Ryan Frederick | May 5th, 2021
The value of a test kitchen when creating a product is immense.
The ability to test and iterate based on real usage with real users is invaluable to getting to the root of a problem, understanding a user’s existence, and removing friction.
Even the smallest and tightest group of beta users still takes coordination effort and time that is crucial when you have an early product. Having an internal test kitchen where hypotheses can be proven or disproven quickly and with the smallest amount of effort reduces time and increases accuracy to market. Test kitchens facilitate customer product fit better than almost any other early product approach.
So, what does a product test kitchen look like?
There are essentially two different types. Intentional and unintentional. Intentional test kitchens are more strategic and provide a fast path to customer product fit (I write more about customer product fit over product market fit in my book, The Founder’s Manual), because they are created for the very purpose of providing a representative working environment for a product to operate inside of. Unintentional test kitchens for products occur when a company realizes they have created a product to solve a problem for themselves that could solve the same or similar problem for others. I refer to examples of both below.
If test kitchens make so much sense in other settings to evaluate and evolve new equipment, tooling, systems, processes, and products why haven’t they been leveraged more with software products?
One reason is that intentional software product test kitchens are often viewed as an extra expense and operational overhead. Do we really need to set this up? Is it really going to be worth the time, money, and effort? Can’t we validate what we need to, without creating the test kitchen? These, and more, get asked frequently when discussing test kitchens so the idea of implementing one for a software product takes on a negative tone and perspective almost immediately. The test kitchen gets seen as an anchor rather than as an accelerant. A hinderance that keeps a company from getting a product to market sooner. Why not just build it and get it into customers hands? Keep in mind that behind this question is almost always a vague plan of product awareness and distribution. Test kitchens have been used effectively in almost every physical product and process industry because these product creators know the value of testing and iterating on a product and process in a real-world environment to remove inefficiencies and points of friction before more releasing more broadly.
Software product creators should be adopting the physical product and process creator perspective of using a test kitchen because it works. Software products too frequently get created with too much user and process friction because the products aren't being used in real life and work circumstances. If you want to create and release software products that better align with a user’s problem, workflow, and have less friction then do so in a test kitchen.
Here are some of examples of software products being created in test kitchens and why these products and companies have been successful and will likely continue to succeed:
giftHEALTH is creating a new Pharmacy Benefits Management (PBM) product and has recently raised a $5 million seed round. The most interesting thing about giftHEALTH to me is their decision to buy and operate a pharmacy as a test kitchen for their PBM product.
I’ve been able to get to know founder Nick Potts over the past few years and he credits their test kitchen in helping to speed up their product development, create more empathy between the product team and users, and to reduce friction in the product faster than they otherwise would be able to.
giftHEALTH’s pharmacy test kitchen has also been instrumental in helping to raise investment fairly quickly because investors are emboldened by the company’s ability to create the best product by testing and iterating on it using their own pharmacy as a test kitchen.
“Having our own pharmacy gives us firsthand exposure to the pharmacy and patient experience. We have a direct feedback loop with our pharmacy for determining areas of improvement and quickly testing new innovative solutions. This sets us up for launching a refined product experience for all of our partners." - Daniel Dalton, Director of Product at giftHEALTH
Bevy is a platform for organizations to facilitate and manage their communities. Bevy recently raised over $40m to continue to grow the company.
Bevy’s growth is interesting, and the team has been executing well, but what I’m most intrigued by and impressed with is how the company got started and the genesis of the product. And I have had a birdseye of it happening, which has been fun.
Bevy’s product was unintentionally incubated through a sister organization, Startup Grind. Startup Grind is a global community that helps to inform, support, and bring together entrepreneurs through local chapters and events. Startup Grind created a product to facilitate and manage the Startup Grind community. As the Startup Grind community continued to grow and evolve the product did as well. The product was initially called the Startup Grind Dashboard. Yep, creative naming.
Turns out that as the Startup Grind Dashboard continued to evolve and become more robust to support Startup Grind’s community management needs, the Startup Grind leadership team realized the product might be able to be used by other organizations to manage their communities. They were right and now that’s Bevy.
Startup Grind served as an unintentional test kitchen for the product that eventually become the Bevy platform. Startup Grind’s community management needs facilitated the Startup Grind dashboard to get created and evolved inside of a real-world usage environment. There would be no Bevy platform and no Bevy company if it hadn’t been for Startup Grind serving as a test kitchen, even if unknowingly.
Hopewell is helping companies to empower their team members to do their best work by providing a re-designed work experience and environment that supports them.
Hopewell started with a physical lab in Columbus and have now opened a second one in Louisville. The physical lab helps Hopewell showcase what can be done from a physical perspective to create an environment for focused or collaborative work. The labs are also a great test kitchen for Hopewell to evaluate technologies and to gather data on work preferences and what they need to support their best work.
With the pandemic hastening the need for companies to better understand and support their team members working from anywhere also comes the need to rethink the traditional work environment. Hopewell is using its labs to expose companies to new perspectives around space and tools to foster a better team member experience.
The future of work is the present and the best way to align what people need to do their best work is to do inside of labs where different environments and tools can be tested and evolved.
A professional services firm wanting to have a product and to have the elusive, but highly desirable, recurring revenue is common. What isn’t common is a services firm being able to pull it off. SureImpact is a new software product company out of decade old services firm that is doing just that.
Services firms have an advantage over other companies when it comes to a test kitchen environment because the services firms that have the opportunity to productize some aspect of their process or intellectual property means they have a built-in, legacy test kitchen.
Services firms that successfully leverage their existing and past clients to become early users and advisers while creating a new product can create an early product faster and more in alignment with client needs than having to do so from scratch. Services firms can integrate the new product into their existing client relationships and workflows by demonstrating a value-add to their existing clients, while they are marketing the new product to potential new customers. With the ability to use current clients to help shape the product and get early product validation, there is little need to bring any outsiders in on the early process. This accelerates the early product creation and validation cycles. It is also much easier to iterate with existing clients that a services firm knows they can trust and rely on when collaborating on the functionality and user experience of a new product.
Products like SureImpact that are created inside of an existing services firm’s operation have many advantages that come from incubation inside the firm.
Common Test Kitchen Traits
Creating a new product in a test kitchen has several advantages and when possible, a test kitchen environment should be setup. As described above, test kitchens for new software products can take on many different forms and types but they all have these attributes in common:
- A test kitchen is owned by the company creating the new product. A test kitchen isn’t a focus group exercise or some arm’s length research endeavor. For a test kitchen to be effective in creating a new software product it needs to be part of the company creating the product.
- A test kitchen is valued, invested, and supported as if it is crucial part of the company…because it is. A test kitchen that is a just for show, like many corporate innovation labs, aren’t really test kitchens.
- A test kitchen is as close to real use as possible. For a test kitchen to provide as much insight and value as possible it has to be as real life as possible. In all the examples provided above they were and are test kitchens that work and provide value for customers or clients.
- The best test kitchens can live on their own. Another thing all of the above examples have in common and good test kitchens for product creation do, is that the test kitchen can and often does operate as its own entity. Bevy now operates apart from Startup Grind. giftHEALTH's pharmacy operates as a fully functioning pharmacy. SureImpact is able to serve clients separate from its services firm Measurement Resources. You can be a customer of Hopewell’s software product without being a member of their lab.
There are key stakeholder benefits to a test kitchen as part of product development as well. Customers will value the product having been designed and developed as close to their real world as possible. This lowers the risk associated to implementing a new product. Investors, if that investment makes sense for a product and company, will be intrigued by the customer product fit established by leveraging a test kitchen to create a product. A test kitchen establishes for both customers and investors that the creators of a product understand the problem and how to solve it in practical terms.
Product creators are always looking for ways to quickly test, validate, and iterate. A test kitchen provides the platform to do so based on real operational and service’s needs. There is no better and more intimate way to understand the job to be done than to build a product to support the job to be done in real-time. More startups and corporate innovation teams creating products should give strong consideration how they can implement a test kitchen to support their product creation.