Product hypothesis testing | Product management #13

Hypothesis testing

Hypothesis testing allows companies to make informed decisions and minimizes the risk of failure. It’s a tool that every entrepreneur should have at their disposal as it:

• Saves resources – if you test the hypothesis that a live chat will attract more users to LinguaApp, you can save the time and money you would lose building features that don’t appeal to them.
• Reduces risks – if your hypothesis is wrong, you will learn about it earlier and be able to adjust your strategy before you allocate too many resources.
• Expands the scope of action – you can test far more hypotheses than finished product features, primarily because of the resources required to create them. Thanks to hypothesis testing, you can better tailor the product development process to users’ needs.

Hypothesis testing, however, is not a one-time thing. It’s an ongoing process that lets you continuously learn and improve the product.

Understanding product hypotheses

A product hypothesis testing is an assumption that needs to be verified, i.e., either confirmed or disproved. For example, for LinguaApp, one hypothesis might be “A live chat with native speakers will attract more users.” But how to formulate such a hypothesis so that it can be verified? Follow these steps:

• Understand customer needs – first, you need to define what requirements users have. If they want to learn a language by speaking, the live chat feature may be attractive. The first version of your hypothesis might be: “LinguaApp users want to chat live in a foreign language.”
• Segment the market – if your target group includes adults learning the language for professional purposes, you can focus on features that will help them understand industry jargon. Therefore, you can further specify your hypothesis: “LinguaApp users want to chat live in a foreign language about work.”
• Define a value proposition – if the value proposition for LinguaApp is “the most interactive language learning experience,” your hypotheses should focus on interactive features, for instance, “LinguaApp users want to chat live in a foreign language, and when speaking, complete short quizzes on the discussed topics.”

Creating product hypotheses allows you to focus on what really matters to your customers. This is the foundation on which you can build your product. And the next step is testing them.

How to test product hypotheses?

Hypothesis testing is the process of verifying whether hypotheses are valid before starting work on product features. Here are some ways to do it:

• Create prototypes – in LinguaApp, you can create a prototype of a live chat function using, for example, phone calls or conversations through popular instant messengers. It’s worth testing it on a small group of users to get ready answers.
• Collect feedback – gather user feedback by publishing surveys and interviews. Let users vote on new product features.
• Analyze data – use data analytics to understand user behavior. If users add friends in LinguaApp, they will probably be interested in a built-in live chat.

After testing your hypotheses, it’s time to verify them. Let’s move on to the next section to learn how to do this.

Validating product hypotheses

After testing, validating your hypotheses is a key element in the product management process. It’s the ultimate test of the validity of your product assumptions, which lets you decide whether your product has any market potential.

• Gather feedback – reach potential users to get their feedback on your hypothesis. For example, in the case of LinguaApp, launch a new feature for a small group of users and conduct interviews with them to find out whether they are truly interested in a live chat with native speakers. This will help you understand if your product hypothesis provides any value.
• Run experiments – design experiments and tests to validate your hypothesis. For LinguaApp, you can create a simple version of a live chat and make it available to a limited group of users. Then, collect data and analyze user behavior to check if the hypothesis is valid.
• Conduct user research – analyze data related to your hypothesis. When it comes to LinguaApp, you can, for example, track user engagement with various product features. If it turns out that users are more interested in a live chat than in other options, it can be evidence supporting your hypothesis.

Validating assumptions and hypotheses is an essential step in the product management process. Through validation, you can understand whether the hypotheses are valid and make informed decisions regarding the direction of product development. In the case of LinguaApp, these validation methods can help understand which features are most valuable to users and focus on their development.

Summary

Testing and validating product hypotheses is not only science but also an art. It requires a deep understanding of the customer, creative thinking, and analytical skills. Fledgling entrepreneurs should keep a few things in mind:

• Always test new hypotheses before you utilize too many resources.
• Use data and customer feedback to validate your hypotheses.
• Feel free to modify your strategies based on the obtained results.

In the case of LinguaApp, hypothesis testing and validating would help you identify key features that could attract users and expand the app’s reach. However, hypothesis testing is not only about saving resources and reducing risk but also discovering new opportunities and creating value for your customers and community.

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