The Value of Longer Build-Outs in Product Development: An IMVU Case Study

Balancing Short and Long Term Tradeoffs

In the world of product management, there's often pressure to deliver quick results and speed up the development process. However, there are times when investing in a longer build-out can actually be more beneficial in the long run. In this blog post, I’ll explore a situation we had at IMVU, where a longer build-out led to greater success and business impact.

The Challenge: Revamping the Checkout Experience

IMVU's checkout experience was outdated and hadn't been updated in years. A lot of the UX was nearly original, and we were growing quickly, adding new payment options, and needing to test our checkout experience. 

One of our main goals was to improve the checkout experience to increase conversion rates and boost revenue. Initially, the plan was to run a simple A/B test with a new, more streamlined concept for the checkout process.

The Decision: Short-Term vs. Long-Term Build-Out

When it came to implementing the new checkout concept, the team faced two options:

• Execute the current test quickly, taking about 2-3 weeks to deliver.

• Re-build the entire checkout code to support ongoing testing and optimization, which would take 5-6 weeks to complete.

The obvious answer for many would be the first option. It was a quick way to execute a test and determine if we could get signal. Also, IMVU was the home of Lean Startup thinking, meaning we had a culture of rapid testing based on MVPs. 

However, there was no question that we would run to want many tests on our checkout experience. It was a core part of the product and we were not trying to achieve product-market fit. We were profitable and making millions of dollars a month, so the opportunity was to grow that revenue base rather than to experiment with new features. 

Additionally, we considered the fact that we wanted to conduct extensive testing on the checkout flow and that most tests on flows have a relatively low success rate (10-20% in most cases). Consequently, we predicted we would be running a large volume of tests in order to successfully optimize this part of the product. 

The Benefits of a Longer Build-Out

By investing in the longer build-out, the team was able to create a more scalable and efficient process for future tests. The new code made it easier to introduce new products, change the store's featured items, and adjust prices more quickly.

The decision to take a longer approach was made through open conversations between engineering, product, and design teams. We considered not only the immediate impact of the decision but also the potential long-term gains and opportunities that the new code would unlock. In this case, speed to market of a single test did not outweigh the longer term upside we would get from a slighter longer build that would enable more rapid ability to iterate.

The Results: Incremental Revenue and Testing Opportunities

The results of the initial redesign were promising. The revamped checkout experience led to an immediate increase in incremental monthly revenue, totaling around $1 million in annual run rate. More importantly, the new code opened the door for numerous incremental tests and offerings, which further multiplied the revenue gains.

Conclusion: The Importance of Nuanced Decision-Making

The key takeaway from this case study is not that a longer build-out is always the right choice. Instead, it highlights the importance of having open conversations between different teams and considering the expected current and future costs and benefits of a decision. By taking a more nuanced approach to decision-making, businesses can make better choices that ultimately lead to greater success and growth.

It also makes it clear that you need to consider the feature or product area when deciding on short term or longer term thinking. If you have no data that the feature or area will have product-market fit or if you aren’t sure it will be accretive to the business, faster cycles to get signal are preferred. For parts of the product where you know they are important and you expect to iterate for months or years, having a conversation about the benefits of a slightly longer cycle to unlock more velocity is worth considering.