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Antti
Tarvainen

2 / 12 / 2011

3 Comments 

Answer the Right Questions with Prototypes

Prototypes validate ideas. Rather than basing plans on guesses, you create something concrete and put it to the test. But what kind of a test? That depends on whether you are aiming for a sustaining or a disruptive innovation. The distinction helps us ask the right questions and build the right prototype. As a consequence we eliminate waste and create an effective innovation process.

Sustaining and disruptive innovation

The division of innovation into sustaining or disruptive types comes from Clayton Christensen and his book The Innovator’s Dilemma. In brief, the theory states that incumbent companies constantly build better versions of their existing products. They become experts at serving their core customer base, but are not quite as good at serving new markets. This is called sustaining innovation.

Incumbents are vulnerable to disruptive innovation that can occur when someone else comes up with a whole new value proposal. The new product may be worse in many respects than the incumbent products, but it more directly addresses the needs of its market. Because the makers of the existing products see the market differently, they may not even consider the disruptor a serious competitor at first.

The difference between sustaining and disruptive innovation, thus, relates to the product’s value proposal. In sustaining innovation, the values are the same as those pertaining to the existing products. Disruptive innovation, on the other hand, uncovers a whole new set of values.

A textbook example is how the iPhone became the leading smart phone. Before iPhone, in 2007, smart phones had a rather small market. The most important and valuable features of smart phones were ordinary phone features, along with the ability to write emails and use a calendar. When the iPhone arrived, it was worse than the incumbents in many ways: it had poor sound quality, it dropped calls, it lacked 3G, it didn’t have a physical keyboard, and it was very expensive. So, to the core group of techno-savvy business users, it was not nearly as attractive as the other choices. However, it had certain benefits that made it attractive beyond the traditional core group. It had a user interface that was a delight to use, it acted as an iPod, and it had the best web browser on the market. It was a new kind of smart phone for a new kind of user.

Both disruptive and sustaining innovations have their place. Markets and competition are marked by short bursts of disruptive innovation, followed by long stretches of sustaining innovation before the next disruption. After the disruption in 2007, the smart phone industry has seen four years of sustaining innovation. Practically all current smart phones now look like iPhones, and they are all better than the original iPhone. The competition is about who has the best features and the best specs; that is, who can generate sustaining innovation.

Coming back to our subject, when we create a prototype, the distinction between sustaining and disruptive innovation is important to us. We should know why we are doing it, and what questions need to be answered. This depends heavily on whether our innovation is sustaining or disruptive.

The questions in disruptive innovation

When creating something disruptive, everything is uncertain. We have an idea for a new kind of service or a new kind of customer that we are going to reach with our product. Yet, we don’t know for sure whether the targeted customer has any desire for what we are planning. So, we want to make sure that a market exists for our product.

Examples of questions to ask at this point:

• Would anyone use our product?
• Would anyone pay for our product?
• Would the use of this particular product spread among customers? Would there be enough growth to sustain our business?
• If not this product, then what would make users happy?

Often, the best way to answer these questions is to build a prototype, show it to potential customers, ask the right questions, and listen to their feedback.

Qualitative feedback may be all that is required. You meet a few potential users, and see how they react. The caveat, of course, is that the use of the product during these interviews is not the same as real use. The consumers whose feedback is being solicited may feel the urge to please the interviewer with their answers, so their responses cannot be blindly trusted. Interviewing users is a skill all on its own.

It would be better to obtain quantitative feedback as well. Depending on the target market, it might be a good idea to put the prototype out into the world, market it to potential users (e.g. via search engine text ads), and see how many sign up. This produces a concrete metric for the degree of interest in one’s customer base.

The questions in sustaining innovation

Sustaining innovation is different. You already know the customers and what they value. You want to improve the product you have, or enter the market with a product that is essentially the same as that of the competition, only better in some respects. In any case, you already know two things: what you are comparing your product against, and what aspects you want to improve.

Prototyping has a place in this sort of innovation, too. The improved version has not been built before, and you are unsure whether it performs as well as expected. This uncertainty can be reduced by asking the right questions and then answering them with a prototype.

Some questions you may ask at this point include:

• Would this improvement produce the efficiency benefits that we thought it would?
• Would users choose our product over the competition’s product, based on this feature?
• How often would they use this new feature?

The questions depend very much on the type of improvement at which one is aiming. If a new feature is being created, the questions relate to the use of the feature and its benefits. On the other hand, if you seek to improve the production process, the questions relate more to efficiency, and so on.

Quantitative metrics should be used when answering these questions. For example, with regard to process improvement, you could measure the difference in the use of resources (such as time) compared to the original version. When planning a new feature, an alpha version of the feature could be released to a set of customers in order to assess how they use it.

Qualitative metrics have their use here, too. It may be expensive to build a sufficiently-good prototype to answer questions quantitatively at first. In that case, the qualitative questions should be posed first to decide whether it makes sense to continue along the current path, or to make changes. Then, a better prototype can be built to measure things quantitatively.

Eliminate waste

One way to look at prototyping is that it eliminates waste from the innovation process. At the start of innovation, the most important result of one’s work is information: i.e., whether the current idea works, and whether it can be improved. So, what creates accurate and relevant information is valuable; what does not, is waste.

Instead of paying, and waiting, for an entire product to be completed, the construction of a prototype will help you to answer the questions quickly and effectively. However, it is not enough to build just any prototype. Ask the right questions, and you will eliminate a huge amount of waste. It is important to know whether your innovation is sustaining or disruptive. The questions are different, and the prototype will differ accordingly.

The division between sustaining and disruptive innovation is just one factor that can alter the questions to be answered. It takes skill and experience to know what the right questions are, and to build a prototype that best addresses those questions. We can help you.

3 Responses to “Answer the Right Questions with Prototypes”

1. 
   PM Hut December 2, 2011
   10:55 am

   Hi Antti,

   About the elimination of waste, I don’t think you really are “eliminating” waste, you’re just reducing it. The question is, how far would you go with a prototype before saying that it will or won’t work?

   I did publish a post discussing the importance of prototyping (see top two factors that tank many IT projects), but I still think that a prototype is waste.
2. 
   Antti Tarvainen December 19, 2011
   9:33 am

   Hi!

   Thanks for your reply, and sorry for not answering earlier — for some reason I only got a notification of it in my mail today.

   Regarding waste you are correct, of course. All waste can never be eliminated completely, just reduced. The other way of looking at the words is that we can eliminate some part of the waste, while leaving the rest untouched. It is semantics — I think I and you mean the same thing.

   I enjoyed the article you linked to. I think I have a somewhat different kind of a prototype in my mind from yours — in this article I am talking about validating the business case, while the prototypes in your article are about validating the technology choices. Both of them have their place. I don’t know if the difference matters in this conversation, but I wanted to point it out.

   How much prototyping is enough? Depends on the case. You can never be entirely sure that the choices you make will work. Prototype can only reduce uncertainty, never eliminate it. On abstract level, there is a certain value to information, and you want to maximize the output you get from your attempts to uncover it. On practical level, you will mostly make these choices by intuition, but if you want to get technical, there are ways to do it too. One book that might be helpful here is http://www.amazon.com/How-Measure-Anything-Intangibles-Business/dp/0470110120 .