Product Opportunity Assessment
As a product manager, you are always overwhelmed with numerous ideas to either make your product better or to launch a completely new product that adds to the existing growth to your user base. But amongst this huge deluge of ideas, how should one make a wise decision ? How should we be sure that a new product idea is actually the one that will uplift your business ? I found the answer to these questions in “Product Opportunity Assessment”
As is the case with any product, your product will at some point hit a “growth threshold” where it enters a maturity stage with sluggish growth rate. That is the moment when you should start thinking about building new products and new opportunities that will fuel your future growth.
So when you are flooded with numerous ideas/opportunities, you should make an assessment of each to see the viability of the idea and to make sure that what we finally decide has a substantial thought process involved (and not just something which felt to be “cool enough” to implement). This helps product manager to decide which opportunities to be pursued and which not to so that you avoid wasting precious amount of resources and money. Following are the steps that I have learnt to make a good product opportunity assessment. This gives me a clear direction to my thought process and thus help me cover various aspects of product even before the wireframing process starts.
STEP 1: Value Proposition
This asks us the question:
“What problem does this product intend to solve?“
In this first step, I try to explore the problem space and see which problem I am going to look at and thereby focus upon. This is the step that sets a clear direction in finding the solution that product will offer. As is the case with any value proposition, this step helps to communicate the key benefits of the product: key solutions to an existing problem. Try to find out maximum 3 key value proposition that your solution intends to offer. It should not be just any set of features but rather core tenets of the product which together solve a genuine problem of the customer.
STEP 2: Target Market (or Target Segment)
This asks us the question:
“For whom are we solving the problem?“
This step propels us to get out of the office building and go talk to our customers, do some market research and help figure out to whom this solution would be appealing. Are there any specific group of people to whom the problem that you are trying to solve resonates more than the rest others ? Is your solution going to be more effective in certain geographies than rest others ? Is the solution gender specific or to a particular demographic?
You will get answers to most of these questions in this step. This helps in knowing the exact user persona or focus group that the product will target towards. Setting up a user persona is a great exercise to streamline your design and development efforts. It always keeps the focus towards building the right product to the right people and thus aides immensely in any future discussion surrounding the product development process. Know your target customers well, and you will achieve product-market fit faster !
STEP 3: Market Size
This asks us the question:
“How big is the opportunity?“
Obviously, we do not want to invest our valuable time and resources on an opportunity that is going to be very tiny (unless, of course you are in a niche market!). This step helps us evaluate the size of the opportunity ahead of us for the product/solution that we are assessing about.
STEP 4: Competitive Landscape
This asks us the question:
“What alternatives are already out there?“
This is a key step in our assessment methodology. This will help us to know against whom we would be fighting for the market share. It helps to let us know that if we are the first movers towards the solution of the problem or are we already late into the game. According to the findings, the strategies of getting into the market will differ and will thus make us ready to compete.
It is also a step where we can start thinking about differentiation. Knowing about the existing players and what they offer can help immensely to design our own offering and differentiate ourselves. May be there is a part of the problem that is not yet tackled by any of the competitors, may be the players out there are offer premium quality, etc. The findings from competitor analysis will help you analyse where you stand and what probable resources you might need to be a great successful product; even before you put any effort on it.
STEP 5: Differentiation
This asks us the question:
What makes us better suited to go for it?
Once we know the competition and still believe that we have resources that could potentially help us develop a product amongst competitors, we start thinking of differentiation. Product Differentiation can be based on various factors: Cost, Margin, Distribution channels, Technological aspects, Marketing, etc. Depending on the expertise a company has available at its disposal, the product manager can think of incorporating those expertise into the product and thus create a differentiation.
For example, your company has great distribution systems already in place for your existing product, then probably that can be leveraged upon to reach more number of customers quickly. On the same lines, other companies competing with your product may not have that advantage and thus you are poised to make your product to differentiate when it comes to distribution. Thus, understanding what resources you have at your disposal and knowing to utilize them for the right product plays an important part in how you will be able to differentiate your product and create value to the end customer.
STEP 6: Go-To-Market Strategy
This asks us the question:
How we will get this product to market?
It is important to think before hand how the product will be marketed and what will be the channels that can potentially be used to market the product. Knowing before hand the possible marketing strategy can help shape the product and also aide in prioritisation of features.
STEP 7: Business Metrics
This asks us the question:
How will we decide success ?
Finally, this is the last step in the assessment that is THE important for business. Knowing before hand what are the business goals and thereby aligning the KPI’s of the product accordingly is an important job of the product manager. Hence, giving a thought over it before hand is beneficial since knowing the business goals will help define the product that is targeted towards those goals.
Defining success before hand sets up a vision immediately that is clear to everyone and thus all efforts thereafter can be focused on achieving it. For example, if the goal of the company is to increasing advertising revenue then one simple KPI for the product could be to increase the user base.Knowing that any new product should be able to acquire large amount of users (thereby contributing to the end goal of increasing advertising revenue), the features of the product can be designed to do exactly the same. Thus, it always helps to give a thought about what our business is trying to achieve and corroborate with the product idea to really see if it fits into our over-arching business needs.
In conclusion, I think following such procedure helps keep the focus of the product manager to only the most important thing, and thus disregard things that are distractive. It is important that when we do such analysis on any product opportunity, we present it towards the senior management and they have a clear base foundation ready for a GO/NO GO decision. By this, I mean that even the product suggestion comes from Senior Management, product managers should do this exercise to really see if any opportunity makes sense.
