Split testing your landing page MVPs is a complete waste of money

First impressions matter, except when you’re looking for a problem worth solving. In that case, split testing your landing pages is a complete waste of money.

Traditionally, you’d use split testing to optimize your landing page. Help it turn traffic into conversions. Your user gets your message. The user experience communicates your message in the stickiest way possible. This tool assumes, though, that you know who you’re selling to, what they need, and roughly what you’re offering.

Why does this matter?

Well, if you don’t know what you’re selling yet, you’re losing money by split testing–when you need it the most. You’re lighting dollar bills on fire and throwing them off your pretty balcony.

Before you optimize your message, you’re better off proving that you have audience-problem-solution fit…first. That’s the whole point of Landing Pages as an experiment or a landing page MVP ( minimum viable product).

Let’s say you have a budget of $200. You still haven’t proven specific people will pay money for your product idea. In that case, you’re better off testing two completely different ideas. That way, the higher conversion rate helps you identify which one is better “raw material”.

“Go” or “no-go”. Not A vs B. And only “Go” on the best one.

Instead of split testing two variants of one idea (comparing A to B), figure out which of 4 different “As” makes your target audience drool the most.

Here’s the deal:

If start with a high conversion rate out of the gate, optimizing it will give you even more bang for your buck later. It’s better to start with a handful of ideas and figure out which one has the best conversion rate right from the beginning.

Better yet, focus on one audience, and pitch them a variety of ideas to see what makes them click.

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If you want to find out more about how to construct proper Landing Page MVP experiments, then my book Launch Tomorrow aims to please.

It’s available over here.

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You see, landing pages MVPs are experiments, NOT landing pages. Knowing how to construct these kinds of experiments can save you some serious cash.

It’s also a very different mindset than what you’ll find anywhere else on the web about landing pages. All the way down to the knitty-gritty of how you analyze your results.

Reverse Engineering The Sale

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Failures should not stop you from trying, keep on truckin

A friend of mine from when I was growing up is a true blue professional hacker for the US military. He gets paid to hack security software. Specifically, he writes software which figures out how other security software works. He figures out what the requirements are.

He prods the software, notes down its behaviors, and then uses that feedback to construct more ideas for tests. Based on the requirements he gleans, his team can build exactly the same thing from scratch, if they decide that’s what they want to. Geeks call this technique reverse engineering.

You can take the same approach when trying to sell a new product. While it might not always feel pleasant, the market tells you what it thinks by giving you feedback. (No feedback is feedback too.) I’ve put up offers which seemed like they’d be interesting for my target audience, but they didn’t sell.

Certainly made me feel like a doofus, although it clearly wasn’t fatal, since I’m writing to you about it! They attracted attention and freebie downloads successfully, but for some reason, people didn’t feel motivated to buy.

Keep on truckin’. If you don’t have a selling offer yet, keep prototyping new products and putting them up for sale where you think your market hangs out. Keep talking to them.

You can do this systematically by planning to launch a new offer every week. It doesn’t need to be perfect with a massive campaign and a perfect website. It just needs to attractive to a niche and buyable.

Once you are at the stage that people are buying, then go ahead and work outwards from there. Your first few sales, while they might seem insignificant, are a crucial step forwards. They give you the basis for reverse engineering who buys in your market and why they buy. You can feed this information back into your product and your marketing.

  1. You’ve identified who buys. Find out about them. What makes them tick. Why they bought. What they liked or didn’t like about the product.
  2. Once you know that, adjust your positioning. Test a change in the language used. Once you know exactly what people want to buy, make it easy for them to find it. Test the packaging, cover, or images. At this stage you can try to improve conversion rates with the usual suspects.
  3. At the same time, figure out where your buyers hang out. Use this medium to reach them. Instead of overwhelming yourself with 94 ways to generate traffic, or basing your whole business off Google traffic, start with a few sources of traffic. Master them. The best traffic sources to choose are the ones which your first buyers already use.

If you don’t have buyers yet, that is your first bottleneck. Figure out how to solve that problem first. Once you have customers, then you have your work laid out for you.

You’ll probably find my book on experiments valuable, to help you get your head around it.

The Best Lean Startup Tool In My Experience


none of these will work: you need a “thinking” tool

There’s a specific agile tool which I think every early-stage product team should use, regardless of whether they’re following the Lean Startup methodology. Lean Startup drew its roots from agile software development. Eric Reis added Steve Blank’s idea of customer development to agile. Assuming we aren’t talking about re-reading Eric Reis’ book for the 17th time, the best Lean Startup tool is the dogeared post-it.

That’s it.

What? Why not some kind of fancy-shmancy online tool that defines, builds, and releases your product? In your sleep. There’s lots of those around. < grin >

Post-Its are placeholders for team discussions. Invented by accident at 3M, having slips of paper with adhesive turned out to be a fantastic tool for organizing ideas.

This harks back to the old Class-Responsibility-Collaboration (CRC) approach introduced in the early days of object oriented software design. Post-its and index cards helped create the internal design of a larger software program. If you don’t understand the problem domain well enough, then it’s hard to design good, clean software. Post-its allowed developers to note that they need to discuss something in detail at a later date. Once developers were ready, they huddled around a problem. They dissected the problem into sub-components. They formulated a solid hypothesis about the best way to solve a technical problem.

Over the years, software teams have attempted to create software versions of the same experience. There are lots of tools which approximate this effect. Of the ones which I think are probably as close as you can get with software: Jira and PivotalTracker.

Unfortunately, as soon as you get a team in front of computer screens you lose a lot of information. This holds true regardless of whether they are in the same room or in different time zones.

Here’s a handful of ways you can use Post-Its for your product development:

  1. General Brainstorming: A great way to pull out the gems from introverts in a group setting, you can write up Post Its individually, vote on them, and discuss them. In fact, this is a format we use at the Lean Startup Circle London #LeanCoffee sessions I help run.
  2. Marketing Copy: When speaking to customers, you hear the words which customers use to describe their problem. By tapping into the conversation already going on in their heads, you increase your own ability to convince them. Just because you know your solution will address their problem, doesn’t mean they do. Since you describe the problem exactly how they see it, you draw in their attention and fascinate them. When you have prospect language on postits, it’s easy to group post-its into similar themes. You can reorganize them based on whatever criteria you want.
  3. Developing An Unfair Advantage: Getting a team to think about their strengths is hard to do. But when you talk about your team’s strength, document them on post its. Have your discovered strengths hanging on a wall. Help everyone with day-to-day decision-making criteria, by focusing everyone on adding to those strengths. By building on your strengths, you are much more likely to succeed. You rapidly develop an unfair advantage, by reinvesting into your strengths.
  4. Verbalizing Your Unique Selling Proposition: Why should a prospect buy from you specifically? Immediately after they decide to buy your type of solution, this is the next question you must answer. It’s simple. It’s critical for your business. It’s also easy to forget about. Post-Its are a good way to organize your thoughts. You can add information about your competitors and alternatives. This will distill the one sound bite which will convince you and your prospects that your offering the best one possible.
  5. Identify Unmet Market Needs: Sometimes you may be struggling with identifying a problem worth solving. To build a successful product, you need to be addressing a difficult problem for your prospects. A good example of using post-its for this process is in the book Blue Ocean Strategy. You can map out the offerings of an entire industry against how customers “scratch their itch”. This identifies unmet needs in the customer’s process of solving their problem.
  6. Feature requests or bug reports: Post-Its are already the bread and butter tool of any decent development team. What about yours? Working from Post-Its, it’s much easier to deliver prototypes or new features faster. Post-Its capture nuggets of wisdom gleaned from direct access to customers or the product owner can be. Post-Its help gather together the relevant considerations for a new product. If everyone is looking at the same wall of post-its, it’s much easier to deliver.
  7. Long Term Planning and Vision: While there is often a strong focus on increasing certainty and clarity with tools like product roadmaps, you risk destroying value by pre-committing to things which don’t need to be committed to. A good example is the default setting of task dependencies within Microsoft Project. In contrast, if you continuously articulate your vision with post-its, you can adapt your vision as you learn. Even though Agile tends to be tactical and focussed on the short term, you can also track long term visions with post-its.
  8. Hypothesis Test Backlog: Post-Its help keep track of assumptions and hypotheses you still haven’t proven. This is the valuable “grunt work” which Lean Startup prescribes. A great way to keep track of what you still need to learn about your market, your product, or your business model, Post-Its allow you to adapt Lean Startup to your situation. Launch that product successfully!
  9. Map Features To Business Goals: Quite often product teams get lost in tons of feature ideas and “things to do”. It’s easy to feel overwhelmed. The most creative way I’ve applied post-its? Gojko Adzic’ Impact Mapping tool. Impact mapping helps you identify high level business goals. Then you organize your development around reaching those goals. It’s a powerful and subtle process.

More Visibility + Less Structure = More Learning

If your goal with Lean Startup is to de-risk a product idea as soon as possible, you need to identify where you are going. To do that quickly, you need “signal”. Signal will help you achieve that faster.

A smattering of post-its on a physical wall are a true “information radiator”. Anyone and everyone can jump in, comment, or move the post-its around. This means you engage everyone’s head.

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Post-Its are a thinking tool. They help your team think clearly about

  • your problem
  • your product
  • your role in delivering a solution to that problem.

With Post-Its, it’s not really about using post-its themselves. Using PostIts means that you interact more effectively: in-person, on-location, face-to-face.

Create an explainer video for your complicated new product. Make sure your audience understands it, without being overwhelmed by technical details.

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As you can see, the lack of structure which post its give you, help you to discover and learn about your problem much faster. By using a software tool, you are hard-wiring in assumptions which may not be true for you or your product.

Stay light. Move fast. And share this with your network. 🙂

[image: infinity studio]

What Exactly Are Real Options?

Unsurprising confession: when I was a scrappy young bachelor, I’d hit the clubs with friends. In a nightclub, anything can happen. I’ve started relationships, albeit not very healthy ones. Lots of Schwarzenegger bodies without Schwarzenegger minds emit intimidating body language. Even the roof can collapse (even though it’s unlikely).

By combining vodka and Red Bull, these muscleheads got the best of both worlds. Lots of energy, complete loss of inhibition, and a sense of being invincible came with this highly exotic cocktail. That combination, while it might have been great in a night club, in reality was a pretty dreadful combination elsewhere.

See, just because it may have been a good idea at the time, it doesn’t mean that the next day would have been so pleasant. The hangovers were terrible the following day.

They craved the loss of inhibition. I suspect some of these guys regretted doing things the next day. Saying things. Because they had alcohol, they had an excuse, in case somebody would hold them accountable, including themselves.

I like being in tune with my id as much as the next guy. I just don’t want to feel the need to explain myself to my conscience. The next day. Vodka and Red Bull was the easy way out. No need to think.

Effective planning requires that same level of conscientiousness. Time is precious. If you haven’t thought through what you’re trying to achieve, you are almost guaranteed to be wasting time. At least some.

Making sure that you’re moving towards your objectives, particularly in an uncertain environment, gives you much greater certainty.

Let’s say you want to make a decision among a couple of strategic alternatives. Each one has certain pros and cons. Each has consequences. Each constrains what you can do later. You’re also not sure how your competitors will react to each alternative. As a result, it’s not immediately clear which one would actually be the best choice. Each one has risk. Not choosing an option is also a risky option.
Enter real options analysis.

Real options help analyze the “big issues” for a company and its existence. They have to do with big milestones. In a corporate setting, having strategic clarity means that the whole company will find it much easier to execute. Everyone is “on the same page”. A strategic decision touches everyone. All stakeholders are affected.

This is analogous to the big milestones in a person’s life: birth, coming of age, marriage, death. All major religions and primitive cultures celebrate these milestones for people. They are important to everyone who knows that person. The community acts together.

Given that a corporation is a legal person created to maximize wealth and profits, real options help decide whether to take a specific path and when to do it.

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According to Sick and Gamba:

Properly managed options create value and reduce risk for the organizations that own them. They arise because of the interplay of 4 things:
1. Real assets: financial options are generally redundant and hence do not create of destroy shareholder value. Real options cannot be replicated by stakeholders and generally create
2. Risk: volatility and risk-return relationships.
3. Leverage: variable costs and benefits work against either fixed costs and benefits or imperfectly correlated costs and benefits.
4. Flexibility: to manage the risk and leverage by accepting upside risk potential and reducing downside risk.

As a decision-making tool, real options help you “cut to the chase” at any given moment. They estimate a financial value on each strategic choice, without forcing you to spend anything. Based on a few things you know or you can estimate, you can easily calculate an implied financial value for each choice. As a result, if you have a limited amount of resources, you create a metric that makes the choices comparable. You can compare $ to $.

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You can also compare that value to the cost of choosing (buying) that option. Because both are denominated in financial terms, it’s easy to compare what you expect to get from making a particular decision, to the cost of choosing it.

Net Profit (Real Option) = E(Value) – E(Price)

At any given moment, you only exercise those options, where you expect to get the greatest net profit. If the value generated by an option exceeds how much it costs you to do what it represents, then you do it. As a result, you make money.

Because you have limited resources, you only choose to buy the real options you can afford at that moment. Naturally, you only choose to buy options that are independent of one another at that moment. You can also sort your options based on the attractiveness of their valuation relative to their cost.

If you choose one option, then a number of related options become worthless. For example, if you choose to become a red raincoat specialist, you won’t be attractive to an army purchaser who want their soldiers to be camouflaged. Ouch.

As the environment changes, you can recalculate the values of each option. Note that the value of an option may increase or decrease because of factors completely beyond your control, such as a disruptive technical innovation. Volatility is an input into calculating the value of a real option, so it’s taken into account as your environment changes.

This is a crucial insight into what real options give you. By nature, people prefer to be wrong than to be uncertain. This human tendency screws up many decisions. It forces decisions which aren’t needed yet. It’s better to keep track of options until either they are worthless, or you are certain that they will generate net profit profit.



Real options prevent “vodka and red bull” thinking, often arising during tense strategic negotiations, as they help you wait until it’s pretty clear that a particular alternative is the best one possible.

Thanks to real options, anyone in your company can use a bit of spreadsheet magic, based on numbers which other people in their company know, and determine the best possible strategy. All information is embedded into the assumptions which feed data into the formulas. Of course, this information needs to be shared across departments. Like many analytic exercises, calculating strategic real option values helps build bridges across departmental boundaries.