Last Things First: 4 Secrets to Acing Your Product Development Process
Both big and small companies can have difficulty determining if their product or service will be a success before it hits the market. But it doesn't have to be that way.
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Both big and small companies can have difficulty determining if their product or service will be a success before it hits the market. But a few brave businesses have taken the traditional launch strategy and turned it on its head.
When Boeing rolled out its first 787 Dreamliner in 2007, it had orders for 900 airplanes at $150 million each, one of the steepest sales ramps ever. Boeing developed a $135 billion backlog by designing with its customers and selling early-access slots.
While Mark Zuckerburg was still building out Facebook, the co-founder traveled to New York to line up business with advertisers.
These examples are repeatable by both large companies and startups. Boeing reversed the design-build-sell process to sell-design-build. Starting with a concept design they routinely sculpt wet clay in face-to-face meetings with prospects who want to buy it.
Zuckerburg turned a spontaneous idea into a working prototype, took it live, brought down Harvard's network, and started changing the world.
Boeing synchronized its design and sales process while Zuckerburg synchronized Facebook's design, build, sell process
Below are four standards for entrepreneurs (and executives' development teams) to follow to learn early if they'll succeed and to get their product and business model right the first time.
Related: When Testing New Ideas, Keep Simplicity and Your Ego in Check
1. Don't just interview prospect customers, test sell. Once you have an idea, you probably interview prospects to ask what they're doing and how, what problems they're having and what they want. That's necessary, but it's not sufficient. Deduction is error prone. It wastes time. It doesn't produce objections.
Instead, turn an idea into a concept design. Then, as serial entrepreneur Steve Blank likes to says, "Get out of the building." Meet face to face with prospects. Test sell. Objections and feature requests abound. Some won't want it. Others will, in a quantifiable way. That's "virtual backlog," your success meter. If it's high, you'll succeed. If it's low, increase it, or rely on good luck.
2. Use a cross-functional, immersed team, not market researchers. If your teams are like most, they focus on features to the exclusion of customer profile, value propositions, price and other business-model variables. They have widely varied but little shared experience. They're matrixed, part time and remote from each other.
Fix this. Give your core teams shared, immersive, business and technical experiences by test selling directly to all early prospects. Plus, you'll have virtual backlog.
Related: Testing, Testing: Is There a Market for My Product?
3. Focus on the three P's: prospect, pitch and product. Fifteen to 20 business-model variables determine a product-business case. However, without the three P's being right, the business will fail:
- Who is the right customer? Company name, business unit, decision-making team, and channels. Or, consumer name, family, go-to friends and channels
- What are the right use cases for your product, value propositions, and your responses to typical questions and objections?
- What is the right product, including the minimum viable product (MVP), that which results in the highest ROI for a given level of risk?
If the three P's aren't right, optimizing other variables, like lowering the price of what no one wants, won't fix them. Succeed by optimizing the three P's and other variables by test selling.
4. Develop the minimum viable product,Teams often brag about all the features they've added, as if feature count were a badge of honor. Unfortunately, adding features may not improve your business case. The product may take longer to develop, be buggy or hard to support or fail more often.
The MVP is the right-sized product. It's big enough to cause sales, margins, satisfaction, and long-term use but not so big as to bite into ROI or balloon risk.
Determine the MVP by revenue-weighting features for your most important prospects, not by assigning one vote to each as if a spec were a beauty contest.
Sell-design-build is required to define the MVP. If you build then get feedback, you can't start over. The MVP accelerates customer acquisition, product development, funding, revenue and liquidity, while minimizing risk.