Product Innovation and How to Create a Successful Product
Did you know that only 5% of products launched are successful? This means that you are more likely to get into MIT than to launch a successful product! According to Harvard Business School professor Clayton Christensen, about 95% of the 30,000 new consumer products launched each year fail.
Many companies and entrepreneurs claim to have a “revolutionary” product but why is the failure rate so high?
To discover, develop and drive adaptation of a new product, one requires preparation, innovation, the right resources and a little bit of luck! And in the Built Environment, creating a sustainable product is equally as important.
In this post we’ll deep dive into production innovation, and how to create a successful product.
Creativity Vs Innovation
According to the Cambridge Academic Content Dictionary, “creativity is the ability to produce original and unusual ideas, or to make something new or imaginative”.
Creativity is “putting old things in new combinations and new things in old combinations” (Weick,1979).
Product innovation on the other hand means designing new products (or services) or iterating existing ones to meet the majority of your customers’ needs. Shawn Hunter, author of Out Think: How Innovative Leaders Drive Exceptional Outcomes (Wiley, 2013) defines innovation as “the implementation or creation of something new that has realised value to others.”
The main difference between creativity and innovation is implementation. Creativity is just an idea and not reality yet. By leveraging innovation, companies can use their creative resources to make suitable solutions that have commercial viability.
Innovative products have a higher chance of being among the successful 5%. To have an innovative product does not necessarily require you to create a new market for your product but it could be addressing an existing problem or gap in an alternative way.
How not to Fall into the 95% of Failed Products
1. Solve Real-World Problems
Does your product deliver value to its users? Not all innovations sit at a scale to impact the world but the successful ones should provide a solution to a gap or need in the market with the customer in mind.
It is important to have a design thinking approach, a concept adopted by some of the most prolific product designers like IDEO. Design is what links creativity and innovation, it facilitates the adoption of innovation. Empathising with your potential customers is important in discovering and designing impactful products that are not only practical but appealing. Such a level of understanding is essential to identify differentiated and valuable features. However, design should not be associated with appearance alone, a good product design is functional and thoughtful.
2. Product-Market Fit
Is there a market for your product? Don’t skip basic and important questions like “who will buy my product and at what price”. Learning about product-market fit helps companies create value for customers and drive business growth.
“Product-market fit means being in a good market with a product that can satisfy that market” according to Marc Andreesen who first coined the term in his post “The Only Thing That Matters”.
If customers aren’t quite getting the value of your product or word of mouth isn’t spreading and usage is poor, there might be an issue with your product-market fit. Your product features and business model should appeal to a customer to buy your product.
So, how do you know if your product has a market fit? Mostly, you can achieve this by monitoring the market for emerging trends, listening to the voice of the customer and identifying current customer pain points from existing products. Finding product-market fit has to be an intentional process. It is not just the work of the Product Manager or Marketer, every member of the team should strive for product-market fit, from those building the product to those interacting with the customers.
3. Coordinate Stakeholders
A dilemma in product development is that certain crucial stakeholders are not involved in incubating the idea and are often brought in towards the end of the ideation process. This lack of coordination across the sales, marketing and product development team can be detrimental to the success of the product. For example, the marketing team may have some useful design and utility insights at the early stages of development, involving them saves time and resources because it allows iteration to happen early on.
Having the right stakeholders’ inputs from the beginning is important and keeping them in the loop throughout the development process is equally important.
4. Resource Evaluation is Critical
Do you have the right resources to implement and market the product? Do you need to outsource some of these resources?
Research and development, sales, marketing and customer service are all activities that have the potential to create long-lasting customer value and improve a company’s competitive advantage. Understanding your company’s value chain early on in the product development process is important to successfully position your product in the market.
Value Chain Analysis is the process of evaluating all value-creating activities and processes within an organisation. It helps to identify primary and supporting activities needed to create value and which of these can be outsourced. With Value Chain Analysis, you can eliminate waste, differentiate, optimise efforts and increase profitability.
5. Test, Test, Test
Product innovation is a continual process of incremental testing and iteration, to succeed in this, companies should have a “fail fast” mentality. Failing leads to knowledge and knowledge leads to breakthroughs and growth. Rather than building a “market-ready” product and pushing it into the wild, get a prototype and test it to help you plan whether to refine, redesign or pivot your product. This lean strategy has helped many companies like Dropbox tailor their products towards the needs of their potential customers all whilst saving on resources. Customer feedback is the best resource for developing successful products.
Product innovation is a continuous process but is crucial for building a successful product. Implementing this early on in the product development process could shape the future of your product.
