To understand what makes a product succeed, one needs to understand what makes a product fail. Once you pre-identify your points of failure, you can build a product strategy that manages the risks around these fail points and increase the probability of the product success.
Four reasons why a product fails:
- Market Alignment– It is important to know that customers want what you are selling, that there is an actual demand for it. Products that don’t solve a critical part in the target markets or industries value chain, have a hard time succeeding.
- Technical Feasibility– There are tools and methods available to build and scale the product. Without the power of implementation, a product is just an idea. Feasibility makes it sell-able.
- Insufficient Marketing– It’s not only the quantity that counts here, but also the quality of exposure. Are you targeting the right customer base with the right message, and how coherent and well aligned is your marketing strategy to your survival and success goals.
- Bad timing– The first movers advantage is significantly hyped for a reason. If timed right, a product can grab significant market share early on. But even then you might have a product that is too early for the market or one which is faced by a stronger competitor.
A product strategy should be built on three pillars which need to clearly defined and adhered to-
- Core Product– What is the main business problem does the product solve. This is your Minimum viable product.
- Actual Product – What would make the product sellable and turn it into a revenue generating machine.
- Augmented Product– What additional features can be built keeping the core in tact, to cross-sell and up-sell or simply bring additional value to the customer. This category should not hamper the core product vision, and advance the core product functionality by maintaining technical synergy.
A successful product strategy counters each of these threats by:
- Building a superior product- This is the absolute no-brainer. Products that deliver real and unique benefits, with features that are high in quality and scalable. It should help the customer save money or time while helping them create value, and should be able to self-prove to a customer it’s consistent ROI.
- Planning before executing – Do your homework. You don’t have to do a detailed project plan, but the product vision should be crystal clear. Teams should know what is at stake, and how much leeway do they have before building the product. Once the product team aligns and signs off, there should be a control on how many or how frequently the scope of the product can be changed. Any changes beyond the original scope should always be backed by market research driven analysis and data driven arguments.
- Maintaining technological synergy and quality- The company needs to know how far will they stray from their core product strategy, and has to be cautious about the distance between the core and augmented product. The farther it strays away from the synergistic state, the higher the chances of it lower product quality and it’s ultimate failure.
- Maintaining Marketing synergy and quality– This is where the marketing strategy should very closely match the product core value. An over the top marketing strategy with peripheral product vision, increases the probability of product failure.
- Disrupting the market- Great products have this one attribute in common. They change the way the business pain point is solved for the better, and once they introduce the new way of doing things, the old ways die a sudden or slow death.
- Maintaining a consistent innovation premium– This is a measure of whether the company would be able to evolve and enter new markets, solve new business problems, or introduce disruption by building on it’s existing product, while keeping it’s operations running. The product team should frequently and rapidly learn through active engagement and experimentation on how the market responds to the product.
- Maintaining market attractiveness- Keeping the pricing and the product useful and attractive for the customers, is a big part of a successful product strategy and both of them should provide the company a significant competitive advantage.
- Keeping the cost of sales low- The company building the product should know and monitor efficiently the cost of building, marketing and selling the product. The product should be good enough that it’s self-explanatory. You shouldn’t have to spend time making the customer realize the value of your product. Also customization and client expectations should be managed carefully to reduce the cost of building and selling the product.
Following a strategy that encapsulates each of the above best practices increases the chances of a product succeeding high and more predictable.