Pretotyping is an approach to innovation developed by Google’s Alberto Savoia, which seeks to decide early in the product development process, whether the right product is being developed. Pretotyping can avoid spending time and money into development. While pretotyping techniques could result in savings, their application depends on the industry and the product being developed.
Following a comment to the “Black Swan” post , the following tries to describe what is meant by pretotyping, its advantages and some pre-requisites for this approach to work.
How does pretotyping work?
A pretotype is a test version of a new product or service, with very limited capabilities and which can be developed in a short period, using limited resources. The potential product is shown to the supply chain as well as prospective clients/customers and armed with the resulting feedback, the product development team takes a “go/no go” decision on whether to allocate more time and resources to full-scale development.
Pre-requisites from the organisation’s perspective
This approach works only if a company’s management team is willing to risk its good name and reputation by showing an unfinished item to third parties. From that perspective, pretotyping will flourish only in organisations that are willing to expose themselves early on in their product development process.
It also takes some confidence to share an innovative idea, given the risk that the first-to-market advantage will evaporate in the process. But bear in mind that innovative companies are not necessarily first to market.
Pretotyping could be of limited use in certain sectors, such as pharma, where regulation, reputation and health risks are real issues. In IT and particularly in the development of online applications, as well as other consumer products where security risks are limited, pretotyping could result in significant costs savings for those willing to take the risk
What are the advantages of pretotyping?
Quicker development times for new products. Failure is no longer a catastrophic event from the financial perspective.
More generally, R&D productivity is a key determinant of value creation in a some sectors, including IT and pharma. In the case of pharma, given the amounts involved, the difficulty in getting new drugs approved and escalating R&D costs, the sector’s ability to maintain returns on R&D investments above cost of capital is a major concern from the investor’s perspective. Pretotyping can be seen as an R&D spend management tool.
Co-creation
This is related to co-creation and LEGO’s example comes to mind. Beginning in the late 1990s, LEGO started an active programme to partner with other firms at each stage of product development, including design and manufacturing. This allowed the company to broaden its product development capabilities without increasing its infrastructure. Improving product development capabilities without increasing fixed costs appears to be the common theme in Google’s and LEGO’s business models.
As a side note: Google and LEGO seem to understand each other, having recently launched the Build campaign, which allows users to claim their own plots anywhere on a digital map of Australia and New Zealand and use virtual bricks to construct buildings. Users can then share their creations online and with their friends. Yet another example of co-creation.
Innovation Models 