Hello and welcome to the bottom up skills podcast, I'm Mike Parsons since I'm the CEO of Qualitance, and we continue into the lane hypothesis today on episode 92. We're going to be talking about validating the product's problem solution fit. Now, this is at the cornerstone of your lean hypothesis. In fact, it's a very simple system is a problem, a solution.

And the result we expect, this is how we talk about. Our products particularly useful in the early stages. When there's so many possibilities, everyone's got a suggestion. Everyone, uh, has a recommendation to make your product better. But if you can hold onto this idea of, [00:01:00] Hey, we've got to get the problem solution fit through testing this hypothesis for our product or service.

Um, this will keep you on track. And the beauty of lean hypothesis is that it takes a narrative, a vision for the product and puts it in these three parts. And apart from it being. Just a little bit easier to remember the true magic in this is this is how you pull apart the hypothesis and you test every single piece of the hypothesis.

So in the end, if you've got problem solution fit, you're going to need roughly five different data points, five different parts of your hypothesis validated. You got three, keep going for almost there. Five bingo. Now what you will find in the world of product creation [00:02:00] and in particular, first attempts is that often somebody was solving the right problem, but they were measuring the wrong thing or maybe.

It was the wrong problem that they were going to fix. And we often see a category of the wrong problem for your product is products that are problems that are just a bit too small. For example, it's nice for your user. To have this solved, but it's not necessary. I kind of like, it don't really need it, that kind of situation.

So if you stayed true to lean startup thinking and you're in your build measure, learn loops. The hypothesis is in a really, really good starting point. So it's going to be three parts. Let's jump into these three parts and [00:03:00] let's look at well, what actually do we need to be testing? What do they look like?

How do we pull it apart? And how do we end up being more confident about the products that we're building? All right. So I'm going to read to you a very simple lean hypothesis. If you've been listening to the other episodes, you will have heard me talk about this one before I'm going to read it too. I'm then going to break it down and then I'm going to attach some things that you might want to measure.

And remember if you do. Test and learn what, what is working with your lean hypothesis? I think you're going to just feel so much better about where your product's going. Okay. So I'm going to hit you up now with the hypothesis here it is because we know our customers prefer colder lemonade in warmer weather.

If we add ice to each cup of lemonade, we sell. We expect higher customer satisfaction and more sales. Okay. So that's the full [00:04:00] hypothesis, the old classic entrepreneurial lemonade stand. Let's just Frank and Danielle. Now the first part was the problem statement and it's because we know our customers prefer Coda lemonade in the warmer weather.

So, what you can see here is we're calling out a preference, a desire, a struggle in the problem statement. And what we're doing is we're also mentioning the user segment now. Some of the best lean hypotheses will actually not just say customers, but they'll even go a level deeper and say early adopter, uh, early minority, early majority, this kind of segmentation.

However you break your, uh, customer base down your user base down. You might have personas or something of that nature. The more specific you can be here, the better. Now we've talked about what's happening is that folks [00:05:00] are, you know, Preferring cold eliminate in warmer weather. So our solution is we're going to add ice to each cup of lemonade that we sell.

Now, one of the things you can do in a great hypothesis when you state the problem is you can also give some context and say, they're currently solving this problem. How bringing big water coolers , uh, to the beach, this kind of thing. You can, you can definitely do that for context. That's also very good as a reference point, too.

You know, where you can research, uh, with really good target customers. Okay. So we've got the problem, our solution here. This is the second part of a lean hypothesis of a problem. The solution is we're going to add ice to each cup of lemonade. Now what's interesting here is you're essentially, uh, stating your value prop or your value proposition or the change in the product or service that you're going to be bringing.

What is the new thing you are proposing? To the world and to your customers. [00:06:00] So we've essentially got this really nice play between the problem and the solution. So sometimes what works well here as well is to describe the change that you're going to create much like him. We were talking about how to add it, a richer story to the problem, giving context on how the customer solves the problem today, the solution you can really get into your value prop and describing the change that you're bringing to the world.

Okay, so that's parts one and two problem and solution of the lane hypothesis, part three, it's all about the results. Now, this one is really interesting because in the case of what we had, we said here, we expect higher customer satisfaction and more sales, but what's interesting about that is I've seen products that can sometimes be, uh, satisfying for their customers, but they don't really lead to more sales.

So, this is actually quite a big assumption that I see here in this [00:07:00] hypothesis. So we would really want to be testing this. So if I was looking at, uh, satisfaction of customers, I mean, obviously, yeah, depending on context, you might want to do NPS, uh, exit interviews, these kinds of things. Uh, NPS stands for net promoter score.

And that that's a really effective way of getting a good directional rate on your customer satisfaction. Obviously you might have some sort of a customer recruiting customer at the end of the journey, which might trigger more sales. Um, interesting one that's often, you know, not only a measure of satisfaction, but you've kind of got to bake in the marketing, into the product there.

Um, so. It's all about the results. What are we going to measure? When are we going to know where successful? Like when we hit, what number, like, what does success look like now in this case, we've used a pretty top line approach to [00:08:00] result. What you can also do is start getting into real product metrics. You might use the pirate funnel, which you probably know.

I love a lot, which is going to really talk about revenue retention. And referral metrics. So those would be what you would be measuring if you wanted to get kind of quite specific inside of your product, particularly if it's a digital product, but it also works, um, in analog products as well. Now, one of the things, when you write your hypothesis, if you want to kind of get into a more, uh, sophisticated approach, and this is something that you'll find it much easier once you've done this a couple of times, is that you can write down what you expect in terms of test outcomes, and you can continue your hypothesis and say, well, if we are correct in this hypothesis, By adding ice to the lemonade, if we're correct, here's what we [00:09:00] would expect.
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