Tuesday, October 16, 2012

Lights, camera, no action! An experimental story...

  • Perfectly MINIMUM - Any more would be a waste. Any less... well, how much less can you do than a FB post. 
  • Perfectly VIABLE - Anyone who truly wanted to borrow this camera for $20 a day would, at LEAST, understand the value proposition and be in a position to act on it.
  • Perfectly EXPERIMENTAL - An experiment is defined (by Wikipedia) as "A scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact".  In this case we were testing a hypothesis: I believed that at least one person would make a comment to reserve and show intent to pay to borrow this camera for at least one day. That was the minimum... I actually believed that with the right amount of page views, that I could have bookings that paid for more than half of the camera's value in 6 months time.

5000 views, 1 share, 5 comments (excluding my own)... = ZERO REQUESTS TO BORROW.

Requests are the true metric in this experiment, followed by payments. The rest are, as Eric Ries says, vanity metricsThe failure of this experiment shows 2 important things... 

  1. The value of testing and Lean in general - Not only could I have gone through the cost and expense of building an entire social network compete with reservation features, payment features, product listing, etc - I did! I now teach Lean as a way to help other people avoid the same mistakes...
  2. The fallacy that adding more people to the "funnel" will have an impact on conversion rates. For some reason, smart entrepreneurs have the ability to convince themselves that when something is not working, the solution is to show it to more people. The logic does not hold up. There was no point in figuring out the right distribution channel or the true economics of this venture before figuring out how to get ONE PERSON to pay and convert. 
Now, Lean does not teach people to give up after the first experiment. It is possible that this experiment was flawed in ways that I hope the comments reveal. But it is certainly more scientific and much faster to test this hypothesis with a Facebook post than with a full working web platform built from scratch. It is also incredibly empowering for non engineers to be able to run their own experiments. 

By the way... it's an experiment... but the camera really is available if you want it! (and ready to pay:)


Drew said...

Great post Adam!

Could you elaborate on other experiments or next steps on what to do if those that you asked aren't biting. How do I find that ONE?!

James Lopez said...

great post!