You may have seen the news about the well-funded San Francisco startup that developed a $699 juice machine: the Juicero.
The Juicero uses a pre-packed blend of fruit or vegetable pulp in a squeezable pouch you buy exclusively from them, for $5-$7. You insert the pouch in the machine to squeeze a cup of juice. It applies up to 4 tons of pressure to the pouch with a powerful motor and gearing.
It’s beautifully aerodynamic on the outside and solidly built on the inside, as if Apple’s Jony Ive designed it himself.
It squeezes juice.
That’s it! It’s a juicer.
No one is buying the $699 juicer.
It only does one thing. It’s big, it takes up lots of space in the kitchen, it’s expensive, and you can’t even blend a Margarita with it.
Even after the price dropped to $399 in January, buyers are staying away in droves. This detailed and nicely illustrated breakdown shows where the company went off the rails over-engineering a juice squeezer.
So what happened? Juicero had a great pitch: “A Keurig but for juice.” Where did they go wrong?
How do you get from a Keurig to a $700 juice squeezer?
Enter Agile Hardware Development
Kevin Thompson, Ph.D, Cprime’s chief scientist, leads its consulting and training practice in Agile Hardware Development. He trains teams to use Scrum to develop hardware better, including fast-paced build/validate cycles, techniques that are shared with the Lean Startup world.
Develop minimum useful prototypes in the shortest possible time. Test them with potential users. Get swift feedback on their usefulness and viability.
“What Juicero should have done is along the lines of the Lean Startup concept,” said Dr. Thompson. “Construct a hypothesis, test it, learn and repeat. Some of the ‘test it’ moments involve producing prototype products on a small scale, and getting these to archetypal users for feedback.”
The big “Whoops!”
But…journalists at Bloomberg tested the juicer, and discovered that you could squeeze the juice out with your hands.
Juicero assumed that a market existed for their product, then invested massive amount of funding to create not only the end-user product, but also the infrastructure associated with it.
Then they launched a pricey device to do something that you can literally do by hand, and easily: squeeze juice.
Bloomberg writes: “Two backers said the final device was bulkier than what was originally pitched and that they were puzzled to find that customers could achieve similar results without it.”
Juicero captured $120 million in venture capital from name-brand Silicon Valley investors. Why didn’t someone, anyone, demand a test of a prototype before it hit the market at $700 a pop, ignored by customers and slagged by the media?
“Management, being prudent, could have said, ‘Maybe we should validate our direction before we invest $120 million in it. Let’s get some juicer prototypes out, at least to focus groups, quickly, and try people out on them,’” said Dr. Thompson.
“If the prototypes used a lever, and then buyers found out in a test they were triple the cost if they had a motor, would they have decided not to buy it?
“That would’ve been an interesting thing to discover,” he said.
“It would have been incredibly valuable for the Juicero leadership, and their investors, to hear that their idea was just a terrible one, that no one wanted anything to do with it. And learned that in the first 3 months before they had spent millions on it.”
With Scrum, the time and cost of a change of direction are relatively low and relatively easy to do.
Typically hardware design and engineering teams use traditional planning techniques like the waterfall model. They make a long-term plan, usually 6 months – which can be an anchor around the neck of a development team.
With the traditional planning techniques cost of planning is very high. The cost of changing the plan is also very high. Therefore, teams change long-term plans as infrequently as they can manage.
With Scrum for Hardware, a team plans in 2-week Sprints, and creates prototypes rapidly, by breaking the work into small chunks. They hit their nearest prototype goal as quickly as can be done; and because costs are low, they don’t have to invest huge amounts in each one of the prototypes.
“Lean Startup and Agile are aligned and overlap tremendously. In Agile, we do things quickly in small pieces and refine our design as we go, building in small pieces,” said Dr. Thompson.
“Change always carries a cost, but you pay a lower cost in a Scrum style situation than in waterfall. If it costs less, you don’t mind doing it.”
With Scrum, Cprime trains engineering teams to plan for 2 weeks at a time at a detailed level. They then plan the next 2 weeks after that, and keep iterating.
Within each of those 2-week Sprints, they have specific techniques for planning, writing specs, and tracking. Having completed the last Sprint’s work, they plan the next Sprint, taking into account the feedback and external factors that are sometimes impossible to have anticipated.
Maybe the previous Sprints built a prototype with more capabilities, and tested it in a focus group and the users came back and said, ‘We hate everything about this.’
Then the team says, ‘We’re not going to further build Prototype 2 because it doesn’t make any sense, and we’ll take what we’ve learned and apply to it Prototype 3.’
Discover the Unknown-Unknowns much sooner.
“It’s not the things you know you Don’t Know, it’s the things you Don’t Know you Don’t Know, that were never in your thoughts anywhere, that destroy you,” said Dr. Thompson.
“You want to create and validate hypotheses in materials, build a new one and then a better one and a better one, and iterate your way to something you can actually build and ship with validated confidence.
“If Juicero had launched with a Lean Startup attitude, and Agile techniques for making it possible, they probably would have iterated and discovered this was not going to work,” he said.
“And then gone on to build birdhouses or something else, and succeeded.”