Hi friends 👋
Here are some of my best reads this week:
- The Minimum Viable Testing process for evaluating startup ideas
- When to make your sign up flow harder
#1 The Minimum Viable Testing process for evaluating startup ideas
The traditional dogma in the startup ecosystem is that you can't predict whether people will want your product. Instead, you do some customer research, throw an MVP out there as fast as possible, and hope it hits. Thankfully, there's a better way. Enter Minimum Viable Testing.
Why Minimum Viable Products aren't useful:
- To be able to validate a customer journey, people often over-build their MVPs and include a ton of things they shouldn't build before they know they can sell it
- Building on top of MVPs leads to tech debt and makes a horrible product
- Iterating MVPs is not strategic, but rather throwing spaghetti on the wall and seeing if it sticks (or not)
- MVPs easily lead to over-focusing on what customers say (instead of what they would actually do if you introduced a novel product)
MVP vs. MVT
- An MVP (minimum viable product) is a basic early version of a product that looks and feels like a simplified version of the eventual vision.
- An MVT (minimum viable testing), on the other hand, does not attempt to look like the eventual product. It's rather a specific test of an assumption that must be true for the business to succeed. Instead of building, you can more efficiently run a number of MVTs, create a vision for a product that fits a market and then go into a "build phase."
A framework to test critical assumptions and to predict the success of an idea: Minimum Viable Testing
After understanding your user's jobs-to-be-done and how you could help them, it's time to start testing.
- Find a value prop that speaks to their actions. Think: what are they already trying to do, and how can you help them achieve their goals better than they know they can? E.g., The promise of Maven is that a platform for cohort-based courses would dramatically improve the quality of education on the internet.
- List the riskiest assumptions that might lead your business to succeed or fail and test them. Eliminate things like building something people don't want, poor profitability, execution problems, too small market size, etc. E.g., Maven assumed people might not be willing to pay 10x more for a cohort-based course than for an asynchronous course.
- Test your assumptions through Minimum Viable Tests to gather insights to build a new product or shut down in case the test failed. Focus only on the "atomic unit" of what you plan to sell. E.g., For Maven, the atomic unit is a cohort-based course. How can we test whether cohort-based courses work as quickly as possible?
How to plan and run MVTs
- Devise a test for a specific assumption. If your riskiest hypothesis is whether people will want your product, do not ask them. Force them to pay for it with their time or their money. If they don't, iterate until you find something people are absolutely in love with.
- Focus only on one hypothesis at a time (but explore them all). If you were building Amazon, you don't need the full web ordering system and a warehouse to evaluate whether your business could fly. Instead, try to validate your biggest risky assumption first, e.g., do people actually want to buy books online?
- Pick a clear and specific atomic unit – the smallest possible item that you could distill your product down to. Take Amazon. In 1994, nobody wanted a massive online store that sells anything and everything – instead, they wanted to buy a book their closest store didn't have in stock. The atomic unit test for Amazon could even just be a phone service where you call, and they help you find any book you may want.
- Don't look for binary answers only. E.g., Maven could learn that a specific type of customer loves cohort-based courses more than others or that the value is in one major part of the course (say, the community) instead of others (say, the quality of the content).
What happens after MVT?
- In the Maven example, the old MVP dogma would've said to build an instructor-facing product like a syllabus designer. After running MVTs, you can either ship the first version of the product or focus on nailing the core value first, as Maven did.
- However, after running a few MVTs, they already knew instructors would use such a product – as long as they could show them that cohort-based courses would earn them money. They also learned that instructors didn't care about the platform per se. Instead, they cared about students loving their course, attracting more students, and being in good company (social proof). This allowed Maven to skip MVP entirely and focus on attracting more instructors on the platform instead.
- Six months later, they were already working with 50+ instructors and were working on introducing "missing" features.
#2 When to make your sign up flow harder
Behavioral "frictions" generally decrease the likelihood of a user completing a specific task. While most of the time, friction might prevent certain behaviors, real-life examples tell a more nuanced story. Some companies have found friction may be "good" if it serves one of these purposes:
- Decrease the perception of costs: It's about perceived friction, not just actual friction. Contrary to 'best practices,' adding more steps to a flow often can actually increase conversion. Users tend to focus on the current screen and the immediate decision of whether to continue or exit. They perform cost-benefit analyses for each step at a time. E.g., Suppose your sign-up form was long, or alternatively, only included few steps (low logistical friction) but required users to fill out the information that looks like high effort because you'd have to fill out your credit card information (high psychological friction). In that case, you could split it into two different screens. By reducing steps on each screen and separating them into more screens with fewer steps, the user perceives a reduced cost on each screen. This seemingly minor change in the cost-benefit equation can lead to dramatic increases in conversion.
- Increase attention to future benefits: Friction can increase conversion by changing someone's mental model. Apartment List is an online apartment rental marketplace. They increased conversion by adding relevant and easy to complete steps in their sign-up flow (e.g., asking a user looking for an apartment how many bedrooms they need, their price range, and which features they want). StitchFix is a subscription personal styling service. StitchFix asks users if they want help with outfits for work, casual, or date nights. Without this question, users may assume StitchFix only handles one type of wardrobe — i.e., the business dress.
- Increase the likelihood of commitment: Friction slows users down, and sometimes that's a good thing for making decisions. OKPanda observed that people completed more language learning sessions when required to put down a credit card to activate the one-month free trial than those who were not asked to put down a credit card to activate it. They believe this was due to helping people actively commit to trying out the product. People who experienced no friction never fully committed to their free month.
That's it for this week. I'd love to know what was your favorite read this week!
P.p.p.s. Connect with me on LinkedIn and Twitter! (Warning: I mainly post memes and rants about marketing, but if that's your jam, let's be friends. I'm also Head of Growth at an EdTech startup and a freelance consultant for B2B SaaS startups, but honestly, I'm more into shitposting than personal branding.)