Each week, Startup Edition poses a single question to a group of bloggers from the startup community. This week’s question is “How do you discover what people really want?” My answer? Use the $100 test, whether you’re creating software or planning activities with your family.
Every software development team has a long list of features they want to build into their product. At the same time, they are constrained by how much time or money they can spend writing and testing the code. To meet most of their customers’ needs, they end up identifying a “minimal viable product” of the most important features.
When I worked on the Dreamweaver team back in the late 1990s, we used a technique called the “$100 test” to help us prioritize our backlog of feature ideas into an MVP. Here’s how it worked: we gave the members of our customer advisory board an imaginary stack of 100 dollar bills and asked them to spend their money on the list of features we were considering. They could spend all $100 on one feature that they were passionate about, or $50 on two features, or any dollar amount on any number of features. They could even put their money toward new features. Any combination was fine, as long as it added up to $100 and represented what they wanted to see in the next release of Dreamweaver.
Today, many software teams use this test, or something similar, to discover what their customers want. I’ve also seen it used in brainstorming sessions to prioritize ideas that merit further investigation. It’s an effective way for a group to prioritize things when they have more ideas than their resources can support.
Does the $100 test have a role to play in parenting? I think it can! Let’s look at my family as an example.
My family consists of my husband, our two teens, and myself.
Do we want to do more than we can given our free time and our budget? Always.
Do we have an effective approach to prioritize things? Not really. After consulting with everyone, I make most of the decisions. While efficient, it’s not exactly effective, and I often feel burdened by it.
Coincidentally, we have a vacation coming up, and we haven’t yet decided what to do each day. I think we need a family brainstorming session to come up with loads of ideas, and then use the $100 test to figure out what activities we’ll do. It will be a great way to discover what we really want and to get everyone engaged and excited about the vacation.
What do you think of the $100 test? Have you used it outside of product development to discover what people want? Please leave a comment; I’d like to hear from you.
–Karen
© 2013 by Karen Catlin. All rights reserved.
NOTE: This post is part of Startup Edition, weekly wisdom from founders, hackers, and designers who answer a single question each week. Click here to see other answers to this week’s question: “How do you discover what people really want?”
Karen Catlin 
Karen i test software every day as my job, but the features are already determined by the time it gets to me. Sometimes i wonder what method is used to determine the features added as some of them seem of little value to me. I think the $100 test is a great way to weigh the ideas most seriously desired.
Thanks for your comment, Joe. Prioritizing software features can be challenging, and the $100 test is just one technique for identifying what customers want. I’ve also seen examples where features are approved simply because a competitive product has them, or because a large customer is demanding them. Has this been your experience?
Oh yes. I work as a contractor for a major telecom firm and the commercials are alway dissing this feature of theirs over a competitor. It is ridiculous sometimes what is added just to “keep up with the Joneses”. We have certain requirements we have to verify and as you know every change, no matter how minor, can cause unseen ripples that can render your software buggy if not unmanageable,
Awesome post, Karen! 🙂 Love it!
Thanks, Rob! Hope you are doing well.
Karen, brilliant. I love the use of economics – $100 is the scarce resource to be allocated – to evaluate what features customers really want. I got here from William Mougayer’s startupmanagement.org, by the way; he is a regular at Fred Wilson’s AVC blog.
I am referring to it in my own posting on business behaviour at http://blog.atomicinc.com/2013/07/10/100-spend-it-wisely/
Thanks, Avi. I enjoyed your post. Thanks for sharing the link.
Just followed you on Twitter, well worth it. Looking forward to more good reads.
Great Karen…Simple yet very effective approach.
Thanks so much, Pooja.
I love this, but at the parenting stage I’m at right now, my kids would need something more tactile to use than imaginary money. I think I’ll try Monopoly money (it’s not often I have $100 laying around)!
Monopoly money is a perfect way to make it a tactile activity for your kids. Love it! A stack of quarters or poker chips would also work. Thanks for commenting, Julie!
Karen:
This post brought back memories from >10 years ago when I was in the software business! We used the $100 test also, and in fact, we used the $100 to clarify three sets of priorities: those from existing customers, those from Marketing (features necessary to gain new customers in new or expanding markets), and those from Engineering (architectural changes desired or necessary for the long term). The major challenge always came in balancing those three sets of input. The good news was that the $100 test was extremely successful in making the three sets of priorities crystal clear, and then it was just a matter of good meeting facilitation and group dynamics to go the rest of the way to a final decision.
Luckily, I don’t think the middle set applies to parents and families, unless you are trying to attract new children or new parents :-).
-Lise