The First Product I Built Was An Utter Disaster

I was a product manager at Alltel and we had this great (and very risky) idea for a new product. 

Deep down in my gut I knew that if we built it, the customers would follow.  It was innovative (disruptive) enough that it would change the game.  

So after much internal cajoling (ahem – gaining alignment) we built it. We secured the funding, built the team, marketed the heck out of it, and eventually launched it.

Only to find out that no one showed up. Our customers did not want the product. There was no product market fit.

What Hurt The Most Was Not That We Failed. But That We Failed Big

By big, I dont mean that only a fraction of the projected users showed up. Or that many of them left after signing up.

Yes that was embarrassing.

But what really hurt was that,

1. We spent several million dollars chasing a dream that the customers did not value
2. Wasted 18 months of our life developing it, and
3. (The worse of it) It hurt our own personal reputation in the organization

My Story Is Not Unique. We Have All Been Burned By A Risky Product Idea In The Past

I am not alone. I am not the only one who has had to live through this experience.

We have all had similar experiences. Where we have fallen in love with an innovative idea. Spent precious time, money and energy building it. 

Only to find out that the idea had no legs. And that the risk cost us not only time and money, but also our personal credibility.

So What Do Most Of Use End Up Doing The Next Time An Innovative Idea Crosses Our Desk?

We dumb it down. We make it less risky.

Instead of the big new products we focus on product extensions. Tweaking around the edges. 

We build what we know the organization can deliver. Not what the customer or market is demanding.  

We become timid. Instead of innovating we cut costs and optimize.

The Problem With This Approach Is That We Know How This Movie Ends – We Stop Innovating

As we take on less and less risk.  We lose the capability to innovate. 

Eventually we stop innovating.  

And as new digital competitors rise. We are unable to keep up and find ourselves in a Netflix vs. BlockBuster moment.   

To Avoid This Slow Demise, Google Does The Opposite. It Embraces Failure.

Google knows that when it comes to new product ideas, most will fail. Even Google is not immune to the First Rule Od Building A Product – where 90% of ideas fail.

And if failure is inevitable – then the only real choice you have is when and how to fail.

At Google, that means failing small, cheap, and fast.

If Google had a secret sauce, this would be it.  This is what sets them apart from everyone else.  This is why they can be so much more innovative. 

Google Has Built Its Product Development Process Around Failing Small, Cheap, And Fast

When Google has a crazy idea, they don’t rush out to build the product. They first run experiments.

The goal here is to qualify / disqualify the idea as quickly and cheaply as possible.

Not by using traditional methods – such as business case, executive “gut”, market research, or (worse) building the product first.

But by going directly to the users, showing them a rough sketch of the idea, and then monitoring their reactions.

Here Is How It Works

While there is no one way to run experiments. Googlers are a rebellious bunch.

But in general, product teams follow the below process:

1. Identify the riskiest assumption. Focusing not on killer features but the top 3 – 5 assumptions that need to be true in order for the product to be successful.
2. Create tests to validate these assumptions. Tests can range from building prototypes, A/B testing, administering surveys, to utilizing fake doors.
3. Use Data To Decide What To Do Next. Collect data from users first hand. And then leveraging that data to make an informed decision to build, pivot, or kill the idea.

This Allows Them To Innovate Without Taking On Too Much Risk

This allows them to not only try out the most riskiest idea without wasting too much money and time.

But also try out as many crazy ideas as possible. Both quickly and with the same amount of resources and budget.  

All without taking on too much personal and organizational risk.

Gmail Is A Great Example Of Using Experiments To Build A Product

When Google decided to develop an email product, they were not sure that it was going to be a big hit.  Back then, an email service provided by an online search engine was risky.   

So instead of setting aside a big budget, mobilizing a team of engineers, and begin coding. They ran experiments to gauge customer interest.   

The first experiment was to determine if users wanted a powerful search for their email. The creator – Paul Buchheit – built a rudimentary prototype based on reusable code.  

It ran on a single old server and searched only his email.  After multiple iterations and user feedback, he finally received positive responses.

Thus, Gmail was born.

The next experiment was to determine the right interface.  To test this out, the team built three different designs.  And settled on the look that’s still very much recognizable in today’s version of Gmail.  

Similar experiments were run for every new notable feature – such as 1 GB storage, lightning fast response, and filters.  All were a result of direct feedback on the prototype.  

Even when the product was launched to the public, it was available as beta. It ran on 300 old Pentium III computers that nobody wanted, and was built by a team of just 12 engineers.  You can read the full story here.

At every step, Google choose to not take big risk. Instead they opted for identifying the biggest risk, ran experiments, and let the feedback guide their decisions.  

Google Is Not The Only One That Subscribes To This Approach

Almost every digital champion – from the large tech. giants to start ups – leverage this approach.

It is the main reason why each one of them can innovate at such a rapid pace. They all have embraced failure. Made it part of their core operating process and cultural DNA.

To read more examples of failing small, cheap, and fast check out – Zappos, Drop Box, Groupon, AirBnB, and Buffer.

So How Do You Get Your Teams To Embrace This Approach

The hardest part about moving from a traditional risk averse to a dynamic fail fast culture is – Mindset.

Get this right, and the rest – process, operating model, tools, adoption etc. – becomes much easier.  

So how do you go about doing it? 

Step 1:  Start Small To Prove That It Can Be Done

Start with up to 2 of your most forward thinking product teams.  

Ask them to,

1. Identify the most riskiest assumptions.
2. Brainstorm how they can test these assumptions. Leverage prototypes, fake door tests, websites, pitch decks etc.
3. Develop a test plan.  As a litmus test make sure whatever you decide to do is small, quick, and cheap.  Check out this sample plan from the Quibi case study.
4. Run the tests / experiments.  In my experience 3 – 5 iterations is good enough.  Anything after that and you get diminishing returns.
5. Decide on next product development steps (pivot, iterate, or scale) based on the results of the experiments

For examples check out the recently published AT&T or Quibi case study.  

As for your role as a leader, there is a fair amount of heavy lifting involved there as well. Your team will look to you for guidance and support.

Step 2: Expand & Reinforce 

After you have had some early success. Build momentum by expanding to more teams. 

As a rule of thumb, you want to do it 3 – 5 teams at a time. Do too many and it is hard to keep an eye on it. Do too few and it will feel like a one off.

By expanding and reinforcing what you are doing is codifying the new ways of working. 

The goal is to change hearts and minds. Turn it into a habit. And ultimately move towards a culture that embraces failure.  

Step 3:  Consider Structural Changes

Sooner or later you will reach a tipping point. Usually when 40% – 50% of your teams become comfortable with new ways.

This is the time to make structural changes. Including changes to the operating model, technology, hiring, promotion etc.

By now, many of the team members will be screaming for change. And for you the changes wont seem too risky. Since you know that it already works.

If You Need It, Get Help

If this sounds a bit daunting, dont fret.

Consider embedding an interim product manager in your teams. These experts can help guide you and your team as they learn how to fail small, cheap, and fast.

These product managers are hard to find, but they are worth their weight in gold.

Happy Building!!