Interview: Testing Business Ideas

David Bland is the Founder and CEO of Precoil. He tells us about his new book «Testing Business Ideas» and why you should do things that don’t scale.

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Hi David, you have been an ambassador of the Lean Startup movement for many years. What is it that drives you personally to get up in the morning and perform?

DJB - I remember listening and reading early content from Eric Ries and Steve Blank about ten years ago. I’d been working at a startup that was using Agile, but building stuff that no one cared about. I felt as though we were merely efficiently delivering waste. I thought there had to be a better way. Pulling these principles into customer discovery and testing really resonated with me at the time. Even at the ten-year mark, they still resonate. If we put things into perspective, ten years isn’t a long time to change how people approach their work. I get excited each and every time I’m able to help someone find a way forward to test their ideas.

«We were […] efficiently delivering waste. I thought there had to be a better way.»

You are also the founder and CEO of Precoil. You help companies create a repeatable process for rapidly testing new business ideas. What inspired you to start this company?

DJB - I had been working at the Neo office in San Francisco. Neo had some truly amazing talent. The backing of Eric Ries with other folks like Josh Seiden, Jeff Gothelf and Giff Constable to name a few. We were essentially Lean Startup as a Service, which was very forward thinking at the time. Maybe a little too far ahead of our market, now that I think about it. As Neo was winding down, I thought, why not create my own thing to help people learn how to do this type of work? I really believed that there would be an emerging market for it. It went against all the advice I got from experts. You don’t typically quit your job over Christmas break without a pipeline of work. I happened to find a large corporation that wanted to run experiments over the holidays. They couldn’t find anyone else because they were all on vacation. I happily took the work, tested ideas with teams and after that, found another company that needed help after the New Year. Four years later, I’ve helped teams all around the world test out their ideas. It’s been very enjoyable and challenging. My approach is to teach them how to do it all themselves. I want to eventually moon walk away and make myself obsolete. Well, I don’t really know how to moon walk but it sounds good.

The new secret sauce any Business Designer should know.

You just co-authored the book “Testing Business Ideas” with Alexander Osterwalder. What was the process like?

DJB - It was amazing and the most difficult thing I’ve ever taken on professionally. The way Alex writes is just, wow. It’s hard to explain. I had to get up to speed on conceptually laying out a book without really putting much of the text in right away. I’m a visual thinker and it was still challenging to do. I feel like I didn’t really get the hang of it until we were almost finished with the book a year later. He and I complement each other well. We didn’t have major debates over the principles of the book. It mostly came down to the details of how to communicate it. We both made compromises and tested the book along the way.

A printed book is by nature static. How did you and Alex apply the testing mindset in the creation process of the book?

DJB - I was intimidated by the static nature of a large physical book. I’ve built a following over the years by mostly writing online, but I could always go back and edit things as people were commenting. Their thinking influenced mine and helped me see my own blind spots. With a physical book, it’s a different dynamic with readers. So Alex and I agreed early on that we couldn’t write a book about testing without, you know, testing it. We would share early content with readers. We would test book titles online to see what people thought. We ran user tests and comprehension type tests on the book covers to see if people understood what the book was about. We would synthesize our notes from early readers to see what themes emerged. We created Value Proposition Canvases for each of our reader segments. On my book tour, I give a talk on how we tested the book along the way. Recently, I gave the talk for about 400 people in Florida and then another 350 people in California. I had many folks who were stuck on writing a book come up to me afterwards and thank me. I think the finished product is a result of all the testing we did with readers along the way. We had opinions about how the book should flow, but when it was obvious there were issues, we took a step back and addressed them.

«I’m a big fan of doing things that don’t scale early on.»

You mentioned repeatedly that Minimum Viable Products are optimized for learning, not scaling. What do you mean by that?

DJB - We are obsessed with scaling our ideas for thousands of customers before we even test them with ten. It’s led to some of the biggest product failures we’ve ever seen over the past decade or so. I’m a big fan of doing things that don’t scale early on, so that you can deeply learn about whether your idea is desirable, viable and feasible. So much of what you learn by doing things manually can be automated and scaled later. It’s somewhat frustrating that teams feel like they don’t have time to do this type of work. It’s almost as if they are afraid of what they’ll find out by doing it manually, so they’d rather skip that part and just automate everything. Many of the MVPs I worked on in the past were completely thrown away, even if they were successful. We’d quickly test an idea with customers and if it was a big hit, then we’d significantly refactor it using a technology that was more robust. Usually when you try to scale something that you quickly threw together to test with customers, it doesn’t end well.

Working away in your Tesla? Welcome to the world of autonomous driving 0.1.

There are so many ways to test an assumption. How do you decide whether to run an interview, build a landing page, or create clickable prototype?

DJB - I like framing assumptions against desirability, viability and feasibility. I learned this from Design Thinking but it is tough to find out who specifically coined this type of thinking. I was able to trace it back through IDEO to Larry Keeley’s work. In a recent talk I gave in Chicago, people mentioned that it came from the Institute of Design. I may never find the single source of truth for it but it just works really well for framing assumptions. When you first have an idea, your risk is usually with the customer and your value proposition. So these types of experiments, while not solely focused on desirability, are a good starting point. You can interview customers and then use the quotes from them on your landing page. When your early adopters sign up on the landing page, then you can reach out and demo your clickable prototype to learn even more. It just flows together really well. As you learn more and more, your risk moves around. Eventually you’ll want to run experiments that help you learn that people will pay enough for it and that you can reliably deliver it. In a sense, testing is never over.

«The no-code movement should help non-technical founders, but it’s only just getting started now.»

What will David Bland do in 20 years from now?

DJB - Hopefully, in 20 years we’ll have been a bit more successful in democratizing innovation. This idea of innovation being a secret process that only geniuses can do... that it all comes from a single, brilliant thought... that it’s incredibly difficult and painful… it isn’t helping us or society. Almost everyone I meet has a business idea, but they don’t know what to do with it and there isn’t a lot of great, accessible content out there for them. I believe our global economy is more resilient when people know how to start their own sustainable businesses. The no-code movement should help non-technical founders, but it’s only just getting started now. In 20 years I would love for this thinking and the tool set to be more mainstream. I’d like to be shifting my focus more to how to fund people interested in testing their ideas. I mean really testing them. Too much of Silicon Valley today still relies on emotional investments made on a team, a dream and a PowerPoint presentation. I want to give the opportunity to others who are willing to roll up their sleeves and do the hard work of entrepreneurship. Breaking down their ideas and putting them back again. Testing their ideas against reality to see the flaws and contradictions. I think there is an opportunity for funding people to get to that next step, where they might just have a real “a ha!” moment based on what they’ve learned. I’m not entirely sure what that looks like yet, but I have a few ideas on how to test them.

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