End users are constantly looking for better versions of the product they know and love. To meet this demand, businesses must grow and adapt. This means consistently testing new ideas and exploring fresh ways to refine products. Without regular product experimentation, it’s impossible to stay relevant or discover what truly resonates with your target market.
Of course, experimentation and change come with risks. For example, innovative development practices differ between startups and enterprises, and using the wrong approach could lead to undesired results. But, by efficiently identifying and managing those risks, businesses can quickly adjust to market trends strategically.
An image showcasing the key component of product experimentation
Product development is a nuanced process, and it’s important to incorporate your entire team when searching for new ideas and solutions.
But what guardrails need to be in place around product experimentation and innovation, and how are success and failure measured? To help tailor your approach, in this article, we’ll look at:
Table of contents
Goals of product experimentation
The primary goals of product experimentation are discovering what impacts your customers and leveraging them for business growth. The key to integrating experimentation into your growth strategy is understanding your product deeply. To do this, your teams need to conduct thorough product and market research by:
- Exploring market opportunities;
- Identifying where your product succeeds or falls short;
- Pinpointing specific characteristics of your user base and potential customers.
An image showing how the three essential areas of product analysis intersect.
Having a diverse range of ideas and data is vital in the product experimentation process. This data ensures your experiments are informed and logical, rather than random attempts that could hinder growth.
Ideally, you want to have a backlog of research-based ideas that you believe could drive growth. Experimentation is a means of validating or invalidating those ideas. Once established, you can either implement them or start developing new ones.
The product experimentation cycle.
Although driving growth is the primary goal of product experimentation, doing so at a low cost is equally important. Running experiments using low-code or even no-code solutions can help achieve this.
“And how do we do it? Experimentation is a process where you use low-code and no-code solutions to test an idea in a cheap fashion so that when you take that solution to market, you have some validated results that will work when it goes out in the market. And your customers will like it as well as the financial risk associated with it reduces.”
Product experimentation at SMBs versus enterprise level
For start-ups, fast, substantial growth is usually everything. When there’s pressure to grow quickly, experimentation is vital.
Small to medium businesses (SMBs) thrive on a “break fast and learn fast” culture. Not everything is expected to succeed or lead to large-scale business impact. It’s about moving swiftly from one idea to the next, learning from each failure. This mindset makes product innovation easier for senior management.
“Get your team on board, your developers on board, your design team on board and you can literally set up an experiment in one day. You don’t have to fight with other teams to run it, and the buying process is much quicker. And from my experience, the culture at SMBs and startups is break fast and learn fast.”
In smaller companies, fewer stakeholders mean faster approval for new ideas. Experimental teams can move quickly, often working directly with senior management.
In large enterprises, the process is slower. For example, the checkout process itself on a site may be managed by multiple teams, each governing a different aspect. That’s a lot of stakeholders to convince before even starting an experiment.
In start-ups or SMBs, you might get an experiment up and running within a day. At an enterprise company, however, the time to market is far longer.
Building alignment
Whether you’re at a small start-up or a large corporation, aligning your peers, seniors, and customers with your business objectives is essential as it builds a foundation of trust. Senior management will have broad, long-term company goals as well as specific short-term targets they are chasing.
Nine tips on how to build trust in the workplace.
Naturally, innovating often means exploring new ideas. Sometimes, this means straying from the company’s beaten path. However, the risks of deviating from company goals can be significant.
By experimenting within the framework of these goals and aligning with other departments, including the C-suite, you can continue to grow even when some experiments fail.
“When it comes to enterprise, there’s a formal process which I’ve seen. You have to inform everyone and build alignment, and when everybody is on board, then an experiment can go live.”
Co-creating ideas with other departments not only encourages innovation but also ensures everyone feels included. But there’s a delicate art to persuading others to support your vision. The three qualities that are most important here are:
- Open communication;
- Education;
- Alignment and buy-in.
An image demonstrating team and stakeholder collaboration.
Communication
Clear and consistent communication is vital. Poor in-house communication regarding specific experiments could catch other departments off guard and cause unnecessary problems. A regular company-wide share-out, like a document or media update, is an effective way to keep everyone informed.
“We used to do bi-weekly share-outs. We would invite stakeholders, peers, and cross-functional teams to be involved in the experimentation process.”
But remember, honesty is the best policy here. Although you should, of course, share your successes, you should also take the opportunity to air your failures. Owning both sides of the coin is a tremendous way to build trust over time.
Education
Sharing your future roadmap is equally essential. Inform your cross-functional teams of your upcoming plans and the reasons behind them.
Alignment and buy-in
The need for leadership approval depends on the experiment and the size of your organization. In large enterprises, small changes might not require CEO interaction. Bigger bets, however, will need top-level awareness and consent.
Product experimentation metrics
Measuring experiment success varies by your product and your role. Whether increasing conversions or turning trial sign-ups into full memberships, knowing when to pivot is important. When the results are not significant enough to go to market, performing a cost/benefit analysis is crucial before moving forward.
Challenges and overcoming them
Experimentation challenges should always be viewed as opportunities. Although daunting at times, product experimentation is centered around imagination and problem-solving. Engaging more teams and individuals in your experiments increases your chances of overcoming obstacles.
One helpful tip is to keep a detailed report of your activities and their purposes. A physical document can be useful to communicate your goals and educate others. When people see that your work supports the company’s financial objectives, they’ll be more willing to help you get things over the line.
“Even when you talk to your stakeholders, always have a written document which talks about the customer research or the data that you’re seeing.”
The future of product experimentation
The future of experimentation in product development is becoming vital to business strategy and growth. When done right, experimentation can validate transformative ideas with minimal risk.
People are always looking to improve and make processes more efficient; experimentation is no different. A key trend is rapid experimentation, which means quickly testing and iterating ideas to find the best solutions.
An image containing the definition of rapid experiments.
This approach is especially important as companies grow from small to large enterprises. As experiments become more extensive and impactful, visibility and alignment across teams become crucial to avoid conflicts and maximize benefits.
A strong culture of experimentation is what really makes a difference. When leadership supports this culture, it often trickles down throughout the company.
“I think one thing I’m really blessed with at TR is that the leadership is vested in the culture of experimentation. They’ve leaned into it and they’re totally on board in terms of growing and developing this culture of experimentation.”
As experimentation becomes an integral part of strategy, team collaboration will also become a core component of product development. In the past, experimentation was viewed as a special project, reserved for innovators outside of regular product development teams. But now, core and experimental teams work closely together.
With tighter budgets and higher costs to bring solutions to market, experimentation helps mitigate financial risks. Integrating these processes into daily operations makes tracking and prioritizing the most important developments easier.
Conclusion
The future of experimentation in product development looks promising. Ultimately, successful product experimentation and innovation lead to smarter decisions and a stronger market presence. Its success hinges on managing risks, sparking innovation, and aligning with business goals. Product teams will face increasingly complex challenges. However, if you stay on top of emerging technologies and leverage their benefits, these challenges can become great opportunities for growth.
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