Prototyping and Pretotyping are Twin Pillars of Prudence Before Major Financial Decisions

In the rapidly evolving business landscape, staying innovative and adaptable is not just advantageous, it's imperative. Whether you're an entrepreneur embarking on a new venture or a seasoned business looking to pivot your operational focus, the path is laden with uncertainty and risk. However, adopting a meticulous and data-driven approach can significantly pare down these risks. A pivotal part of this approach involves the practices of prototyping and pretotyping, serving as the preliminary filters to gauge the viability and potential success of your venture or new direction. This article delves into how these techniques act as essential buffers, providing a clearer perspective before channeling significant resources or shifting your business unit's trajectory.
November 21, 2023
Rebecca Busk
Commercial Director & Partner

Understanding pretotyping and prototyping: Key to risk mitigation in business ventures

Venturing into a new business idea or shifting the operational focus of a business unit is often a leap of faith taken by entrepreneurs and managers, respectively. However, when these decisions involve significant financial stakes, particularly one's life savings, it is prudent to minimize the associated risks. Two effective methods to ensure the viability of such ventures are prototyping and pretotyping. While they might seem synonymous, they serve distinct purposes in the early stages of product or strategy validation. This post unravels the significance of both practices and how they act as a buffer before making monumental financial or operational decisions.

Pretotyping: Testing the waters before the dive

Pretotyping, a term coined by Alberto Savoia, focuses on validating the market demand for a product or concept before it is fully developed. This technique is particularly crucial when the idea is innovative or unconventional.

Pretotyping allows entrepreneurs to answer the fundamental question: "Are we building the right thing?" before investing heavily in the development phase.

This methodology often involves creating a basic, minimal version of the product idea or a simulated experience of using the product. Tools like mock-ups, simulations, and targeted surveys are used to gauge customer interest and gather valuable feedback. For instance, if you're considering opening a café, you might start by setting up a small pop-up stand in your desired location to assess customer interest and preferences. In 2021 we developed a creative concept and made a site for AkademikerPension to test if it would be possible to make pension interesting to people in their 20's.

More specific, here are som examples:

1. Minimal Viable Product (MVP) Tests: An entrepreneur has an idea for a new app. Instead of developing the entire app, they launch a very basic version (an MVP) to test user interest. This approach provides rapid feedback and reduces the risk and cost of full development if the idea does not resonate.

2. Fake Door Testing: A company considers adding a new service. They set up a button on their website for this service, but when a customer clicks on it, a message appears saying the service is 'coming soon'. The number of clicks provides an indication of customer interest in this new service before it is actually developed.

3. Wizard of Oz Testing: A company plans to introduce an automated customer support chatbot. Before investing in building AI technology, they test the concept by manually responding to customer inquiries as if they were a chatbot. This provides insight into whether customers would accept and use such a service.

Prototyping: Refining the concept

Once you have validated the basic idea and market interest through pretotyping, the next step is prototyping. This phase involves creating a functional, albeit not final, version of the product or service. The goal here is to test how the product works in the real world and refine it based on feedback. Prototyping helps answer the question: "Are we building the thing right?"

The prototype doesn't need to be perfect or feature-complete. It just needs to be sufficient to demonstrate the product’s functionality and potential. For example, if your business idea is a new software application, you might develop a basic version with core features to test with a select group of users.

The interplay between pretotyping and prototyping

The journey from an idea to a successful product or business model often requires a balance between pretotyping and prototyping. Pretotyping helps validate the market need and reduces the risk of building something that nobody wants. Prototyping, on the other hand, ensures that what you're building meets the expectations and needs of your target audience. Kvalifik can help you with pretotyping and prototyping. Read more about our digital innovation service here.

A strategic approach to business innovation

Incorporating pretotyping and prototyping into your decision-making process can be a game-changer. These methodologies not only help in risk mitigation but also ensure that your time, effort, and resources are invested in ideas that have a real chance of success. They are crucial steps in the innovation process, enabling entrepreneurs and managers to make informed, confident decisions about their business ventures.

Remember, the cost of failure in the business world can be high, especially when it involves significant financial commitments. By embracing pretotyping and prototyping, you're not just minimizing risks; you're setting the stage for potential success and sustainable growth.

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