What is the Riskiest Assumption Test (RAT) and how can it be used to test?ideas?
Konstantin D
???? IT Lead Product manager | B2B | B2C | Digital | Mobile and Web Apps | R&D |
Article 22/34 about #productmanagement with a focus on Hard skills.
In the world of product management, the importance of testing hypotheses and ideas is undeniable. One effective tool for this is the Riskiest Assumption Test (RAT), or the Riskiest Assumption Test. In this article, we will look at what RAT is, how to use it, and why it is important for successful product development.
Introduction
Every product starts with an idea. However, not every idea becomes a successful product. The problem is that there are many uncertainties and assumptions along the path from idea to final product. If these assumptions are wrong, the product can fail. This is where RAT comes into the picture.
RAT helps teams identify and test the riskiest assumptions that can make or break a product. By applying this test, teams can minimize the risks and increase the chances of success.
What is Riskiest Assumption Test?
Riskiest Assumption Test is a technique used to identify and test the most critical assumptions in a product hypothesis. The main purpose of RAT is to identify those assumptions that have the greatest potential to negatively impact product success and test them with minimal time and resources.
Basic RAT?steps
1. Identify assumptions: Identify all assumptions on which your product hypothesis is based.
2. Assumption Prioritization: Rank the assumptions by risk and uncertainty.
3. Designing experiments: Create simple and quick experiments to test the riskiest assumptions.
4. Conducting Experiments: Implement experiments and collect data.
5. Analyze the results: Evaluate the results of the experiments and decide whether to continue with the hypothesis or whether changes need to be made.
Cases and?examples
Let’s look at a few case studies to better understand how RAT is applied in practice.
Example 1: New functionality in a mobile application
A company is developing a mobile app and is considering implementing a new functionality?—?in-app purchases.
Assumptions:
1. Users will be willing to pay for the additional functionality.
2. This functionality will increase user engagement and retention.
RAT:
1. Identification of assumptions: Assumptions 1 and 2.
2. Prioritization of assumptions: Assumption 1 is the riskiest because without users’ willingness to pay, the functionality will not be successful.
3. Experiment Design: Conduct a survey among current users or launch a small advertising campaign offering a test purchase.
4. Conducting the experiment: Implement the survey or advertising campaign.
5. Analyze results: If less than 10% of users are willing to pay, it’s worth revising the functionality or improving the value proposition.
Example 2: Launching a new product in the market
A startup is planning to launch a new product?—?a smart watch for kids. Assumptions:
1. Parents are interested in monitoring their children’s activity.
2. Smart watches will be perceived as a safe and useful product.
RAT:
1. Identification of assumptions: Assumptions 1 and 2.
2. Prioritization of assumptions: Assumption 2 is the riskiest, as product safety is a critical factor for parents.
3. Designing an experiment: Creating a prototype and conducting focus groups with parents.
4. Conducting the experiment: Implementing focus groups and collecting feedback.
5. Analyze results: If more than 50% of parents express safety concerns, the design should be revised or additional safety features should be added.
Real examples
Example 1: Dropbox
When Dropbox first started, its founder Drew Houston faced the problem that users didn’t understand why they wanted the product. The riskiest assumption was that users would see value in a simple and easy way to synchronize files. Houston created a short demonstration video explaining Dropbox’s basic features. The video went viral and thousands of users signed up to beta test the product, validating an important assumption.
Case Study 2: Airbnb
In the early stages of Airbnb, the riskiest assumption was that people would be willing to rent their homes to strangers. The founders created a simple webpage and started posting their own apartments to test this hypothesis. As a result, they received a positive response and were able to attract their first users, which confirmed the viability of their idea.
领英推荐
Templates and tools for conducting the Riskiest Assumption Test?(RAT)
In this section, I will describe the basic templates and tools that can be used at each step of the RAT process.
Templates
1. Template for identifying assumptions 2. Template for prioritizing assumptions 3. Template for designing and conducting experiments 4. Template for analyzing the results of experiments
1- Template for identifying assumptions
This template helps the team to collect all the assumptions that underlie the product hypothesis.
Proposal?—?Users are ready to pay for the product
Description?—?We propose that users will be ready to pay for the suggested functions as they solve their key problems.
Proposal?—?The product is easy to use
Description?—?We propose that users will be able to easily interact with the interface and functionality of our product without the need for training.
2- Template for prioritizing assumptions
This template helps to rank assumptions by their risk and importance.
3. Template for designing and conducting experiments
This template helps to structure experiments to test assumptions.
4. Template for analyzing the results of experiments
This template helps to structure the analysis of the collected data and make decisions based on the results of the experiments.
Problems and solutions
Problem: Lack of data
Solution: Use simple and quick data collection methods such as surveys, interviews, or minimum viable products (MVPs).
Problem: Limited resources
Solution: Focus on the riskiest assumptions and conduct minimally costly experiments.
Problem: Team resistance
Solution: Explain the importance of RAT to minimize risk and increase the chances of product success. Involve the team in the process of prioritizing assumptions and designing experiments.
Pros and cons of?RAT
Pros
- Minimizes risks: Allows the most critical assumptions to be identified and eliminated.
- Saves resources: Helps avoid the cost of developing unprofitable products.
- Increased chance of success: Provides more informed decision making.
Cons
- Requires time and effort: Resources are needed to conduct experiments and analyze data.
Supplemental Materials:
Conclusion
Riskiest Assumption Test is a powerful tool for product teams to minimize risk and increase the chances of product success. By applying RAT, you can effectively test the most critical assumptions and make informed decisions. Remember that product success depends not only on a good idea, but also on the ability to test and adapt that idea in the face of uncertainty.