More and more companies are discovering this Lean innovation either Lean startup can help them better streamline their innovation processes. Especially for totally new product development, the application of Lean innovation principles results in a more efficient and successful innovation pipeline.
In this blog series, Francis-Paul Janssen from AOMB Intellectual Property and Joyce Oomen van Pimcy Innovation & Portfolio Management answer these and other questions. We thank Jenk de Jong of the Chamber of Commerce for his feedback and revisions.
In part 1, we introduced our blog series, the writers and structure of the blog series. In part 2, we discussed the basic principles of Lean Innovation and IP Strategy. In part 3 we took you into our (fictional) business idea and went into it part 4 further in our voyage of discovery.
In this part 5 we set up a number of experiments and learn from them.
In the previous phase, we have already learned a lot about our target group and our potential product. We adjust our initial business model.
We also make a number of estimates with regard to costs, expected margin, expected sales numbers, etc., to see whether we think that at this price there is actually a business in it. This calculation is not part of the case for now.
Minimum Viable Product
The easiest way to understand the concept of a Minimum Viable Product is the 'cupcake'.
With a traditional approach, with the end point in sight, the wedding cake, we would build our product step by step. This lengthens the development time, as a product is only involved in the final phase. With the Lean startup approach you start with a cupcake. After all, do people eat cake, do they like the taste, is the texture good? Step by step we learn to bake more and more complicated cakes to end with the wedding cake. Which in all likelihood looks and tastes different than if we had taken the first approach.
Well, how are we going to do this for our Fantoytic board? Considering that these toys must meet all kinds of safety requirements and where expensive production is required to make things or have them made, we first want to learn for Pimcy whether our product is really that good. So we are going to set up a number of experiments.
We complete a test card for each experiment, so that we make clear agreements in advance about what we measure, why we measure this and which criterion applies.
Build Experiment 1 You Tube
We decide to buy an existing hoverboard and convert it to the model we have in mind. Visually it looks the same, only the bouncing technology, the USB charger, microphone and control with the steering wheel do not really work yet.
However, through video editing we manage to make it look real. We make a cool video clip explaining our 'Fantoytic board' and put it on YouTube.
The YouTube video also refers to our landing page. (experiment 2)
We showed the video to our IP advisor, who indicates that there are no problems because the really important technique is not revealed. That is not yet possible, because we do not yet know how to implement the bouncing technology. In any case: the film is not a problem for a later patent.
Build Experiment 2 Landing page
We also create a landing page for our Fantoytic board, with the same video, some more background information, the price and the option to leave your e-mail address.
We promise to inform you as soon as our product is on the market.
We start a social media campaign via Facebook, Instagram and Google Adwords so that our target group can find us. We also measure the conversion of this!
We set up our experiments and go live! During the test month we look at what is happening from week to week. We also compare the results of the group viewing the video and / or landing page in the first week with the group viewing the video and / or landing page in the second week, and so on. This is also called cohort analysis. We want to see if interest grows every week.
Because we have set clear standards, we also know when we can continue on the chosen path. For example, if the number of visitors is less than expected, or the number of clicks is less than expected, this means that we have to rethink the experiment. Maybe the experiment was not done properly, maybe it's the wrong experiment, maybe there is just no interest in our product.
Normally you will go through several cycles of experiments before you receive confirmation that you are on the right track. For this (fictitious) company, everything seems to go right at once!