I have always enjoyed and repeated the following story (note: it may apocryphal, but that’s fine for our purposes): A major bank wanted to test the concept of what is now known as the ATM machine. Instead of spending time and money to build a fully-functioning prototype, it instead punched a hole in its wall, made a dummy machine and placed a human behind the facade. This person, completely hidden inside, saw what the user was typing, took the card and dispensed the money and receipt. The user was none the wiser and the bank was able to test its concept without spending a fortune on development.
This story has informed my approach to product development and prototyping. The customer left never knowing the “automated” teller machine was actually a guy named Bill. For all I know there is a “Bill” stuffed inside every ATM machine out there, but ultimately it doesn’t matter to me. And it doesn’t matter to your user base. Technology rarely matters to the consumer – it’s all about the experience and functionality.
When dealing with digital products, many obstacles don’t apply: there is no facade to build, no wall to knock out, and no “Bill” to pay to sit behind the wall waiting to take and dispense customers’ money. That said, digital development is not without its challenges.
As digital products are perceived to be easier to develop and release, I continually see companies decide to “do it right” from the get-go: to build out a complete prototype of their product. I think “doing it right” from the get-go is wrong for the following reasons:
• It delays a true market proof of concept. Let your users tell you what they want.
• It can be more expensive. Bill, a dummy machine, and a hole in your wall are still substantially less than the engineering for an ATM. Spend 20 percent of your budget to get 80 percent of the backend, which will create 95 percent of the user experience, and then see what happens.
• It creates a sticky legacy. In the worst case you end up dressing up for the wrong party. The nicer you dress and more time you spend doing your hair, the harder it is to change your outfit even though you’ve arrived at a beach party wearing a tux.
Quickly proving concepts in the marketplace is key. It must be done in a way that does not sacrifice user experience, but it is definitely a time to apply Pareto’s principle (for many events, roughly 80 percent of the effects come from 20 percent of the causes). Many times the bigger the company, the greater the resources, the greater the ability to indulge in doing it “exactly right.”
Digital Age BC (Internet Bubble time) was all about getting big fast with excessive burn rates and revenue obsession at any cost. This wasn’t sustainable. Digital Age AD, rather, is more about cost. Cost side focus is not simply for the Sam Walton’s of the world who worry about recycling paperclips. Cost side focus forces creativity and efficiency, getting your product launched faster, smarter, and without the slow, painful finish — the remaining 20 percent of the product, which takes 80 percent of your time.
Though sunk costs are just that, the more we spend, the harder it is to back away from something that doesn’t ultimately work. Don’t get me wrong; grossly underfunded projects starve. But grossly overfunded projects tend to … well … you get the picture.
—Jon Fetzer is a serial entreprenuer based in Denver, Colo. and has founded a number of companies including MuseumStoreCompany.com and ScanGo.com
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