6 Missteps Product Teams Need to Avoid at All Costs
Charlie Munger, the business partner of Warren Buffet of Berkshire Hathaway is famous for his quote “All I want to know is where I’m going to die so I’ll never go there. “
This thinking was inspired by a German mathematician who solved difficult problems by inverting. Many hard problems are naturally best solved when they are addressed backwards.
By nature, startups create constantly-changing digital products and launch it to disrupt an industry, often demanding users to change their behaviour.
As any new parent can tell you — change is never easy (they always add “but it’s great” after telling you about their chronic sleep deprivation, but we all know they’re just reassuring themselves).
Startup founders have a tough job — they have to develop products, grow users while worrying about their funding and runway, all at the same time.
In the spirit of inverted thinking, we’d like to share top product mistakes to avoid. All product flops are caused by multiple factors, but we hope that this piece will give you a map of booby traps — showing you what to avoid at all costs.
1. Not Knowing Your Customer
A study concludes that 42% of startups fail because the market doesn’t want the product. In other words, they fail to reach product-market fit.
You can avoid this if you know your customer well. You can’t build your users love without understanding them. How could you make a shirt without knowing their measurements?
Winning a niche is one strategy to grow a customer base. Delighting a specific group of people is easier than pleasing the whole nation. And word-of-mouth is a very effective strategy.
One clear example of this is Facebook. It started by being a social network at Harvard. Just one Harvard. Once it conquered one university, it expanded and became a social network for college students. And today… well, you know how it is today.
In building products, it’s dangerous to mistake innovation for value. Founders may make the most revolutionary product features, but it means nothing if users don’t want them. One example of this is Juicero, a $699 wifi-connected luxury juicer that required proprietary juice packs.
https://www.youtube.com/watch?v=5lutHF5HhVA
It may have the force to “lift two Teslas”* and is nicknamed the “Keurig for juice,” but it had to shut down because not many people want it.
In short, the peak of product success is when a product consistently brings value by solving a customer’s problem. That’s why understanding users is vital for startups.
At Sixty Two, we dive deep into understanding who the users are. We probe, explore and go into full-scale research mission to get a complete understanding of our users, their behaviours and their preferences.
This requires a good amount of resources and time upfront and even at a later stage, but skipping this can be costly or even deadly down the road.
2. Inability to Translate Research into Great Features
Researching and understanding the customer is only the first half of the initial work. The second part is extracting and translating data into a useful product.
Henry Ford famously said that if he asked customers what they wanted, they would answer a “faster horse.”
Now, a great product team hears “a faster horse” and thinks of stuff like these:
- Okay, they want a faster way to get from point A to B. Not horses on steroids.
- But safety is essential — how do we make sure they’re still safe with this turbo-charged vehicle?
- And what will be the experience like? What can we design to make the experience better?
When it comes to developing a product, there are nuances that users miss because they’re too focused on the end goal.
In reality, there are many ways to achieve a goal and to do so beautifully, product teams need to cleverly manage the intricacies that come with a product.
In our experience, here are the three things that help us convert data to strong products:
a. Correct research framing
Before conducting our user research, we decide what avenues we want to explore, evaluate and validate. Asking users “How would you improve this app?” will not work.
Instead, we translate three ideas that we think users may like into design alternatives and ask users for their feedback. We don’t try to draw abstract findings in our tests but instead test our hypothesis.
b. Multiple testing for a comprehensive view
Multi-pronged usability testings provide an immensely better understanding than one test because it gives a more complete picture of your user’s workflow and usage scenarios.
c. Direct observations
We try to get all relevant team members to watch research sessions themselves. This is because each team member may get different insights based on their background, knowledge and experience. We’ll then discuss and synthesize observations to come up with objective findings.
The fact remains, synthesizing direct observations is essential in building great products.
3. Misalignment between Team Members
At one point, developers need to build that product. This might be a little obvious, but choosing the right developers for the job is essential. We have seen founders keeping programmers with bad fit. They do this because the good ones are hard to find and changing developers midway takes a lot of time and resources.
First off, unfitting programmers may choose the wrong platform to build a product. This is worse when the product launches in a competitive space. Your app might move like a wobbly bicycle when your competitors fly past you in their jet fighters.
Even if you don’t have direct competitors, ill-suited programmers can also hurt the business. Poor design choices make lousy UI, causing users to abandon the product out of frustration.
A Nielsen study concludes that it takes on average eight purchases for a consumer to become a loyal buyer. Between the first and second purchase, a brand will lose around half of its buyers. From second to third purchase, it will lose half of the remaining buyers. On and on it goes until it stabilizes, around the eighth purchase.
Now that’s tough enough for regular businesses. For startups? That’s catastrophic because they have limited cash and runway.
On top of having strong coding skill, developers also need to be good team players. Building a digital product is a team sport and good collaboration between developers, designers and studio partners is essential.
Close collaboration needs to take place since day 1 to avoid excessive reworks due to miscommunication. Designers need to know the developers’ capabilities and opinions and vice versa.
Team members need to have aligned expectations and goals. To achieve this, product teams need to have a strong organizational process that is reliable and scalable. This applies to both internal communication between team members and also externally, with service providers and studio partners.
Like it or not, design and codes are like a mom and dad to a great UX — you need both (with good genes) to give birth to a beautiful baby.
4. Lack of Metrics and Feedback
Digital products are dynamic and developing it is a never-ending iterative process.
It’s important for product teams to critically decide which metrics are essential and which are nice-to-haves. One company’s key metric might be another team’s vanity metrics.
Facebook’s key metric is active users; for WhatsApp, it’s number of sends and for eBay, it’s gross merchandise*. Yep, there’s a pattern: it needs to align with your organization’s goal.
Pursuing the wrong metric can be catastrophic.
One example of this is Shyp. Shyp initially enjoyed explosive consumer growth in the beginning. The founder said at that stage, a lot of people say that Shyp can be the next Uber. And he believed it with conviction.
But at one point the growth slowed and the profitability numbers are worrying. The founder refused to accept this and instead, continued to expand aggressively.
In the end, they shifted their focus to small businesses — a more profitable cohort. But it was too late — the damage was too big and they ran out of cash. They shut down soon after.
The right measures are important because they make good indicators of your product’s performance.
These metrics will also gauge the success of each iteration or version update. Good and disciplined analysis of key metrics can steer your app to safety and even victory.
5. Failure to Gain Mass
When a digital product is still in its infancy, the growth of adoption rate is often one of the key success metrics. With limited funding and runway, startups need to gain critical mass fast.
This is especially hard to achieve in platform startups. Platform plays are faced with chicken and egg problem — which goes first? If you only have a handful of merchants/ service providers, you can’t attract users. But users won’t come before you have enough merchants.
One high profile example of this is Google Health. The product was designed so that users can store and manage health data on the web. This includes prescriptions, medical history, medical records, etc.
When Google shut it down, they admitted that they were unable to get insurance companies and hospitals to give patients access to data. On the user side, it’s a little better — there was adoption among tech-savvy patients (speaking of healthcare, check out our case study in building a similar product).
The clock keeps ticking and the fact remains, startups need to achieve a level of scale to sustain themselves. A good understanding of users, as discussed above, helps in avoiding this pitfall
6. Sacrificing Users to (Supposed) Profit
In the initial stage of a startup, keeping and growing users are more important than profitability. The right business model is important, and this usually follows when there’s product-market fit.
Reaching a good product-market fit and growing users are tough and founders should focus their resources and energy in achieving those. Being too eager to profit from the users risks user abandonment if the pricing is not right.
Winners put users first — just look at Google. In the beginning, they focused on being the best search engine, then worried about making money from it.
Paul Graham of Y Combinator says that initially, teams should focus on creating wealth.
With wealth = how much people want something x the number who want it.
At the correct stage, startups can then convert that wealth into money.
Launching and sustaining a digital product successfully is no small feat. Teams need to juggle many balls while making sure their bodies are fit to play.
Among the different factors that we mentioned above, the one ultimate goal is to reach product-market fit initially.
Since startups by nature operate based on assumptions and continue/pivot based on test results and launches, teams need to strive for product-market fit to stay on the game.
That’s our observations. Have you seen other causes? Chime in below!
