Hypothesize, Rinse, Repeat…
Note on hypothesis driven development
Product innovation is a consequence of an identified customer pain point. Conversion of customer pain points into a product roadmap and subsequently into the feature backlog is central to product management. Identification of customer pain points results in a set of outcomes which in turn drives feature roadmap. This is an inbound approach, where customers are the primary drivers of product definition.
“Some people say, “Give the customers what they want.” But that’s not my approach. Our job is to figure out what they’re going to want before they do.”
-Steve Jobs
Contrary to an inbound product development approach, many a times an outbound product development approach is required. The need for such an outbound approach is triggered by situations like organizational change, strategizing for new market opportunities, digital transformation, improving operational efficiency etc.. These changes are often a catalyst for organically grown product ideas. A product development that starts off with an assumption about a customer pain point is called as hypothesis driven development.
The process of hypothesis driven development begins by postulating a hypothesis around customer pain point. This hypothesis is likely to be a business use case that answers the ‘what’ aspect of product definition, it says nothing about the ‘how’ and ‘when’ aspects. The hypothesis driven development is a two step, rinse and repeat approach:
- Rapid prototyping
- At each iteration use data driven metrics to validate the success criteria of the hypothesis
Both these strategies ultimately transforms the hypothesis into a rich and quantifiable customer experience.
As an example, for an e-commerce platform, a simple hypothesis can be — ‘we need to provide our customers with a personalized item search as it will improve the user engagement with the platform and ultimately increase the number of returning customers to the e-commerce platform’. This hypothesis then can be further decomposed into product features. A measurement criteria for the success of the hypothesis can be an increase in percentage of return customers. The iteration of product development then consists of rapid prototyping, user validation followed by customer feedback loop into product development and the rinse and repeat continues until data driven metrics validate the hypothesis. Due to its fail fast nature, hypothesis driven development also lends itself to lean startup model.
As a general rule for a mature and established product an outcome driven product management serves better, while a hypothesis driven development approach lends itself well for organizations with a rapidly evolving customer/business strategy or undergoing some sort of organizational change. Thus, a hypothesis driven development is a powerful concept that drives innovation and fosters organically developed ideas.
