Reflection – Learning Launch  Jens Hoffmann

Background

We – that’s me and a fellow student - worked on a business idea within the sustainability realm. We  thought of offering an easy way to compensate greenhouse gases to everyday people by becoming a  “godfather for trees”. In other words, people would signup to a monthly subscription and the thereby  provided money would be used to

1. acquire land in their local area,   2. plant trees on that land and   3. nurture those trees.

Thereby, the company would have been able to rebuilt forests subscription by subscription. The offer  would  have  been  easily  accessible  through  the  web  and  mobile  phones.

Challenge

Our main challenge was to find out whether the business model would be sustainable / profitable at  some point in the future.  In other words, we needed to know whether

1. people are interested in buying such subscriptions at all and   2. if they were, how much they were willing to pay.

Selection

Of course, we could have gone out and simply survey potential customers w.r.t the two main questions  mentioned above. But as people often tend to say one thing and ultimately do the other thing, we  weren’t happy with this approach. We wanted to go with an approach that simulates the actual  customer experience and therefore the actual customer behavior as closely as possible. And, as we  wanted to keep the costs as minimal as possible – after all we still were students – we wanted to keep  everything as cheap as possible.

As this matched many of the criteria described by Jens Hoffmann in the lecture “Tool: Learning  Launch” of week 4, we decided to perform a Learning Launch. In other words, we went on to

1. define our core hypotheses,  2. setup a cheap and fast experiment generating the data needed to evaluate those hypotheses,  3. perform the experiment and  4. evaluate the gathered data against our hypotheses.

Application

We continued by setting up a landing page. This landing page was as close to the real website as it  could be. On this website we explained what we are trying to do, why this is a good thing and why one  should buy our product. Those explanations were followed by the actual product offerings. We  provided multiple, exceedingly bigger offers at different prices. The only difference to a real offer was

that at this point, one could not buy those offers. Instead, each offer provided an individual button to  subscribe to our notification service. This notification service would inform users once the actual offer  was available.

Experiment 1: Are people interested in this product?

Before launching the website, we clearly stated our disconfirming facts as explained by Professor Ed  Hesse in “Learning Launch Tool” in week 4 of this course.

Basically, this hypothesis sounded like this:

“Less than x% of visitors of our website are interested in the product and therefore sign up for any  notification service.”

Experiment 2: How much are people willing to pay for this product?

To answer the second main question explained above, people were able to subscribe to notifications  at any price point thereby providing a first signal about how much they are willing to pay.

Similar to the explained above, the hypothesis we wanted to disprove for each offer X at price P this:

“Less than x% of visitors of our website sign up for the offer X at price P.”

Evaluation

For each hypothesis, we defined a certain threshold for the conversion rate we needed to achieve to  disprove the hypothesis. Those thresholds were derived from our calculations on when the business  model would be sustainable.

Execution

After setting up the experiment, we launched the landing page, started a small marketing campaign to  get traffic on the landing page and gathered the resulting data – especially the number of visitors and  the number of signups for notifications for the different services.

Confirmation Bias

We also chose a designated sceptic to avoid confirmation bias as recommended in the lecture already  mentioned above. In our case, we only had two people to choose from and as this is pretty much my  nature, I was selected for the job.

Insights

The main insight was that even though climate change and protecting the environment is an ever- growing concern in the country we launched, the interest in our product was minimal. We were able  to generate traffic on our landing page, but the resulting low conversion rates where to low to  disproof any of our hypotheses. In consequence, we tabled the idea.

In some way the more important lesson for me was that Learning Launches work and even are fun!   We were able to test our idea by only investing 200€ (mostly marketing), a weekend of time to setup  the landing page and four weeks waiting for data to be accumulated.

I will definitively use the approach again at any point where I want to evaluate an idea while keeping  investment and risk to a minimum. And this will not be restricted to business ideas but also personal  matters and situations within my day-to-day work life.

Approach

Even though we never got that far, we would have used Learning Launches once again during the  second round.

We had the idea that “people want to see the impact their subscriptions make.”

To enable this, we had some kind of mail-based reporting in mind. This reporting would have  informed users on a regular basis about the greenhouse gases their trees have absorbed so far.

To test this, we would have

1. setup our hypothesis: “Less than x% of users are not interested in seeing the impact their

contributions make”,

2. launched another notification service for the feature,  3. gathered data and  4. evaluated the resulting conversion rate against our hypothesis.

Unfortunately, this experiment would have been executed some time down the road at a point  where we already had launched the real product and gained a sufficient user base.

