PRODUCT DEVELOPMENT
Before you launch that awesome new product
So you have a new product idea. What should you do? Hire a team, raise seed capital, learn to code? You’re probably missing the most obvious answer; here’s why.
Ever bought a lottery ticket? I have. You won’t be surprised to learn that I never did hit the jackpot.
Seeing winners announced every time gives a false impression that anyone could win. But the odds of winning are in fact, very long.
In many ways, launching a successful product can be likened to winning the lottery. We see big winners in the news every day — Paystack, Zoom, Uber. Their success fuels our desires to make the next big product.
But like the lottery, chances of our product’s success relies on a collection of variables: The right product, with the right features, for the right audience, in the right market.
While it’s easy to set out building our idea of the next big product a moment right after we think about it, it’s also one of the easiest ways to fail at it.
Thousands of new products launch every month. Yet only a fraction of those gets enough traction to be considered successful. These two things are a lot more connected than you think.
What most people fail to realize is that products don’t come off perfectly formed in your head. Before your product, you get an idea. Sometimes it’s a great idea. More often than not, it could be a terrible one.
It’s critical to reveal bad ideas as early as possible. So, how do you tell a good idea from a bad one?
It solves a real problem
A lot of times we fall into the trap of becoming solution lovers. For example, people come up with ideas like, what if we can make an app like “Twitter for designers.” Please it is inadvisable to start your concept from an app that already exists. Start from the real problem.
If you must start from an existing app, do extensive research on what problems they are solving to be successful.
No matter how confident you are in the product idea, you first need to figure out whether the problem is a real one that needs solving.
It is crucial to do this, before expending resources such as time and development costs.
Moreso, with the current limitations caused by the pandemic; you might want to be a little more conservative with your resources.
Speak to 10–20 potential customers to understand the problem you’re solving.
I call these “problem discovery” interviews. They’re in-depth conversations, often held in person (or remotely), and last between 30–60 minutes. Not only do they help you thoroughly understand the problems, but you also learn whether the problem is worth solving in the first place.
A problem needs to be high enough on a customer’s priority list for them to want to use your product.
Focus on a single problem. Too often, people create products in the hopes of appealing to everyone. But the best products are those that appeal to people trying to do something specific. They are specialized for the task at hand. You may think it is counter-intuitive to focus on a small market, but the journey to a big market starts there.
Uber didn’t start off solving the general problem of urban transportation. Travis had an idea for an app that lets you ‘push a button and get a ride.’ No food delivery, no pooling, no self-driving cars . . . just a simple solution to a specific problem.
Now here comes the fun part.
Talking to potential customers is not enough
When we hear potential customers say what we want to hear — such as ‘I love the idea,’ and, ‘I would use this,’ — it might sound like validation. However, the inconvenient truth is that opinions and hypothetical statements — usually involving the word ‘would’ — are unreliable indicators of future behaviour.
Those who sign up for your product will provide more valuable feedback than those who say they ‘would’ sign up. If you didn’t already know, there’s a world of difference between saying you’ll do something and actually doing it. Does this mean that the people are lying? Or is something else going on?
I discovered a technique called ‘The Mom Test’, devised by Rob Fitzpatrick. The idea behind The Mom Test is that everyone is innocently lying to you all the time, for a wide variety of reasons. And the person who lies to you most is your mother because she loves you and doesn’t want to hurt your feelings.
Using this helps you realise that people are not to blame; you’ve probably just been asking the wrong questions. Let me explain.
When someone starts talking about what they “always”, “usually”, ”never”, or “would” do, they are giving you generic and hypothetical fluff. Use the mom test to point them back to specifics in the past. Ask when it last happened, for them to talk you through it, how they solved it, or what else they tried.
Turns out the best way to predict future behaviour is to study past behaviour — not to ask people for their best guess. Joshua Tabansi shares a few more ways to help you get started on asking the right questions.
After hearing an enthusiastic customer’s report, it’s easy to jump in and create briefs for your team or even pitch decks to show investors. However, you shouldn’t overlook the much simpler idea of creating a landing page and discussing the product with people who’ve signed up.
Find out if there is a market that makes it worth taking this idea further
Just because a problem exists doesn’t mean enough people are going to be excited to pay for the solution. This is why you have to validate your market.
Your goal in validating your market is to narrow down the group of people who will want their problems solved badly enough to buy your product.
To set the outlook, you may consider asking yourself some of these questions:
Getting as much information as you can on your potential market would also help you figure out a possible pricing structure for the product. This is valuable as you start to make other financial projections.
Talking to your customers and industry colleagues help to evaluate the value and market potential of your product. If things don’t look quite as rosy as you thought they would, don’t be afraid to pull the ripcord and try something else.
What makes a large enough market?
Depends on your objectives for the product…
If you want the product to support you, then a small market, offering a return of just a few thousand dollars a month might be enough to meet your needs. But if you have big ambitions and want to make billions from the product and become the next unicorn startup, then you’ll need to make sure a big market exists.
Here are a couple of tools you could use to find the market for your product:
- Google Trends allows you to compare the relative volume of search terms. It shows you how the demand for each term has changed over the last 12 months.
- Google AdWords’ Keyword Planner reveals the average monthly searches for a given keyword. It also gives you an estimate for competitors and suggested bids. Using this data, you can estimate how much traffic you can drive to your website using paid ads or by reaching the top of search engine results.
- Discussions on online community forums (Facebook groups, Quora groups, Subreddits) helps to gauge whether a lot of people are experiencing the problem you’re trying to solve.
- Dscout’s research platform helps you easily gather market and user research insights to show you how to provide value to your potential customers.
Figure out how much it would cost to bring this product to the market
You’ve seen it before, awesome products launch with a bang but then can’t achieve enough traction to make the numbers balance out. Many of us don’t fully understand how we will acquire customers and then how much those customers will cost to acquire.
The rule of thumb is simple: A customer’s acquisition cost needs to be significantly less than their lifetime value. Yet so many people go in blind on these metrics when launching products.
It’s important to ask yourself the question: Can my product realistically expect to acquire customers for less than the amount that I can monetize them? Fortunately, there are easy experiments that you can use to test acquisition costs.
Challenge your assumptions
Say you’ve examined your idea and it turns out it has the potential to become a great product. In this state you might be so hyped about the idea; you can’t even imagine a world where it could be wrong, or simply incompatible with what people actually need. It’s natural. Scott Jenson calls it Assertive Instinct.
You shouldn’t forget however that it’s been mostly assumptions until this point. Building a better product would require getting closer to reality by testing these assumptions before you launch.
Don’t rely on assumptions, just test. Doesn’t matter if you’re in business or design or media. If you’re a risk-taker, you’re going to have to make a few assumptions. The key is to appreciate the journey as much as the vision because the vision alone is often flawed and biased. In entrepreneurship, this means building prototypes fast and adjusting to the feedback.
You don’t want to be that entrepreneur that spends an unholy amount of time on business plans and spreadsheets that are essentially a work of fiction. Or worse, launch your product based on the original idea and then waste time and resources changing the product and pricing to better fit your market. That’s backward.
For every product I’ve developed, the final product we launched was dramatically different from the original concept we began with. Through interviews and experiments, we were able to challenge our assumptions, discard bad ideas, uncover innovative features, and fine-tune our prices.
Truth is, there is no way to systematically know with certainty that you’ll be successful. But by considering these few tips, you can improve your odds dramatically.
Hi, I’m Lola and I create exceptional experiences that align your business strategy with your customers’ needs. I also write to help people build, launch, and scale amazing products. If you’d like to reach out, follow me on Twitter to continue the conversation. You can also check out more of my work on my portfolio.
