North, the Canadian startup formerly known as Thalmic Labs, launched a line of smart-glasses called  Focals last month. They're Alexa-enabled, surprisingly fashionable, and $999 per pair.

Take that all in for a moment.

This week, the company opened pop-up stores in Brooklyn and Toronto to showcase the Google Glass 2.0-style glasses. I visited one of these stores with an expert on pop-up retailing to see how North applies online retail strategies in the real world. After all, companies like Google, Intel, Apple, and Microsoft have invested millions into smart-glasses--and few (if any) of them have received as much release hype as these Focals.

I've always been fascinated with pop up stores. They make me feel like I'm part of some cool, time-limited experiment--which is exactly their purpose. The expert I enlisted is Dustin  Foxman, an operations manager for Uppercase, a startup that helps digitally native brands enter the real world through pop-up stores. He's also spent time merchandising for the likes of Walmart and Indigo, and just happens to be my cousin.

We arrived at the pop-up and found three distinct store sections, each differently formatted, organized, and decorated. A staffer showed up to guide us through the sparse, understated 1,000 square-foot showroom.

Apparently, while I was trying on frame styles, Foxman was debriefing with the store's Los Angeles-based designer, Nathan John. Later, at lunch, Foxman walked me through how the experience was a real-life copy of an eBay, Shopify, or Amazon storefront.

The main takeaway: Pop-ups are the brick-and-mortar version of the "minimum viable product" theory, made famous by Eric Reis's book The Lean Startup. Specifically, Foxman highlighted several things to show how the Lean Startup method can be applied offline.

1. Minimum Viable Product

According to Foxman: "Pop up stores are the MVP of offline retail." A minimum viable product (MVP) is the least feature-risk version of a solution for which people will still pay. An MVP for email, for example, wouldn't have spellcheck or let you change fonts--but it would still convey messages from Tokyo to Los Angeles exponentially faster that the postal service.

North's store is an MVP. It only does one thing: onboard new customers. The glasses are MVPs, too. They only come in a few styles, don't have cameras, and don't do much beyond delivering notifications into your right eye's field of vision.

That's still enough, North is betting, to deliver on the value proposition. It's not about the hefty price tag--it's about bringing the MVP to early adopters so the company can get real-world feedback in the wild.

2. A/B Testing and Cohort Analysis

According to John, the store is modular, which means it can be reconfigured at will. This allows for real-world A/B testing, also known as split testing.

Online, companies like Amazon A/B test thousands of small iterations constantly. By reconfiguring a modular store each night, a brand can get the same benefits from A/B testing as they do online.

The key to online A/B testing is "cohort analysis." That's a form of analytics in which you take a large piece of data and break it into small groups for analysis. Each day, a different cohort of like-minded early adopters are coming to the store to get fitted. It's powerful for North to know which store format drives the most sales.

These related groups, or cohorts, usually share common characteristics or experiences within a defined time-span. Foxman suggests that North's cohorts are likely daily: "That way, they can compare the buyers from Monday to Tuesday, from Tuesday to Wednesday, and so on."

3. A Sole Focus on Innovators

I didn't purchase a pair of Focals. My right eye, into which the notifications appear, has an astigmatism. The product is unusable for me.

It isn't that North can't make glasses for me--it decided not to. It shows that the company is only focusing on one very specific audience. "A popup store, like an MVP, can't satisfy everyone," Foxman told me. "Instead, hyper-focus on innovators that fit into your beachhead. By definition, that means some potential buyers won't have their needs satisfied."

Why intentionally ignore potential early adopters like me to focus on the majority? By ignoring all but its beachhead, North hopes to serve the largest chunk of the population with the least amount of effort. Trying to serve all potential customers with an MVP is a recipe for diaster. If you try to address all use cases, your data will become muddled. 

An MVP isn't about launching the best product you can. It's about testing, so you can iterate as you go. Having to deal with outliers, like me, would distract focus from that test and undermine the value provided by the Lean Startup method.

Published on: Nov 20, 2018