The Lean Entrepreneur: How Visionaries Create Products, Innovate with New Ventures, and Disrupt Markets

Wizard of Oz Test

Similar to the Concierge test, the Wizard of Oz test requires little or no actual product development. It could also be called the Hamster Power Generator test, similar to the cartoons in which you discover hamsters on exercise wheels are powering the car engine. Basically, you provide a front end for your product where someone can buy, yet you fulfill the product’s purpose manually.

This is about as lean as it gets. In lean manufacturing, a production stage is started only when demanded by the downstream process. In the Wizard of Oz test, the product itself is in action only when requested by the customer through placing an order.

Zappos started out as a Wizard of Oz test.

CEO Tony Hsieh tells of meeting Nick Swinmurn, founder at Zappos, in 1998:

Nick summarized his entire pitch in three sentences: “Footwear is a $40 billion industry in the United States, of which catalog sales make up $2 billion. It’s likely that e-commerce will continue to grow. And it is likely that people will continue to wear shoes in the foreseeable future.”

He reserved the domain name Shoesite4 and without building out any sort of inventory system, he literally walked down the street to the local shoe store, took photographs of their shoes, and posted them on the website. Several months into the project, Nick was getting $2,000 worth of orders per week. They weren’t making any money, because after an order was placed, “Nick would run to the local shoe store, buy the item, and then ship ...