, to confirm if a market actually existed for the book by engaging a subset of the target market (business innovation consultants) who happily offered up something of significant value to themselves (volunteering many hours of their time) and for their sacrifice, were all individually named within the books as co-authors.
WÄLHUB - Upwell, an independent design studio, wanted to test the validity of a new product - a readily accessible light switch that also held your belongings (mail, car keys etc.). The studio employed a pretotyping approach by stealthily placing a mock-up of their WÄLHUB product within an Ikea store and observing if (Ikea) customers, who thought it was an Ikea product, would show interest and an intention to buy the product. So, with this experiment in mind, Upwell purchased some Ikea uniforms on eBay and then went into an Ikea store and set up their product within some of the display rooms. They then lingered near the display room and watched as people interacted with their product, noting the number of times it was picked up, put in a shopping trolley, and eventually whether the product got to the point of sale (much to the confusion of the Ikea checkout staff!). There's a great video which shows how Upwell did it that's quite amusing and worth the time to watch - see below (note - I'm not sure if this approach is legal any more, or ever was, so you might want to seek permission before trying this experiment with your own ideas!)
Attribution: "Design Agency Trolls Ikea Places Its Product In Store- WALHUB" - link - by FRESH is licensed under [CC BY 2.0].
Who is Alberto Savoia?
Alberto Savoia was Google’s first engineering director and led the team that launched Google’s revolutionary AdWords project. He is currently teaching and collaborating with Stanford University and continues to work with Google in the role of "innovation agitator".
Drawing on his book "The Right It" (which was the production version of his earlier pretotyped eBook) he begins with the premise that at least 80 percent of innovations fail, even if competently executed. He discusses how to reframe the central challenge of innovation as a question not of skill or technology, but of market demand - starting with the key question: "Will anyone actually care?".
There's an excellent Stanford seminar by Alberto which explains the concepts behind Pretotyping - shown below.
Attribution: "Stanford Seminar - Build The Right It" - link - by Alberto Savoia is licensed under YouTube Terms of Service (License to Other Users).
How does Pretotyping differ from Prototyping?
Prototyping helps an organisation understand and test whether it has the internal capabilities to build a new product/service, with the required features, and those features satisfy the perceived customer requirements (in terms of functionality and quality). However, all this is predicated on the assumption that a market exists.
Furthermore, prototype development is expensive (often costing thousands, hundreds of thousands of dollars - or more), and takes a considerable amount of time to bring to market (months or years in some cases) - by which time you may come to realise you got it completely wrong and there never was a market to start with, or perhaps the market was temporary and no longer exists, or it existed but has since (in the time you were building a prototype) evolved and moved on to the next 'shiny new thing' (likely not your new thing!). There are plenty of news stories discussing how slower-moving big banks are suffering a loss of (increasingly savvy) customers to market-focused, customer-centric, data-driven FinTech/DeFi challengers to see how this is working out in the real world.
On the other hand, Pretotyping both challenges and supports the traditional prototyping approach but, instead, it starts by testing whether a market exists, and if so, conducts a series of experiments to measure which product/service features the target market finds important enough that they are willing to transact with you through an exchange of something they value (e.g. paying money, providing their contact details, etc.). By exchanging something your customer values, it provides strong, real-world evidence (i.e., data which you have directly gathered - or YODA, as Alberto terms it) that they value your product/service offering strongly enough that they are willing to give something up in exchange.
So, a pretotype allows you to test if a market exists - and if there is none, then clearly there's no point wasting your time and money building a prototype! However, if a market does exist, and you have used pretotyping to validate that people are interested in your product or service, you can then consider prototyping a stripped-down version of a final product/service to answer questions related to building it (capabilities, ROI etc.) and the prototype will be more functional than a pretotype.
What is the Pretotyping technique?
Pretotyping occurs whereby the business forms a 'market hypothesis' (an idea about a product/service and a potential market) and then designs and conducts a series of relatively inexpensive, low risk experiments to test the market hypothesis (idea). By conducting these focused experiments, the business gathers first-hand data to validate whether a market exists for that idea - or as Alberto puts it "Make sure – as quickly and as cheaply as you can – that you are building the right it before you build it right."
What are the key steps when Pretotyping?
The following steps are generally undertaken when pretotyping:
Start with an idea.
Identify the big picture or Market Engagement Hypothesis (MEH) - the premises of the idea and how the target market will engage with it. (e.g., School students need to carry around a large bag which contains a laptop, multiple textbooks and notepads to/from school, yet they live in a world full of technological advances which could help to reduce the physical load).
Turn the MEH into the form of an XYZ Hypothesis: "At least X% of Y will Z", where X% represents a percentage of your target market, Y and Z represents how that percentage of the market will engage with your product idea (e.g. At least {50%} of {Students} will {buy an e-ink tablet priced at $600 that can store all their textbooks electronically, plus allow them to take handwritten notes on the device}).
Consider the XYZ Hypothesis and reframe it into a set of smaller, more local 'xyz hypotheses' that you can quickly test (e.g. At least {10%} of {Students of English Literature in Year 11 at Sandringham College} will {buy an e-ink tablet priced at $600 that can store all their textbooks electronically, plus allow them to take handwritten notes on the device}).
Run experiments and collect your own data (instead of relying on other people's data as a proxy)
Analyse your own data
Decide on your next course of action (Tweak and experiment more, Proceed, or Drop it)
Ok, so what are YOUR next steps?
We hope the above has provided some insights into an exciting, different approach to reduce costs and improve your chances of success when considering new ideas and designing/developing new products and services at your organisation.
Need Assistance? If you need assistance with how to approach pretotyping, then please consider engaging Explore Digital as a trusted advisor on your journey. Details of our Pretotyping services can be found here -> Explore Digital - Pretotyping Services.
