About

Hello. Hi and welcome to the bottom-up skills podcast I'm Mike Parsons. And I'm the CEO of Qualitance and we are starting a brand new series today. We are going to focus on my six favorite product strategy tools. And today we're going to talk about using lean hypothesis for better product strategies. Now the lean hypothesis is one of, many of the goodies that come from the lean up lean startup practice.So  immortalized by Eric Reese. Now the hypothesis that comes with the lean practice is a concise product ideas statement that can actually be separated into individual parts. And those parts can be tested. I find this a great way. To be clear about a product idea. You know, when you're got that famous question from someone, Hey, what's, what's this idea you have for a product.It's a great [00:01:00] way of being very disciplined and concise about the idea, because, you know, we can tend to rattle on a bit. But furthermore, what the hypothesis actually does is create these very discrete testable factors inside of the statement. So you can actually test each and every one of them. And a great way to kind of populate a lean hypothesis is to use another great tool from the lean startup practice, which is the value proposition canvas.But because that one is so famous and yet I think the lean hypothesis is not used nearly enough. I would really like to focus on one of my favorite tools, which is this lean hypothesis. I really want to share with you how this is a great way of communicating your productivity, but furthermore, it is an insanely good way to tear it apart to test it, to validate it so that we can actually make a product.Worth making. We can make a product that is not only desirable  to its [00:02:00] uses, but it's technically viable and financially feasible. This is what we can do. So let's break down the universe of the lean hypothesis. So a formal scientific hypothesis. Is a precise testable statement of what you, the entrepreneur, the designer, the researcher predict will be the outcome.And, you know, it's your best guess. But the real point here is that it's testable. So what you will find is that your hypothesis changes over time and it's the perfect way to enter into product development when you've actually validated your lean hypothesis. But in these early stages, it's like, there are so many possibilities with our products.They could go many different ways, but for many different things, the hypothesis is a great, simple, [00:03:00] relatable way for us to all, to come back to this underlying premise, to test it and to make sure that it is truly validated wholly completely and totally. So the benefit of having a lean hypothesis is that it minimizes the risk because if you've done it properly, you've not only written your hypothesis, but as you probably starting to realize you've tested it too.So therefore, if your development and design team start from a validated hypothesis, you've effectively got. Product, well, not product market fit. I would say problem solution fit  on the way. So this means that the development can go faster. You can really hone towards product market fit because you've essentially defined problem solution fit, and you can get on with some of that fun stuff, building an MVP for the very first time.Now, at this point, you're probably thinking.  [00:04:00]Mike, what exactly is the hypothesis? Can you give us an example? How's it structured? Well, here's the good news. What I'm going to do is I'm going to break it down for you. And if you are interested to learn more about the lean hypothesis, you can go to bottom-up dot IO and you'll find that we have a whole course on the lean hypothesis, so you can become a master at it too.All right, let's break it down. Now there's essentially, you know, some variations of a lean hypothesis that different people use. I'm going to take you through what I consider to be my go-to structure of a lean hypothesis. Okay. So. Let's establish the starting point. You have the desire to create a product or service brand new business, and you have an idea, a hunch, a notion about what it's going to be.Here's a really good way [00:05:00] to structure it. The first part of a venture hypothesis should be to define a persona who is the user, who is the customer. And what problem do they face? That's the second part. Now that's really important because many different types of customers, many different types of problems.So define a particular type of customer, that particular problem that they experience. I don't worry. I will come back to these, give you examples and some nuances on how you should do this, but let's go through the complete structure first. So we have the persona and we have the problem that they face. I find it very instructive today.Then on the third point of your hypothesis is to define the current alternative, the current solution that they have to trying to solve this problem. And then the fourth part will be what we are [00:06:00] going to propose. What is our value proposition to that customer who are currently doing it a way, hopefully that way sucks.We've got a much better way of doing it while our opportunity. And the last part, the fifth part is defining what we'll observe in terms of success metrics. Again, it should be specific. It should be relevant to this type of product. Okay. So we define a persona, a problem that they face current alternative, our value proposition and then success metrics.So let me hit you with an example of that and we'll break down how you actually validate some of those particular testable items. So I'm just going to come up with an idea of like a lemonade stand and I'll explain it through that metaphor. So here we go. I'll read it all to your first and then we'll break it down.We believe families are [00:07:00] thirsty when they come to the beach on a summer weekend. Right now they can only get coffee from a cafe. We will offer our refreshing artismal lemonade from our drink track. We expect to sell 500 units per day. That's it? That's the lean hypothesis, but what you will notice is.Episona is families. Okay. We've even qualified that they have a certain problem in particular on hot  weekend, summer days. And right now there's only a cafe offering hot coffee. Okay. Sounds like there's a big opportunity here. So we think that not only are we going to offer a refreshing drink, it's going to be specifically lemonade.And I even threw in the autism. And will not only  go beyond that. We'll say that it's going to be from a big drink truck. We're not going to go for a fixed store. And lastly, we've nominated 500 units. Now, each of these are testable items. You [00:08:00] could do quantum call surveys and interviews to determine where the families are.In fact, the best segment persona. Is it weekends? Is it summer or testable? Now we say that the current alternative is getting coffee from a cafe. Well, what you would do is you go onsite, do surveys, do some observation to make sure that is in fact, the case, because you would want to go down there on the weekend and just check that there's not an ice cream truck.That also has refreshments. So now you're starting to see each of these needs to be validated. Okay. Artismal lemonade from a drink truck. Well, what you might do is you might go down there with just a hundred units. From the back of the van and try and sell those. Can you sell regular lemonade or does it have to be artisinal do you, can you use a drink truck or maybe you use a trolley or a car who knows all [00:09:00] of these things can be tested through prototyping.And lastly, we predict 500 units per day. Well, is that realistic? Is there 500 people? 500 families in this case, even at the beach that day, the point here is this hypothesis is extremely clear in what we hope the product or service or business to do. And what's so great about it is it's specific and then testable.So you can use all sorts of yeah.Customer interviews, prototyping. Pilot projects to test this before you actually build your big drink truck before you build the factory for autism lemonade. And as you can see that. It's very likely that you'll get different results. You might need to change it from families to young couples. You might need to change it from artisinal lemonade to Coca-Cola.The point here is that I come [00:10:00] back to the lean hypothesis time. After time, I recently did the huge pot project for a global beverage manufacturer and at the heart of the practice for months and months. We continue to iterate and refine the lean hypothesis. This was the way we could all rally around essential idea.So hop over to bottom-up dot IO, where you will find everything you need. About the lean hypothesis. We've got a great master class on that. And what I encourage you to do is to explore all the other free courses that we have there too on design thinking and agile and so much more. All right. That's it for the bottom-up skills podcast, that's a wrap.