Quick Test, Big Impact: Unlock the Power of Wizard of Oz MVPs
In the realm of B2B professional services, where expertise and tailored solutions are the main offerings, the challenge of introducing new technology products or tech-enabled services is magnified as they can require significant upfront investment as well as new skill sets. Imagine if you could first test your new product concept with actual live, paying customers to be sure there is market demand before making that significant investment. Here, the Wizard of Oz MVP strategy emerges as a useful approach and a perfectly aligned solution. Named after the famed character who operates from behind the curtain, this MVP strategy involves using people behind the scenes to simulate a product's functionality without fully building out the underlying technology. For B2B services companies that already have the internal capabilities to deliver the service, this approach is an exceptionally strategic and efficient pathway to innovation.
An example that you are likely familiar with, but may not have known it was actually a wizard of oz experience is Amazon’s Just Walk Out stores. Despite the criticism of Amazon in their use of humans in place of technology, I think they made a smart decision to test their hypotheses through the use of a Wizard of Oz MVP before spending a lot of time and money developing technology they weren’t sure customers would value. While the Just Walk Out concept didn’t work out, the company did learn a lot about customers and technology during this trial phase and can now pivot to smart shopping carts, what they are calling Amazon Dash Carts, that will offer a more reliable shopping experience.
Let's explore why this MVP strategy is a game-changer for B2B services companies testing out new product ideas.
1. Leveraging Existing Expertise
For professional services firms, whether in IT consulting, legal services, or financial planning, the core of their business is the expert service they provide. The Wizard of Oz MVP is a natural fit as it allows these companies to simulate new services using their existing pool of expertise. By manually performing tasks that a product would automate in the future, these firms can deliver a new service experience without significant additional investment. This manual intervention is conducted behind the scenes, maintaining the illusion of a fully functional product for the client.
2. Minimal Effort for Maximum Learning
The beauty of the Wizard of Oz MVP lies in its simplicity and efficiency. Since services firms are already offering specialized services, adding a new layer that requires minimal adjustment to their current operations is highly feasible. For instance, a consultancy firm looking to introduce a new data analysis service could manually analyze customer data and deliver insights under the guise of a sophisticated analytics platform. This approach allows the firm to test the service’s appeal and feasibility without the need for developing complex software initially.
3. Enhanced Customer Validation
Professional services firms thrive on close client relationships and personalized service offerings. Utilizing a Wizard of Oz MVP enables these companies to test how new services are received in a real-world setting without disrupting existing client engagements. This direct interaction provides immediate and authentic feedback that is more aligned with actual market needs, allowing the firm to fine-tune the service according to specific customer responses and requirements. For example, we were working with a client on creating a contract review product. For their MVP they had an interface where customers could submit their contracts, but a human attorney would review them on the backend before re-uploading to the system. Through this process, they could observe the contract types they received, the persona of the customers using the product, and what type of guidance customers found most valuable.
4. Cost-Effective Innovation
Since the MVP uses existing resources and capabilities to simulate new services, the need for extensive upfront capital investment is dramatically reduced. This helps you test key hypotheses before committing significant resources to its development and allows you to see where the biggest value is for customers so you can prioritize investments after the MVP. Once a service has been validated through a Wizard of Oz MVP, firms are better positioned to develop a scalable solution that integrates seamlessly with their existing offerings.
While taking a Wizard of Oz MVP approach helps you embody a “think big, start small” mentality, it’s important to note that there are risks associated with this strategy. The biggest one to keep in mind is that the Wizard of Oz MVP is not a scalable long-term solution and before a full launch, the back end of the solution will need to be reengineered. It’s important to think carefully about how to make the transition from people to technology early on and to define your criteria for successes & failure before launching your MVP. Keep in mind that this MVP model is temporary to help you test assumptions.
For B2B professional services companies, the Wizard of Oz MVP offers a strategy for testing new product ideas with minimal disruption to their core operations. By leveraging existing expertise and resources, these companies can explore innovative services and deliver bespoke solutions without the initial overhead of full-scale development. This method not only conserves resources but also enhances the firm’s ability to adapt to market demands swiftly and effectively. As businesses continue to seek competitive advantages, the Wizard of Oz MVP stands out as a solution that aligns perfectly with the operational dynamics and strategic goals of professional services firms.