How to innovate like Tesla (for $0 in 24hrs)
Elon Musk is a master pretotyper. He knows how to test ideas with real customers in the market before he builds anything, so that by the time Tesla invests time, money, and effort into building a new product, they know it’s going to work.
In 2016, he used the Facade pretotyping method when he launched the Tesla Model 3. Picture this:
April 1st, 2016. Elon stands on stage in front of Silicon Valley and says: “We have a magical new car that's going to solve all your problems. You can’t touch it. You can't test drive it. It doesn’t really exist yet. The specs may or may not be the following. It's going to cost roughly $35000-$50000. We may or may not be making it over the next two years. All you can do is see this one car we have onstage behind me. Would you like one?"
Source: The Verge
And any rational human would say, "No way - you're insane." But instead, 325,000 people put down a $1000 deposit and said, "Yes, we would absolutely like one." Idea = validated. Pretotype = successful.
This is an example of a Facade pretotype: you show people just enough of a product that allows them to see what it would be like if it was really on the market. Then, you ask them to take action, and put skin in the game - it might be their email address, or some other information, or (like Tesla) a deposit - to prove that they want that product.
If the data says the idea will work because customers want it? Great! That’s how we got the Model 3. But I guarantee you - if no-one had put deposits down on the car, Tesla would have pulled the plug on their product.
The best bit? Even if the Facade pretotype hadn’t been successful and Tesla did pull the plug, they would have saved millions - perhaps billions - of dollars by not building an entire fleet of cars. They worked out what they wanted to measure, designed an experiment to test their idea, and then gathered the data by asking customers to put skin in the game.
That’s pretotyping.
So how can you do this in your own company? Innovation methods usually start by asking ‘Can we build this?’ In this day and age, the answer is usually ‘yes.’ Nowadays, we can make practically anything with enough time, money and resources. So asking ‘Can we build something?’ is pointless.
The question pretotyping asks instead is: ‘Should we build this?’ We then find the answer to this as quickly as possible, by running experiments - just like Tesla did with the Facade pretotype. But how can you work out what your experiment should look like? You ask another key question: “How do we test market demand for [product/service] for $0 in 24hrs?” Now - can you do that? Probably not. But the point is to challenge yourself to see rapid experimentation through this lens.
To get started with pretotyping, take how long it currently takes you to test something, and then divide it in half, and divide it again and again until you reach the shortest possible amount of time you need to get something in front of a customer. Pretotyping is designed to get the product (or a pretotype of a product) in front of a customer, so that you can get data over opinion.
Now, obviously Tesla’s Facade pretotype cost some money and took some time - but they didn’t sink millions of dollars into a product that they weren’t sure people wanted. Instead, they invested a relatively small amount, tested the product in the market, in front of customers, and got data to answer the question, ‘Should we build this?’ The answer was a resounding ‘yes.’
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Our online course teaches you how to approach innovation like Elon Musk. The Facade pretotype is only one of nine different pretotyping methods that you will learn about in our course. Each method comes with examples to help illustrate how they work in the real world, so that you can gather the actionable, easy tools you need to become a Certified Pretotyper.
Change your innovation game and sign up for our course now. See you there.