Thread by @FrediVosberg

Would this product create enough value for users in a way that benefits my business?
~ everyone who wants to validate a new product idea

But this questions is quite hard to answer and can cost quite some resources.

Let's break down this journey a little bit 👇

When starting out with a new idea, you might want to test for desirability.

Your hypothesis looks something like this:

I believe the customers are interested in my idea. I know that's true when the conversion rate on my landing page is > 1,5 %.

The problem with quantitative tests: You need to know what conversion rate you can expect and a lot of steps can go wrong:

• You can't acquire enough visitors
• You can't acquire the right visitors
• The copy of your landing page isn't convincing

You can't expect to nail everything in the first step.

This would be nuts.

If you were able to do that, you wouldn't need an experiment mindset.

So it's totally normal, that you'll need to learn first.

To capture your findings you need a traction model.

Disclaimer: Don't start with a quantitative experiment like a landing page test.

Always start with interviews to learn about the goals of the users.

• Do they care?
• How do they evaluate solutions?

This will improve the copy of your landingpage and doesn't cost any $.

So what's a traction model?

Traction is quantitative evidence of customer demand.

That sounds nerdy.

It just means, that you have to model the customer journeys in funnels and loops with numbers.

If you haven't done that before start with the Pirate Metrics.

The Pirate Metrics are named after their initial letters:

• Acquisition: #visitors
• Activation: # of users who experience value
• Revenue: # of paying customers
• Retention: # of customers who stay
• Referral: # of referred customers

AARRR like a pirate.

The next step is to guess the # of customers in each step.

• Model it to be viable.
• How many paying customers do you need?

That doesn't have to be exact. Why? Because your next step is to learn.

If you have no clue, conduct your first experiment and collect a baseline.

Most likely your baseline won't be viable yet.

Your customer acquisition costs are most likely too high.

So the next step is to learn which step of the journey could be improved.

You have 2 options:
• Trial & Error
• Conducting more interviews

Only then you conduct the experiment everybody knows:

I believe changing the value proposition on my landingpage will increase the conversion rate from 0,9% to >1,5%.

But still you aren't invalidating your idea.

You still examine ONE TWEAK to make your traction model viable.

Different levels of experiments:

Model
• Learn about the users goals
• Learn about the customer journey
• Find opportunities on this journey
• Find a bottleneck in your product

Optimize
• Evaluate if you created more value for users in a way that benefits your business?

That's a wrap!

If you enjoyed this thread:

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