Getting Started with a New (Software) Product
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This is a series containing 5 additional articles that expand on each of the topics covered below. If you are new to product management, I encourage you to read them all to get the most out this story. Links are provided below!
It can be exhilarating to have an idea with the potential to become the next big thing. Thoughts can buzz in your mind — of the possibilities, challenges, and impact it could have on you and your users — so much so that you want to dive right in.
But an idea is only the start, and on its own is often meaningless. The timeless quote by Chris Sacca: ideas are cheap, execution is everything encapsulates this best.
A great idea is often regarded as the foundation of a successful product. But this foundation needs to be anchored to the solid bedrock of a sound business strategy.
So what does it take to execute an idea? Unfortunately, there is no one ‘right way’ to build a product. Your market and customers will affect every step of your journey. Instead, a smart strategy to get started on building your new product is to ask the right questions.
In this story, we’ll be covering five such crucial questions:
1. How do I know if my idea is good?
2. What is the best way to monetize this product?
3. Am I implementing the right technology?
4. Is now the right time for this product?
5. What kind of marketing do I need?
Let’s get started on your product journey!
1. How do I know if my idea is good?
Whether you are an entrepreneur, a product manager, or an independent developer, it is your responsibility to find out if customers would want your product. This is called validating an idea (or in product lingo: are you building the right product?). The best way to do this is to ask potential customers what problems they are facing.
A product without a problem to solve is a fancy toy no one asked for.
Next, ask yourself: how will this new product solve the problem differently (i.e. better) from what is already being done today. This is called the value proposition of your product.
You need to make sure you’re doing something more useful than what is already in the market for people to adopt your product.
Once you have both a problem and a value proposition, the final step is to test your product for a broader market interest. Many startups create an MVP (or a minimum viable product) to do this. But unlike the popular belief, it is not necessarily a running piece of software (though many developers do go down that route).
You may take any route to validate your product idea, but the bottom line is to share your idea with and get feedback from as many potential customers as possible.
(For a deeper dive into ideation, read the full article here)
2. What is the best way to monetize this product?
Before deciding a pricing strategy, you should ask: does your product deserve to be a paid one? This is a tricky one to answer. If you ask customers, they would say no in most cases. But most developers have an incentive to monetize their products. This is where your value proposition comes in again.
If your product has a good enough value, customers will pay for it.
However, there is a limit to what types of things and how much customers are willing to pay for. This is especially relevant in the consumer segment.
Next, you need to determine a pricing strategy that keeps you sustainable in the short term and lets you grow in the long. Presently, there are two popular pricing strategies:
The one-time model. It’s simple, list your price and sell the product for that price. But this has an inherent problem— it works best as long as you are in a growth phase, i.e. you keep acquiring new customers. Because unlike physical products, customers expect regular updates so your cost commitments do not end at the point of sale.
Recurring payments, which is more commonly known as the subscription model. It has several advantages. For starters, it is a steady (and reliable) stream of income. Secondly, even though subscriptions cost more over the lifetime of a product for customers, it has often been found to attract buyers as there is a minimal upfront cost and customers can cancel anytime.
(For a deeper dive into monetization, read the full article here)
3. Am I implementing the right technology?
When creating a product, the technology you choose can have a profound impact on its success. To explain why, think of new software development as a building’s construction. If your idea is the foundation, the technology is its skeletal structure. You shouldn’t worry about how fancy or futuristic it is on the inside, but rather how well it is built. Technology is not the star of the show; it is meant to do its job without being noticed. However useful or attractive your product may be, if it has stability issues (i.e. it often bugs out or crashes), customers would lose trust in it quickly.
Going more granular, there are some specific tech related questions to answer as well:
- What should I begin developing in a (possibly) large product?
Start with a minimum viable product. Something ideally without complex technologies that could save you wasted time and investment, if the product were to fail. - What talent do I need in order to build my product?
Think about the different areas of your process: core-development, testing, integration, deployment, team management, and more. Further, the hiring timeline needs to be considered, because getting the right talent on a short notice can be a huge challenge and may even derail your launch timeline. - What should I build in-house and what can I outsource?
You can’t make everything in-house. This has increasingly become true for the software industry. Some things to consider if you are integrating external technologies is cost, data sensitivity and scalability. - How long will my chosen technology carry me into the future?
Think about your feature roadmap; can your chosen technology support your pipeline? Alternatively, can it integrate with tools that would support it? - How scalable is my infrastructure?
Even if you start with a small user-base, you must consider your long-term future as well. That means avoiding bottlenecks in your release process or having a system that is designed to be scalable (such as a modern flat database, or efficient API designs, or even well-apportioned cloud infrastructure).
(For a deeper dive into technology, read the full article here)
4. Is now the right time for this product?
The adage “now is the best time” shouldn’t be universally applied to every idea.
If your entry into a market is too early or (as is often the case) too late, your product will face an uphill battle to gain user adoption.
On the flip side, if you release your product at just the right time, it can be catapulted to greater success. The 2008 financial crisis proved to be a furtive ground for tech startups, such as Uber and Airbnb, thanks to an interest by investors and their deliberate focus on infrastructure services, which was ripe for reinvention.
If you analyze these success stories, you will find three common factors that determine the best launch time:
- Environmental conditions: Sub-factors such as economic conditions, market interest in your product, and the availability of supporting technology is crucial to making your product reach the masses.
- Consumer acceptance: Even if it reaches the masses, will they accept it? This hinges on how familiar customers are with your product or category. Acceptance also implies the general perception towards your product, i.e. is it seen in a positive light or are people embarrassed to accept they use it?
- ‘Buzz’ factor: Certain product categories become (or are cleverly made into) a hype — think blockchain in 2021. Ideally, you’d launch your product at the start of a popularity wave and let the buzz factor propel you forward. Hype can do wonders, both as investment opportunities and adoption by customers.
But what can you do in your specific situation? Here are some strategies:
For late entrants:
Firstly, study the mistakes of first movers and improve upon the ideas that have already succeeded. Secondly, by being a late entrant, you are likely to inherit a highly developed market of customers. Use this to your advantage and find a niche that you can flourish in, as being too general may not work in your favour this late in the game.
For early (or revolutionary) entrants:
Know that customers may not understand or associate with a novel idea. A smart way of solving this problem is by relating your product to existing ones. Your marketing goal should be to show how your product would integrate into customers’ existing lives. A bold new idea which expects to bring about change in someone’s daily routine or way of life may not succeed, but if that idea is used to greatly enhance an existing activity (without necessarily being the focus point), it can become a game changer!
(For a deeper dive into launch timing, read the full article here)
5. What kind of marketing do I need?
Traditionally, marketing was considered as the last stage of a product’s development process. The marketing team would be handed a nearly ready-to-ship product and asked to figure out how to sell it. Their strategy thus was to make the best of what they had.
Today however, marketing often plays a key role in deciding the features and values of new products at the biggest and/or most innovative companies.
You should start with embracing marketing as an integral part of the development process from day one and carrying its involvement through to the entire life cycle of your product. Some of the specific strategies you can use are given below:
- Launching your product
Have you noticed how many indie developers have a website that offer to notify you when their app becomes available? This is no coincidence; the more traction they get on day one, the greater their momentum would be going forward. You too should think of your launch as a big event and work towards achieving maximum attention, by means of a video or live product unveil, a viral campaign, product giveaways, etc. - Sustaining sales over time
Most products follow a predictable sales curve, with a majority of the sales volume resulting from a hyped launch and thereafter substantially dipping. This is not good for long-term growth or even sustainability. There are a few strategies for keeping sales momentum, which include:
(1) Having temporary price reductions or discounts. But this requires a balancing act between maintaining brand image and future sales.
(2) Offering free trials. This helps in getting new customers who were otherwise apprehensive to try your product.
(3) Finally, continually improving your product. The secret to making the most out of this method is to publicize these upgrades. - Building a long-term brand name
However, neither of the above points can keep you going for several years. People forget your initial hype or get used to your improvements; only strategic branding initiatives can sustain you in the distant future. This can only be achieved by building a loyal follower base. But that happens only when you go beyond having a good product; you’ll need to make customers passionate about it. Your best brand ambassadors are your users.
Some strategies include developing a charming public persona, investing in CSR, or (the most common strategy) investing in a platform to connect your users as a network.
(For a deeper dive into marketing, read the full article here)
Thank you for reading! I hope this article provided you with a useful guideline on how to get started with your dream product.
This article is the summary of a series with the same name! Each of the questions discussed above are there own short articles:
1. How do I know if my idea is good?
2. What is the best way to monetize this product?
3. Am I implementing the right technology?
4. Is now the right time for this product?
5. What kind of marketing do I need?
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