As a product manager or an entrepreneur, you may come to a point when you decide it’s time to introduce a new product to the world (or your company may decide it for you). When it happens – it’s a magical moment. Your (future) customers are going to enjoy a new product, a new experience or an additional value – that wasn’t there before! 

You consider all the possibilities in your head. You imagine the joy of your users. Your head fills with ideas for the features you plan to deliver. Can you feel the excitement?

You should be excited indeed. 

As an entrepreneur, your journey typically begins with the ambition to introduce a new product to the world. But as a product manager you may pass a role or two (or more..) before you are handed the opportunity to lead a new initiative and take a product from zero to one. So, when it happens, you should seize the opportunity with both hands and do your best not to mess it up. My advice in this post should hopefully assist you to stay out of trouble.

As noted in my previous posts – when considering a new feature or a product, you should almost always start with the ‘why’. If you were asked by your company to lead this initiative – you must make sure you understand why the company believes this product is needed and what its unique value is. If you came up with this initiative on your own, that’s great, but it also carries additional risks – because you may be in love with your idea and therefore be less objective. Therefore, it’s important in both cases to replace the intuition or belief behind this initiative with data as fast as you can.

Now, this post won’t teach everything you need to know as for how to take products from zero to one. For that, we’ll need more than one post. In this post we’re going to cover merely the first step you should take when an opportunity to work on a new product shows itself. Let’s dive in.

The hypotheses behind the initiative

Whether it’s someone in your company who convinced the board, or you’ve done so yourself (very remarkable if this is the case) you must sit down for a second and make sure you understand the hypotheses behind the ‘why’. 

What do I mean by that?

Most new initiatives & products rely on some hypotheses and assumptions as for why they will be successful. Those may be assumptions about evolving market trends, the value proposition of the new product or who is your ideal customer profile (ICP). No matter how confident you or your company are that those assumptions will become reality, it’s crucial to pause (even if it takes a full day) and list them out. 

For instance, if your company provides storage solutions and you believe customers will favor cheap & fast storage solutions even when they need to pay a 30% premium on that – well – that’s an assumption. 

It could be that you already have some customers who are knocking on your door asking for that and therefore you claim this is no longer an assumption. You could be right. However, from my experience, it’s more likely that you have one big customer who was asking about this new product and maybe a few smaller ones, and you were rushing to the conclusion that there is a huge demand. You need to be really careful here.

At the end of the day, it’s very rare that a new product doesn’t rely on some business assumptions, so be highly suspicious if you gave it some thought and came up empty. An assumption or an hypothesis are no longer such only if you have enough data to prove them and turn them into facts. 3-5 customers are not enough. Few articles you read on the web lately or a dozen of good ratings won’t prove much either.

Now, the reason I insist that you list down your theses about why the product is going to be successful is because I’ve seen enough times what happens when you don’t. I’ve seen entrepreneurs too often confuse assumptions with facts and embark on a journey that eventually results in a big failure because one of their fundamental assumptions about the market turns out to be wrong. You really don’t want to waste the resources, money and time involved in designing, building and launching a new product just to discover that the customers react totally differently than what you expected.

Ok… so how do you frame your hypotheses about this new initiative?

Framing your hypotheses

Listen to this story:

I once went to an interview in a startup which just got funded and was very promising. The CEO introduced himself and immediately followed up with something in the spirit of the following:

“My business relies on 3 hypotheses. Here they are:

1. Nowadays, people are … [his observation about current market trends]
2. In the very near future… [an hypothesis about how the consumer habits are going to change in the very near future]
3. And finally… [another hypothesis about the short term future]

So – if you agree with my hypotheses” – he continued – “then it’s very clear why what we’re doing here holds a huge potential”.

I liked this approach very much. It was clear, to the point and most of all – it was very obvious that if you believe his hypotheses are true, then the unavoidable conclusion is that he’s working on the right thing and he’s probably gonna be very successful (if executed properly). 

Eventually I didn’t end up working there for other reasons, but I did adopt this method of thinking (which teaches you that you can also leverage job interviews to learn something new :-)).

The steps you should follow

If you wish to be crystal clear, like the aforementioned CEO, about what hypotheses your new initiative relies on, you’ll need to follow these steps:

Step 1 – write down with no filters

Write down all hypotheses that come to mind, without any judgment. Don’t disqualify any of them yet, as long as they are somewhat connected to your initiative.

If you have a partner, or a co-founder, this process must be done together with him/her (or them). 

In fact, if you have more people you trust (could be your boss, peers, mentors or friends with relevant experience) – invite them to provide their input and what are their assumptions about this new product that you want to build.

Creating a comprehensive list is important for making sure important assumptions about your new product or initiative are not missed out.

Step 2 – clean the list

Now it’s time to be critical about the list of hypotheses and narrow it down.

First, eliminate any hypothesis about the product itself, such as important features or capabilities. You don’t need those now and you should trust yourself to figure out what your product needs as you get more input and feedback from users and customers. Now you need to focus on the opportunity itself. Besides, the product is fully under your control, unlike the market. You only want to prove hypotheses about the things you can’t control.

Second, remove hypotheses which are based too far in the future. For example – “3 years from now most of the teaching materials in school will be digital”.

It could be true, but we need assumptions about the short term period – trends that are already happening in the market and will get stronger in the coming months. If you rely on long term trends, you may run out of budget before you make enough sales.

Third, remove contradicting hypotheses. For example, if your product is aiming for the financial market and you believe your ICP is accountants but your partner believes it’s CFOs, you’ll need to make an intelligent bet and get rid of one of those. Yes, you may discover later that you were wrong, but you need to be very focused at each step of your journey, and targeting two different personas will just create a huge defocus for you. 

Fourth, get rid of all hypotheses that you have little confidence in. What’s the point of working under an assumption you don’t believe in? Now, if this is a key hypothesis which makes or breaks your new initiative then you are in a real problem. We’re probably talking about a project that was assigned to you by your company, but you have a little faith in. That’s a problem that we’re not going to solve now, but most likely is that you’ll need to take a step back and talk about it with your boss (maybe there is a close alternative you do believe in?).

Step 3 – Ensure proper coverage

By now you have a list of hypotheses about the market and the opportunity within this market. We need to make sure this list covers all your bases. A good list of hypotheses should have at least one hypothesis in each of these sections:

1. ICP (who is your ideal customer?)
2. Pains (what are the main pains of your ICP?)
3. Market (why now and whether the market is big enough)

Another hypothesis I like to add is what will make any product a ‘must-have’ in this specific domain. After all – we don’t wish to put all this effort just to be a ‘nice to have’. Being ‘nice to have’ means a product which is hard to sell even if it remedies a real pain and provides value. Not because the customers don’t want it, but rather because it will rarely become a priority for them to buy it.

Going back to our list – you need to make sure that you have at least one hypothesis in any of these sections (could be more than one about the market and the pains).

And once your list fulfills that – you’re done. And by ‘done’ I mean that you have at your disposal a list of hypotheses that you address as fast as you can.

Proving/refuting your hypotheses

Great. So you have your list. What now? Now it’s the time to understand how you can prove or refute each of your hypotheses.

Of course you want to prove all of them, but you need to be ready for the possibility that one or more will be refuted.

If that happens – it’d be much better to know that at the beginning of your journey rather than later down the road after all kinds of investments were made.

Now, some will tell you that you need to build an MVP for proving or refuting your hypotheses. Some will tell you that running an ads campaign will be more useful. And some will tell you that simply by talking to prospects who meet your ICP should be enough.

The truth is that there is no single route that you must take. You’ll need to apply your common sense and think out of the box.

The question you need to ask yourself, for each of your hypotheses is:

What is the minimal effort required for proving or refuting it?

Generally speaking – those are the options I’m familiar with, ordered from the ‘least expensive’ one to the ‘most expensive’ one:

1. Interviewing enough potential prospects who meet your profile
2. Targeted ad campaigns combined with a landing page
3. Interactive wireframes (UX and UI with no true logic behind it)
4. A real MVP (minimum viable product)

There could be different routes to different hypotheses.

For example – if you assume that your ICP is CFOs of 10M-50M ARR companies then it could be enough to target this profile with ad campaigns and test different messages.

If one of your ads gets traction with this profile (high enough CTR) then it could be enough. You might decide it’s not enough for proving the hypothesis and therefore you want to raise the bar and require that those who clicked on an ad will end up setting up a sales call.

However, if none of your ads gets enough traction then it could mean one of the following:

1.  Your assumption is wrong
2.  You didn’t assign this task to someone who actually knows how to run ad campaigns.
3. None of the messages you phrased touches the real pain (e.g. the ICP is indeed the CFO, but you were wrong about the pain)

As you can see – this can get tricky quite fast. For each route that you choose, you need to make sure that your ‘test’ is as ‘sterile’ as possible.

My advice to you is as follows:

1. If you have strong confidence that your assumptions will be proven – define the MVP and make sure your engineering team starts working on it. However, you won’t be waiting for them. Use the other methods outlined above to get more conviction. Personally, I like to combine them. Start with targeted ads and fill the funnel with potential prospects who agreed to meet a sales person. What do you demo during this sales meeting? Well, it depends on the status of your MVP. If you have something working – use that. If not – fake it with interactive wireframes and hope it’d be enough.
2. If you don’t have enough confidence in the direction you’re betting on, then better not waste the engineers’ time or put them to work on something that you will need regardless of the route you will eventually choose. Promote the other techniques in the meantime as mentioned above.

Recall that there is not a method that will be right all the time. Choose with brutal honesty the methods to use for proving/refuting your hypotheses and trust yourself to adjust if you still don’t feel you have enough conviction.

Addressing the results

There is a good chance that you’ll understand where a specific effort is going even before its ‘official’ definition of done. Trust yourself to put an end to a process if it exhausted itself.

The real challenge here is to be fully honest with the results. If all of your hypotheses were proven successfully – then great! This is the easy path, you can proceed to a full fledged MVP that you can actually sell.

However, it is more likely that one or more of your hypotheses requires some adjustments. Don’t be discouraged by this. 

For example – it could be that your partner and you decided to bet on the CFO as the ICP but as it seems from all the calls you’ve attended is that your bet was wrong. Fine – adjust it based on your new understanding and start meeting the other persona. It’s part of the game…

Summary

Receiving the opportunity to work on a brand new product is an opportunity you definitely don’t want to miss or screw up.

Therefore, before starting work on a new product, it’s strongly recommended to validate your assumptions about this new initiative. After all, building a product from scratch requires tons of effort and time. You definitely don’t want to put all this effort and time in vain.

The first step of this journey is to lay down everyone’s (who matters) assumptions about the new initiative. Going through that list, cleaning it and narrowing it down as I’ve outlined before, will leave you with the list of the hypotheses that you validate before moving forward.

There is more than one method for validating assumptions and you’ll need to use your brain, combined with creativity and brutal honesty, for understanding the path for cracking each of the assumptions on your list.

Once you have agreed on how to tackle each hypothesis on your list, it’s time to execute, while being completely honest about what you encounter in reality.

If all proven – great, move forward to an MVP. If some of your hypotheses were refuted, bummer, but it’s part of the journey. Iterate until you understand who your ICP is, what is the pain you’re solving for this persona and whether this persona represents a big enough & interesting market.

Good luck!

Oh.. by the way, if you’ve made it here, you deserve a reward – below you can find a real example of the process. I didn’t want to put it as part of the post, as it would kill the flow. Anyway, here it is:

You are a product manager in a company that provides online courses for youth that help them improve their performance in high school and be better prepared for college/university. The CEO comes to you one day and asks you to lead a new initiative to expand the company’s offering to elderly people as well. Great! 

When you ask your CEO about the ‘why’ and the value he says that it will open a vast huge market, and that elderly people would like to learn new stuff too. The company has already proven itself to be successful with online courses delivery. They know how much it costs to produce such content, how much they should charge and how the overall lesson template should look like. “Now, go and figure out the small details… will you?”

On the face of it – this doesn’t sound too risky. Well… theoretically at least.

You decided to listen to my advice and spent some time listing down the theses behind this initiative. You came up with this:

1. We know how much it costs to produce content for elders
2. We know how much to charge elders for such content
3. We know how to craft an online session to elders in terms of general template and course structure
4. Elderly people want to learn new stuff too
5. Online courses for older people represent a huge market

Ok…nice attempt, but the first iteration is not that great. Let’s refine it.

Assumptions 1, 2 and 3 are about the product and not about the market. As I noted above, the product is something you control. The market is not. You will deal with the product soon enough. 

Assumption number 4 is most likely true, but it’s too general. Assumption number 5 is also too general. Maybe there is a way to quantify this?

Last – there is a missing assumption here, which may sound a bit similar to the third assumption but it’s not. I’d phrase it like this:

“There is enough content out there that can be transformed to online courses and is relevant for elderly people.” 

Here is how I’d rephrase everything.

1. People who have reached their retirement phase in life are open to learning new things and would be open to take online courses about things they are passionate about and didn’t have the time to address during the time they worked full time. 
2. To maximize on this opportunity, the best age to target would be anyone from the retirement age up to the age of 75.
3. There is enough content out there that can be transformed to online courses which are phrased and relevant for elderly people.
4. The key to becoming something closer to a ‘must have’ for this audience is to target their passions and promise them that by taking a course with our company they can easily become professionals about the things they are passionate about (needles to say we need to deliver on this promise)

Where assumption #1 is probably the most critical as it can really kill your business if it turns out to be wrong. 

Assumption #4 addresses your growth rate for the business. If it turns out to be wrong – you may not grow as fast as you imagine and will fall in the category of ‘nice to have’. 

This is the list I came up with after spending a few minutes on that. You can probably come up with a further refined list if you’ll spend a bit more. But you got the idea, right?