March 6, 2023

Don’t Open The Black Box: Method For Developing Product Hypotheses

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Alexey Kulakov is JetStyle’s CEO and co-founder, expert in product development, and mentor at business accelerators. In this article he describes the essence of the Black box method, a universal tool for developing hypotheses for product development:

Initially I was inspired by the concept of ‘black box’ from cybernetics. According to the definition of a ‘black box’, a system is viewed in terms of its inputs and outputs without any information of how it works from inside. I took this idea and applied it to product development; I mixed it with several effective tools and canvases, and it resulted in this framework. I regularly use it for my entrepreneurial and mentoring activities.

I use canvases a lot, though I’m not a big fan of them. It sounds controversial, but let me explain. They are a great way to enhance your entrepreneurial thinking. However, they seem to simplify your mental processes too much. People may think that all it takes to create a business model is simply fill in a relevant canvas; this activity, however, often turns out to be pretty useless. I customized the existing canvases to ensure that filling them in becomes a meaningful process.

The Black box method highlights the core factor of your business effectiveness: whether your business has a potential to change people’s behavior. If you stick to this idea, it will not let you steer away from your main goal: change people’s lives for the better. Otherwise, the whole process is just a waste of a canvas form. This idea is crucial because it makes your work meaningful. Also, because people are willing to pay money for something only if they truly believe it will change their lives. This goal is egoistic yet extremely rational.

All we need to do is change people’s behavior.

To give more insight into how I came up with the name and the concept: while you’re managing any system as an outsider (e.g. a Product manager working with programmers), the whole system may feel like a black box to you, and you need an approach to deal with a new unknown sphere. When I consult a specialist who finds themselves in this situation, I say: let’s take all of this and put it in the black box. We don’t need to open it just yet.

On the other hand, a specialist who has worked in a sphere for many years, may also experience a kind of distortion of their perception. Their focus gets too stuck on what’s going on around them. If you’re too close, you might miss the whole picture. In this case, I do the same: I suggest we put aside the functionality of the system and focus on everything else.

Where do we start? There’s a series of questions you need to ask yourself one by one, before you can finally start developing the product and make this process effective and meaningful.

  1. What is the final outcome of your system?

Yes, we do begin our thinking processes at the end. Our job at this point is to put out in words the actual benefits the product brings to customers. How does people’s behavior change if they start using our product? How is it going to make their lives better?

This first step looks a lot like a time machine. We don’t usually use those, but in this case we should, as we’re trying to find out what exactly we want.

We really want to look into the future and see that we haven’t worked all these years for nothing. We want to see that our clients are happy with the change our product introduced into their lives.

Ahead of audience research or programming, we have to imagine the final outcome. A product development team should be able to foresee the results at the end of the process. If it can’t, then the whole thing might not even be worth the trouble.

  1. Who are the people we interact with via our product?

Our next task is to figure out the context of future clients. Who are we aiming at? What happens in their lives that they might be unsatisfied with? Previously we assumed our product can make a positive difference to our clients’ lives. Now we need to understand what their current problem is. What process can we improve? In other words, we do our best to describe what problem our clients are currently dealing with.

  1. How will our clients experience the change?

We know what problem we can solve with our product. We are aware of the positive value we want to deliver to our clients. If I put it in another way: we know how our clients’ behavior needs to change. Now – how exactly will they feel that something needs to be different? At this point, we need to find out what will motivate or trigger them to start doing something differently.

  1. What will the clients compare their new experience with?

We mentioned it before: our potential clients have already developed their own patterns of behavior. We’re sure our product will introduce a positive change into their lives. However, the people have already been solving their problems, without our invention.

So when you offer them your product, they are going to compare its features with their past experiences. Who is your competitor? What do they offer to your potential audience? What is unique about your offer? What holds your customers from switching to your product? At this stage, you also need to think about the impressions and feelings you want to leave in their memory.

Now – Let’s Open It!

After you’ve found the answers to all the questions mentioned above, it’s high time to discuss the functions of the product you’re working on. It’s finally time to open the black box!

  1. What is your solution?

What exactly do we do to solve the problem our customers are experiencing? Our solution should possess the following features:

  • It should be the cheapest one,
  • With everything else being equal, people will want to choose your product.

If you are confident that your product is going to deliver positive value to your clients’ lives, then you’re ready to think about what exactly your product is going to look like. You might need to develop a website, launch an ad campaign, create a design or a copy for a corporate card – and now is the perfect time to work on this.

The final result of the black box method looks approximately like this: people changed their behavior and enjoyed the change + we spent minimum effort to make it happen. The minimum effort in mind is exactly the essence of your first product development hypothesis. Voila – you’re good to go and start the experimenting process, during which you will have a chance to actually deliver value to your customers.

***

One more thing I’d like to mention: the Black box method works perfectly when there’s no existing best practice. If you want to use something you did before, you don’t really need to do this exercise. The Black box method is applicable to innovation.

Every time you think of a new feature, first put it into the black box.

After you cut off the burning desire to create something, it’s a great idea to think about your customers and the value your novelty may bring them.

I hope this is clear and useful; if you want to learn more about how the product  development approach works, you can read my book. It’s available for free on Amazon; the book gives a general overview of this strategic school and explains the core terms and stages of the process. If you have questions about the Black box method, or would like to talk about product development, you can reach out via orders@jet.style.

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