How To Define Your Product Idea — Infographic
No market need, out-competition and wrong planning can influence much why startups fail. Therefore, it is mandatory to accurately define your product idea and how to make it happen. No matter if your team is outstanding, or if you have a few million US dollars in your bank account, you will need to go through different stages to be on the safe side when you start the big job. We provide you here a global roadmap and a brief understanding of the main elements that you will need to define to avoid confusion and failure. The process is obviously much more complicated, and all steps do not need to happen before you start your project, but it reflects all you will need to do to define your product idea correctly. The outputs will be by the end a business plan and a business model. This article is represented graphically through an infographic at the end.
1. Problem Definition
When you define a product idea, it first needs to solve a problem in our society. So, you need to identify a problem. Otherwise, why would people buy it? Of course, many other products don’t solve any problem, but many best sellers do. Defining an overview of the problem is vital.
But that’s not it. Once you know which problem to solve, it might be a personal one, and you might not be sure if it is going to be a market hit or not. The solution is to define the market background. We will not go through the different steps of a market research in here. It will help you define the next steps, what we call an audience persona. The market growth rates are good indicators of how hot is your next product idea. Similar products already on the market can give you some insights on what is going on, and you will need to look at the statistics of the industry field of the product. If the market is growing fine, you also want to check the market size. It might tell you if this is a very new market or not and how much potential it has at this stage. You could also throw out some surveys to find out what are the best target demographics and psychographics. A few optional elements are for instance the needs and trends of the market, but also the shopping patterns of the targeted audience. They will help you better understand how to market later your product.
2. Product Solution
Once the problem is defined, you need to define the product idea more in details, but this time more on your side and what you think is right. The product overview is the next step, and four elements shape its core:
- The product uniqueness: if your product idea is not unique enough, it might not jump out of the competition, so you will have to define what makes your product a must-buy.
- The product features: some unique features will determine how useful the product is.
- The product benefits: features are not what entice a customer to buy a product. They provide the value/benefits to the client.
- The target audience: you know how unique your product is, you know what it briefly does and what is its value, the right point is to know now your buyers, and your market research will be your primary resource.
Once this product overview is defined, you still have a few points to clear out.
No one should steal your product idea, and you need to make sure you protect your intellectual property when you create a product. Indeed, this nowadays world is not a heaven, and somebody might try to see the value in it before you. As a matter of fact, either you need to make a patent application to protect the design, the technology and/or the utility. If you already have a patent, feel free to use it and mention at any time.
However, there might be some barriers to entry for the market as well. Do not forget to check if there is already a patent for the technology or the design you created as someone might be able to claim royalties out of your new product idea when on the market. The best way is to check your main competitors but also some agencies regulating all patents on a national and international level.
Closely related to the product overview, another important thing to define is the use cases. There are mainly two ways of looking at the situation. The user experience represents how the user interacts with the device and all different interactions. In another hand, you will need to explain how does it work when the device is interacting with its environment. For instance, the device might need to be connected to Wi-Fi, Bluetooth, or would also maybe require reacting under some specific conditions.
3. Product Design
Most people might think that the product design is all about how the product looks. However, it’s way beyond that. Indeed, the product design gathers all requirements that are necessary to define your product idea and build it. In general, these are the elements you include in your PRD (Product Requirements Document) for engineers to develop and build your product.
The design requirements include everything related to the device look itself. You will need to define its size, its dimensions, how to interact with it, its appearance, the materials used for the outer shape, and so on. It can be written down, but the best is always to add some pictures of similar product(s) to give a better understanding to who you will explain this point.
Now that the product look fits your product it is necessary to define its functional requirements, and you will have to separate the primary from the secondary functions. For instance, an alarm clock needs to wake you up in the morning with music and/or ringtone. However, it could be able to retro-light the screen by touching it as night. In this case, the alarm will be the primary function and the second one will be the touch retro-light. You can also categorise functions and classify them into groups if necessary.
It is nice to have a product with an outstanding look, but this is not the only reason your customers will buy it. The hardware requirements need to be defined. The list can be very long depending on how many functions you want to implement. However, it is still possible to divide it into four rough categories:
- the core components like the CPU for example
- the communication and interface if it uses any like Wi-Fi and/or Bluetooth
- the PCB dimensions (layers, technical details, protections, and so on)
- the power source and management as if your product is running on power, you will need to define how big the battery is and what type.
Software requirements are getting more and more popular nowadays especially with IoT products. It includes, for example, the firmware (connecting, for instance, the hardware and the functions), a Cloud (mostly for IoT products), mobile apps, software, etc.
Another category to be defined is the mechanical requirements. It obviously depends on how much mechanical is your product. All in all, it will relate the mechanisms that your device uses, internal space allocation (if the PCB is inside of a box for example) and all mechanical parts/components assembled into the final product.
It is also important to define the performances of your product. These are all the criteria that go on top of all other requirements. The durability, for example, will identify which materials you need to use concerning mechanical and electrical aspects for instance. You need to find out how accurate the device needs to be to define which sensors you will have for the hardware. You have a few other parameters such as the capacity of a device, its full specifications, every timing for each interaction for example.
Nowadays, each country or part of the world has different regulations, and they will affect which standard compliance requirements you need for the final product. It is better never to underestimate this as it can take a long time to make them happen, change many things on the engineering side, but also and more importantly cost a lot of money. These are for example the certifications, regulations, and safety.
4. Business Model
You might not be yet a businessman. However, taking in consideration that you might reach out to some investors, you might need to define your business strategy to pitch and get more people on board.
The most essential to be established are the value propositions. It is, for instance, your pricing and pricing strategy. Indeed, you cannot sell three times its price on the market, but you also cannot sell it for less it costs you to produce. Hence, it is vital to find the perfect pricing and the best ratio for quality and pricing. One important thing that many people often misunderstand is the positioning. It is one of the most powerful marketing concepts. It refers to where you locate your company in the mindset of your customers and how unique you are, compared to the competitions. It will help you define your USP (Unique Selling Point).
Another part is the cost structure. You will quickly calculate it once you define three elements. The key partners are necessary for every successful business. They need to be forged for different reasons and optimise business models. Key activities are the most important actions a company must take to operate successfully. For key resources, it is usually varying according to the business model itself. They can be owned, leased or acquired from a key partner. For instance, a manufacturer will need a facility although a design company might focus more on the human resources.
Finally, after defining what does it costs to bring your product to the market, it is more interesting to know how you will harvest the seeds of your efforts. The revenue streams define it and represent the cash a company generates from each customer segment. A customer segment is aimed to be reached to sell a product or a service. Of course, each one will need a special relationship to optimise the sales. Last, but not least, every customer segment is reached through different customer channels, which is the final point to solve to finish the revenue streams.
5. Business Insights
The first four stages are quite realistic, and the last part might look more theoretical. However, you will need to face it and understand it soon or later. It is more projected than the other stages and requires more attention. However, it is somehow a crucial stage as it can be the one that will kill your business. It contains multiple categories, but they all are important.
Every business owner will say there is always a risk, unfortunately. But it is easier to handle coming problems when you have made what we call a risk assessment. If the product does not work, it is better to have a backup one. But you will also need to take care of the trends and to adapt yourself to the changing market. Another aspect to take in consideration is the competition as you will always have to stay ahead of them or at least special/unique. Also, you will have to check your financial situation thoroughly on a regular basis to keep everything under control or have enough alternatives. Finally, if the team is too young and inexperienced, it might lead to a disaster.
Team management occupies a prominent spot and needs to be defined sooner than later. Indeed, if the team is too technical and not balanced enough, it might be a bottleneck. Of course, the experience of every team member is vital but also their knowledge at different levels. One fails his venture if motivated souls do not surround he/she. So, it is always better to hire people who are at least a little ambitious and motivated.
No matter where you are in this world. If you want to make things legal, you will need to create a legal structure. There are multiple sorts of business entity, and they all have pros and cons depending on your objectives and products. Your team will probably require a physical office. Besides, the more investors you get on board, the more accurate you will need to be with investments and shares.
If you do not want to hit the wall, it is mandatory not to predict the future but know where you are going and what might happen. These are what we call financial projections. Separating that in three subcategories is possible. Profitability timing is critical regarding projecting a company soon and will help understand how to allocate these profits when they come around. On top of it, it is important to figure out how much staff you might have to hire and their cost. As a matter of fact, it will require sometimes investments and funding will be the only solution.
There is one last point, probably the most interesting regarding business projections. The milestones are the biggest steps you want to achieve in a certain timeframe. You will usually start by an MVP (Minimum Viable Product) and reach the working prototype phases. Afterwards, you will have to make a market validation, which can be crowdfunding, or selling some of your shares to get funding. The last step is to do your first production and to make it successful. Of course, it is also possible to separate in primary and secondary milestones.
These five stages do not need to happen all at the beginning, and probably a few steps will be defined after a few milestones are achieved, but it is always important to keep an eye on all elements and not forget a significant detail. To get an easier understand of all steps, check the full infographic below.
