The following is excerpted from “The Right It: Why So Many Ideas Fail and How to Make Sure Yours Succeed.” Copyright © 2019 by Alberto Savoia. Reprinted with permission from HarperOne, an imprint of HarperCollinsPublishers.
The Fake Door Pretotype
The name for the Fake Door pretotype comes to us courtesy of Jess Lee, who at the time was CEO and cofounder of community-based shopping site, Polyvore. Thanks, Jess!
The basic concept behind the Fake Door pretotype is that you can get some data on how many people would be interested in your idea by putting up a front door (e.g., an ad, a website, a brochure, a physical storefront) to help you pretend that the product or service exists when, in fact, you have nothing to offer quite yet. If you can’t get enough people to knock on your product’s front door (i.e., to show interest in your idea), then you go back to the drawing board and review your ideas and your hypotheses.
Early in his legendary and influential career, Kevin Kelly, bestselling author and founder of “Wired” magazine, used this approach to test the market for his first business idea, a catalog of budget travel guides.
This is how Kelly describes it in Tim Ferriss’s book “Tribe of Mentors”:
“I started my first business with $200. I bought an ad in the back of ‘Rolling Stone’ magazine advertising a catalog of budget travel guides for $1. Neither the catalog nor the book inventory existed. If I hadn’t gotten enough orders, I would have returned the money [from any order], but it all worked out by bootstrapping.”[1]
Ads in the back of magazines seem so quaint these days, but this happened in the early 1980s when those relatively cheap ads were one of the few ways a small-time entrepreneur could reach a target audience.
Related: Wired Magazine Co-Founder Talks Major Artificial Intelligence Breakthroughs
Example: Antonia’s Antique Bookstore
Imagine that, on a bleak December day, you are wandering weak and weary on a busy downtown street, when you walk by a door with a sign that announces the opening of a new antique bookstore.
As a book lover, you can hardly contain your delight. With visions of volumes of forgotten lore—perhaps a first edition from one of your favorite authors, Edgar Allan Poe—you gently rap on the door: knock-knock.
No answer. You knock again. Still no answer. You knock a third time. Nothing. No telltale sign of anyone behind that door. “The owner must be napping or perhaps can’t hear my tapping,” you say to yourself and, a bit disappointed, you walk away.
Without realizing it, you’ve just taken part in a Fake Door pretotype and provided Antonia with a valuable morsel of YODA (Your Own DAta, or data about your own product idea, collected firsthand by you and your own team, by running experiments you designed to validate your own market hypotheses).
You see, Antonia is seriously thinking of quitting her job as a book editor and opening an antique bookstore in that neighborhood, but at this time there isn’t a single book for sale behind that door—let alone a full bookstore.
In fact, there’s nothing behind that door but a vacant piece of real estate. Antonia doesn’t have a lot of money to spend on traditional market research for her bookstore, but her Market Engagement Hypothesis is that if she opens the store on the right street and advertises it with a big sign, a lot of people will discover it as they walk by, and after that word-of-mouth marketing will do the rest.
For this plan to work, she determines that she needs at least 0.5 percent of people (1 in 200) who pass by each day to show enough interest to visit the store at least once. Before investing some serious capital to lease a space, buy inventory, hire staff, and so on, she wants to validate that hypothesis. So she invests $20 to make a sign, $2 on double-sided tape, and a few hours of her time testing the sign at various streets and locations that she believes will have the right kind of pedestrian traffic (i.e., a decent percentage of bookworms). After taping up her signage, she sits across the street with a notebook and keeps track of:
- How many people pass by the door
- How many of those people notice the sign
- How many of them stop and knock
- How many times they knock (the more they knock, the more interested they must be)
- The age, gender, and other relevant characteristics of each knocker (e.g., middle-aged well-dressed male professional; female college student)
She runs her experiment on both weekdays and weekends to see if and how the amount and composition of the pedestrian traffic changes.
After a few days, Antonia has collected a lot of great YODA. Unfortunately, the data doesn’t support her market hypothesis—not even close. At one location she counted a grand total of three people knocking out of 4,000 people passing by (that’s less than 0.1 percent of the foot traffic). In another, she counted over 5,000 people and not a single knock.
Antonia is disappointed in the result, but she is also relieved that she was able to collect this data and test her market hypothesis so quickly, with very little money—and without leaving her job. Pretotyping saved her from a potentially disastrous business decision.
Does this mean that Antonia should give up on her bookstore idea? No, not at this point. But it does mean that she cannot count on just a door sign to get people into the store—she needs to revise her Market Engagement Hypothesis, or MEH, and she may have to adjust her plan to include some advertising budget, at least at first. She also begins to wonder if, as much as she likes the idea of a physical bookstore, perhaps her idea for selling antique books would work better online. The Fake Door pretotype proved quick and effective in the real world, so she wonders if she can use it online.
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The Façade Pretotype
The Facade pretotype differs from the Fake Door in one important respect—when potential customers knock on that door or click that “Buy” button, someone answers and something happens. They may even get precisely what they were looking for. Let me illustrate this technique with a great example.
Example: Antonia’s Antique Bookstore Revisited
We’ve already seen how Antonia pretotyped her bookstore using a Fake Door with a minimal investment of time and money. Had she been willing to invest a bit more in exchange for learning a bit more about her market and customers, a Facade pretotype would have served her well.
Instead of simply putting a sign on the door of some vacant building or store, she could make arrangements to rent the space behind that door for just a few days and put a desk in front of a couple of bookcases filled with books she already owns. When people knock and come in the store, she explains that she’s still working on her book inventory. But if the customers already have an idea of the kind of books they are interested in, she’d be happy to help them find those books. Here’s how such an interaction might go.
A potential customer opens the door expecting rows of bookshelves stuffed with thousands of books and is surprised to see just a couple of bookcases and a desk where Antonia is working on a computer.
“Oops, sorry. I thought this was a bookstore,” says the customer.
“Oh, but it is,” answers Antonia with a beaming smile. “Or it will be, once all my inventory arrives.”
After getting out from behind her desk and shaking hands with the still slightly confused potential customer, she explains: “My name is Antonia. I’m just getting started, testing the waters and the neighborhood, so to speak. But I can already help you. Are you looking for any specific books?”
“Actually, I am very interested in Stoic philosophy and wanted to see if you had any interesting or unusual books on that subject for my collection.”
“Ah, yes, the Stoics. I believe a beautiful leather-bound nineteenth-century translation of Marcus Aurelius’s ‘Meditations’ is available. It’s not cheap though, about $200. Would you like me to look it up and order it for you? Or are you looking for something a bit less expensive?”
“Sure, if it’s not too much trouble. I don’t mind spending that much if the book is worth it.”
“No trouble at all. By the way, while the computer searches for it, may I ask you—book lover to book lover—about your book collection . . .”
As you can see, with a Facade pretotype, Antonia will be able to capture much more data than just how many people knock on the door. She can get an idea of the type of people who would come into the bookstore, the kind of books they’d be looking for, and the price range with which they would be comfortable.
“The Right It: Why So Many Ideas Fail and How to Make Sure Yours Succeed” is available now at fine booksellers and can be purchased via StartupNation.com.
[1] Tim Ferriss, Tribe of Mentors: Short Life Advice from the Best in the World (New York: Houghton Mifflin Harcourt, 2017), p. 249.
