228. Why Smart Leaders Prototype First, Strategise Later

If you think product development comes after business strategy, you're leaving money on the table and falling behind your competitors. Don’t do that.

In this episode, you'll learn why smart business leaders are using prototypes as a strategic weapon - so you can do it too.

You'll learn:

• Why your 50-page strategy doc is worth less than a tested napkin sketch
• How your "small" idea might actually be a golden goose in disguise
• The real reason PowerPoint presentations don't get funding (spoiler: they're boring)
• Why waiting for the perfect strategy is like waiting to get in shape before going to the gym 🤷‍♀️

Perfect for corporate innovators who are tired of death by PowerPoint and non-technical founders who think they need to write War and Peace before building anything.

Warning: This episode contains dangerous levels of common sense and might cause sudden urges to actually build something.

Timestamps 

00:00 Introduction

01:07 Prototyping as a Strategic Weapon

02:47 Importance of User Feedback

06:08 Investment Risk and Prototyping

09:03 Prototypes in Marketing and Team Building

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Transcript 

Sophia Matveeva (00:00.332)
If you think that product development comes after business strategy, you are leaving money on the table and falling behind your competitors. So don't do that. In this episode, I'll show you why smart business leaders are using prototypes as a strategic weapon so you can do it too.

Sophia Matveeva (00:22.168)
the Tech for non-techies podcast. I'm your host, tech entrepreneur, executive coach at Chicago Booth MBA, Safiya Matil. My aim here is to help you have a great career in the digital age. In a time when even your coffee shop has an app, you simply have to speak tech. On this podcast, I share core technology concepts, help you relate them to business outcomes, and most importantly,

Share practical advice on what you can do to become a digital leader today. If you want to a great career in the digital age, this podcast is for you. Hello, smart people. How are you today? You know, I have just moved into a new apartment building which has its own beach in Bahrain and it is fabulous. How I'm going to face London after this, I just do not know.

Anyway, on a work note, I have just finished teaching the first cohort of the Tech for Non-Technical Founders course here. And there is a pattern that I've noticed amongst my students that I thought would be useful to share with you. So in this particular version of the course, every participant has to make an early version of their product and then they have to test it with the market. And so some people build their prototypes using AI. And if you're interested in that, then listen to last week's episode.

Other people used Figma for prototyping and yet others created their test products using NoCo tools. And now there are so many really simple tools, which are either free or really cheap that help you create a test version of an app or a website that really, if you've got an idea for something, there's really no excuse not to create a basic test product. And then something interesting happened when the founders took their test products

to potential customers because everybody got a new idea for their venture as a result. So some people ended up pivoting completely. So some people totally pivoted from their original plan. Others came up with features that they couldn't have imagined before, and yet others found new market segments. there's this one guy who has a fintech idea and he has a pretty clear idea of his target customer. And then...

Sophia Matveeva (02:47.126)
What's interesting is that when he took his prototype to his target users and asked them for their feedback, he found out that actually there are three customer types that really want and need this product. So his potential market share is actually much bigger than he originally thought, which is really exciting, right? And so today I want to tell you why making a prototype or a test product is not just a technical task.

it is a crucial part of your business strategy. And also I don't want you to think of getting user feedback basically as something really negative where you create something and then people just criticize it and you just have to take their criticisms and kind of smile and then go and iterate and make it better. Obviously that does happen and you have to do it because we do have to tailor the stuff that we're doing to our customers. However, from prototype testing,

Not only do you get feedback, you also have new ideas and new avenues and new potential. So it's not just this thing that you have to grin and bear through. It actually could help you make a lot more money. So today I want to tell you why making a prototype or a test product is not just a technical task. It's a crucial part of your business strategy. And if you're a corporate innovator or a founder, you might think of your job as coming up with a perfect strategy.

then getting it approved, and then handing it over to the tech team to build. That is not the right way to do it, so don't do it. Whether you're making the test product yourself or whether somebody is doing it for you like a UX designer, you have to be really closely involved if it is your vision, because you have to direct which features go into your test product, because those are the ones that you're going to test. And you also have to be there when users give you feedback.

And you have to do it in person. either in real life, you're literally sitting next to them, or at least you are online. At least you're on a Zoom call. Basically, just don't create an app mockup and send it to people and then ask them to fill in a survey because that's not how you're going to get good results. Instead, create a test product, then ask your customers for feedback in person or online, basically where you can see them interacting, where you can see them.

Sophia Matveeva (05:09.524)
reacting as well, when you can kind of feel their emotion. Because this is how you're going to get those unexpected market insights, which you not only need for your product, but for your business strategy, i.e. for making money. So here's why prototyping and user testing need to be part of your strategic planning. Number one, you can do all of the market research in the world, but literally nothing beats putting something in front of real users and seeing their reactions.

because when people can actually click and touch and use your product, even if it's basic, even if it's not symmetrical, even if it doesn't look great, then people can give you insight that you just wouldn't get from a PowerPoint presentation. And this feedback might completely change your direction. And this is much cheaper to do. So pivoting is much cheaper to do when you've only built a prototype rather than a full coded product. And from a strategy point of view for all the MBAs here,

From a strategy point of view, this gives you competitive advantage because when your competitors are still writing strategy documents, you could be in the market learning from real users and improving your business strategy and your product. Two for one. Isn't that amazing? So even a basic product that solves one problem well is better than a perfect product that's still on the drawing board. So make something, test it with people. So number two, why is it a good thing to do?

Well, let's talk about investment risk. So this is for the investors and all the people who are trying to get money out of people. So basically, I guess that's everybody. Well, whether you're asking your corporate board for a budget or pitching to VCs, prototypes de-risk your project. Because it's one thing to say, okay, I think people are going to really love this because we've seen the demographic trend. That's frankly, not very convincing. You know what is convincing? Saying...

Look, here's what we've built. Here's our user feedback and here's what we're going to do next. And this is why we need your money. I have seen several of my students get funded literally like this. I've seen some of my students get funded because they had something tangible to show and that tangible thing allowed them to say, okay, and now we have a plan. And you know what? In fact, I raised my first round of funding for my last company after I built a prototype.

Sophia Matveeva (07:36.962)
So, think of your prototype also as a fundraising tool and a business strategy tool. It just keeps getting better. Are you with me? Come on, let's do this. Okay. Number three, having a prototype means that your team can be more effective and help you in ways that you didn't expect. Now this is interesting. So if you're in a corporate, you might have a legal team. And if you share them a prototype, they could notice compliance problems and

Everybody hates compliance problems. I totally get you. But it is better that they notice at prototype stage so you can do something about it than when you're just about to release your thing and then legal says no. That would be horrible. Also, if you have a prototype, marketing might see messaging opportunities and sales might spot features that clients would pay extra for. Wouldn't that be nice? And you want to get these insights before you have invested in full development because

Again, if you release something and it's ready and then sales say, but there's another feature that we know our customers would really love and we could make more money, it's just going to take you time and money to create it. So this is why I want you to see your prototype as an important step in your business strategy and not something that only the techies do, which is why I am so passionate about teaching this at business schools, because I think at business schools, strategy

is just too divorced from product development, but really, they should be actually part of the same thing. reason number four for why smart leaders prototype first and strategize later. Well, prototypes are fantastic for marketing and sales because you can start building buzz, you can create waiting lists, and you can even pre-sell to your super keen early adopters if you have an app design or a test product.

And that's because basically it's much easier to create marketing content for your marketing team when you've got something real. And even if the idea is yours and you are the marketing team, actually having a visual is going to stimulate your thinking and is going to help you tell the story so much better. And finally, and this one is crucial for both corporate innovators and founders, prototypes help you attract a team because prototypes

Sophia Matveeva (10:02.716)
make your idea look real. Because basically people want to work on real things and not on endless planning documents. And also everybody kind of knows that there are lots of people in corporates and founders alike walking around with ideas and most of them just don't do anything about it for whatever reason. So if you're actually on your way to creating a test product,

You stand out from the crowd because your thing looks tangible, it looks like you're moving forward. And having something tangible attracts talent because you look serious. You look like you're actually going to create something and not just talk about it. So here is what I want you to remember from today, my dear smart person. Stop thinking of prototypes and strategy as being two separate things because prototyping is a fundamental strategy tool.

And if you are still at business school, tell your strategy class this, surprise your professor with your insight. So what do you need to do? Start simple, get it in front of users and let their feedback guide your next moves because that's how successful tech products and successful tech businesses are really built. So if you haven't yet listened to the previous episode on how to create a test product or a prototype using AI, then go and do that. literally.

If you listen to last week's episode and listen to this week's episode, you will have insight on how to build your first product and how to use it for your business strategy. Yes, you are welcome. So that's it for today's episode. If you found this helpful, then make sure that you're a subscriber to Tech Fun on Techies. And if you're already a subscriber, then make sure to leave the show a rating and a review because honestly, if you do that, it would really help me.

because if you leave a rating and a review, then the algorithm finds out and then essentially it promotes the show to other people like you. And that helps spread my work and that would be really wonderful of you. So thank you in advance for leaving a five star rating and a review. And on that note, have a wonderful day and I'll be back in your delightful smart ears with more free education next week. Ciao.