As we saw from both the concepts of fail fast and mvp, there are gaps in how product teams apply these concepts to their context. In both cases, we seem to miss the part about "what do we want to learn?". We also seem to be missing the part about the unique business context that drives product goals. Applying fail fast and mvp as broad strokes, without underlying context, Key Business Outcomes, and market maturity isn't very smart. Both mvp and fail fast, I feel, are at the intersection of the 'what' and the 'how.' This can be useful for certain business scenarios, especially when in the problem/solution fit stage. However, once technology viability and market needs are established, we cannot focus purely on viability and speed.
Looking again at the car makers history, having four wheels was always an integral part of the product that was competing to replace the horse-driven carriages. The earliest versions of the automobile had to offer something more than the horse-driven carriages were already offering, but they didn't have to have the same frills. The baseline on luxury was already set by the carriages. So, the minimum that even the first cars would need to have was defined by what a horse-driven carriage was offering. Whether the automobile could compete with horse-driven carriages could have been one of the riskiest propositions for the car makers. This was proven by the combustion engine's potential.
At this point, people adapting the engine-powered four-wheel automobiles were the early adopters. They were the folks who saw the immense potential of the automobile. They were the folks who were willing to forego frills to adapt this solution, because their need for speed and their concern with safety in horse-driven carriages far outweighed the lack of luxurious convenience. Bertha Benz was Carl Benz's wife. Without her husband's knowledge, she undertook a long trip with her two sons, proving that the four-wheeler, powered by the engine could sustain long drives. This was another proof of viability and it was seen as quite a sensation to have proved that automobiles had the potential to sustain long drives.
The first version of the car had to be already better than the horse and carriage. The subsequent versions of the car were iterations on the style, convenience, seating, and manufacturing processes. Between the late 19th century and the middle of the 20th century, car models had undergone significant improvements. As seen in the following images, the four-wheeler automobile spawned off so many variations in design, style, and features within the first 30-40 years after the first car went into production with an internal combustion engine. Car models continue to be launched, with electric cars and self-driving cars becoming popular now:
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The innovations of Henry Ford (founder of the Ford Motor Company and a pioneer in the development of the assembly line technique of mass production) were in creating the assembly line. Manufacturing cars now had a viable cost proposition. Today's Tesla electric-powered cars were based on the viability of battery technology. An Impact Driven Product has one or more components of proven viability. However, the product cannot be impactful unless it appeals to the customer and can create a demand from the market that can help the business to grow, sustain, or influence.
There is a difference in how we should approach product building for an early stage business in a market where needs are not validated and where technology viability is not proven. In cases where a problem/solution fit is not established, mvp makes sense. In fact, in the problem/solution fit stage, sometimes, the mvp may not even be a product. It could be market research survey, concierge models of mvps, or a simple landing page with a promise of the product to come. After all, we are looking to test the unexplored market. Even there, we cannot blindly dive into building without thinking about the business outcomes and the target segment.
In established markets (where technology viability is proven or alternate business models exist) and in cases where we have validated the problem/solution fit, we need to expand our thinking beyond minimum viability. It's not about picking up the smallest scope of work. It is not about creating a prototype. It is not about blindly rushing to meet a timeline.
Businesses don't look at just one aspect of the product and assume that it will be successful. We need to look at the entire product experience, market needs, and commercial viability to create a product that is impactful. Impact is important not just at the early stages of product building but also in every subsequent phase. Product management needs to align about what is the smartest thing we can put together that can drive the most impact for our target customers.
What is our Impact Driven Product? We need to answer the following questions every time we enter the Impact Driven Product development cycle:
- How do we grow as a business? What is the most impactful thing that will meet our Key Business Outcomes?
- How do we deliver value to our customers? What is the unique differentiating product experience that will delight our customers?
- Will our riskiest proposition nullify our biggest hypotheses? Will the failure of the product experience kill our business?
- What is the smartest way to deliver impact? When, how, and by what means can we deliver impact? Smartest is not necessarily the smallest or fastest solution. Also, your idea of fast is not the same as my idea of fast. Speed is not about blindly racing toward a timeline, but looking at the timeline in the context of business impact and the internal and external constraints.
As indicated earlier, there are many factors that can impact when a product takes shape and is ready to be released:
This statement from The Innovator's Dilemma (Clayton M. Christensen) captures this well: "When performance oversupply occurs, it creates an opportunity for a disruptive technology to emerge and subsequently invade established markets… the criteria by which customers will choose one product or service over another will change, signaling a transition from one phase to the next phase in the product life cycle."
By focusing on the minimum viability aspect of the product in a proven market, we are losing out on the opportunity to maximize the potential of a proven technology. Instead of aiming to create the utmost value for the customer and scripting the success for the business, are we limiting our thinking to creating the simplest possible product that will cushion our fall if we fail?
When we have validated that a market for four-wheeled automobiles exists, and if the technology viability has been proven, then we don't go and build a skateboard. We build the four-wheeled automobile that will delight our customers, even if it is a barebones, no frills version of the automobile. What we need to launch (even as the first version) is a product that is so valuable to the consumer that he or she will jump through hoops to adopt our product. We still need to identify early adopters in our target segment, but our first version of the product must be much broader than what we would define as a mvp today.
Deciding upon a hypothesis about the product before we even begin product development is important. This hypothesis determines what we want to learn and should be centered around a specific target segment of consumers (you can't make everyone happy at the same time, so who do you want to choose first?). It needs to be based on a gap in the market or a critical need not addressed by any product today. You need to have the technological potential to close the gap or deliver the critical need to your target consumers. These are our prerequisites.
For instance, we could postulate that working women in urban Indian cities need safe travel options. So, let's say that business A is hypothesizing that women-driven cabs, that can be hailed with a mobile app and are personalized to women travelers, will be a successful product. However, is this a hypothesis backed by concrete evidence of what the consumer really wants? We see a gap in the market, a need that exists, but how do we know if an idea for a product meets what the consumer wants? What Key Business Outcomes will this product establish for business A?
Product building needs to be preceded by early validations with the customer base. These could be through conversations, research, or even a well-marketed landing page with options to sign up. Renault Duster's launch in India and its success in the SUV segment is worth recalling. Renault recognized a gap in the Indian car segment. SUVs manufactured by global players were in the Rs 20 lakh and above range. There was an opportunity to make SUVs in the under Rs 10 lakhs range. Renault was looking for volume drivers (http://www.businesstoday.in/magazine/case-study/case-study-renault-duster-success-story/story/199321.html). This was their key business outcome.
Learning from the failure of its earlier cars in India, Renault initiated a study for 200 people whose profile matched the potential buyer. Members of the product development team spent time with 30 of these families, to get to know what they liked and did not like about their vehicles.
The study revealed that rugged exterior looks, a chrome finish, dual tone interiors, and rear seating luxuries were important to their target group. Of course, the basic essentials of a car couldn't be compromised, but these aspects could tip the adoption of the SUV. Duster went on to capture 23% of the SUV market share within a year of its launch.
Now, it may have seemed counter-intuitive to think that Renault should have focused on chrome exteriors. Would the mvp version of the Duster have had this if Renault hadn't heard the consumer's view? Their riskiest proposition was how to differentiate their brand and create a volume driver. The company wasn't validating the idea of an SUV in the Indian market. For Renault, the operations, technology, and manufacturing viability had already been tested. However, for a new entrant in car manufacturing, the riskiest propositions would be many. The production team would have to validate many parallel aspects of the product, including the manufacturing, technology, positioning, and branding. Still, customers wouldn't adopt the car just because the new entrant managed to build the car against all odds. Customers don't care how we build our product. Customers care about the value our product creates for them.
This is where software businesses have a great advantage over traditional manufacturing industries. The entry barrier to creating a software product is so low. It is far easier (when compare to traditional marketing) to completely scrap a software product and rebuild it from scratch. It is so easy to create disruptive products with minimal investment. This is why Uber could so easily disrupt an existing ecosystem with a small team of engineers. So, we need to take advantage of that by ensuring that we are open to valuable feedback.
Product adoption depends on the value that a product creates for the consumer. It boils down to how the product appeals to the emotional needs of a consumer. Is it taking away a pain or hurdle that the customer has today? Is it creating an aspirational state for the consumer? Does it look visually appealing? Does it make it harder for them to use the product when compared to their current alternative? Does it add more work than the current alternative? Is it available easily? It is a matter of pride to own this product?
We may choose to solve one and only one problem for the consumer: a single end-to-end functional flow. However, this functional flow needs to deliver the maximum impact to the consumer. If we're pioneering food delivery, then maybe it's alright to not have 100 cuisines on display, but it's not alright to deliver food gone cold. However, in a competitive food delivery market, not having ample choices on cuisines could be a disadvantage and delivering stale food is disastrous. So, we need to be wise in choosing what our mvp should be.
Design, branding, content, positioning, pricing, on-boarding experience, and usability need to work on top of the underlying technology to drive an unparalleled experience for the consumer. We can create the Most Valuable Product by focusing on the impact we want to drive. We may be feature poor, but we have to be experience rich. Remember product technology cannot work in isolation.
We could also discover new ways in which customers will use our product. I recall an experience narrated by a colleague in one of my previous workplaces. Her team had built a solar power solution that offered urban migrant settlers electricity. The solar charging device could power a light and a fan and charge their mobiles. The solution also had a great commercial model in which ultimately the migrants could own the solar power device. However, when the team had launched the solution, they realized that the migrants rarely used the device for lights or fans. They were used to living in those conditions and were habituated to complete their cooking and other chores before dusk. They instead procured low-end second-hand TVs and used the solar device to power the TV instead. The customer value the business predicted was quite different from the value that the customers saw in the solution. Validation and feedback is equally critical when designing Impact Driven Products.
At a nonprofit organization, where I was leading the product team, we had started on a plan to redesign the fundraising platform. It was a web-based platform to crowdsource investments to help rural entrepreneurs. A significant number of investors were viewing our website on mobile. We weren't offering the best experience to them, since our fundraising platform was not mobile-ready. The website had been around for over 8 years, and had many functional flows and a lot of content. There were many options on the platform to invest or donate money to rural borrowers. We knew that a complete redesign of a feature-rich website was going to take forever. So, we planned an iterative approach. We identified the most visited pages on the website first using website analytics. The management stakeholder team had invested in fundraising as their Key Business Outcome. The combination of knowing which flows were frequently being used by our investors and which was the most important outcome for the organization gave us our most impactful part of the product.
We first launched a responsive version of the home page and a responsive version of our emailers. We then focused only on redesigning the core funding flow, chipping away at all the nonessential steps and reduced it to a two-step process. All other flows were not mobile friendly, but fixing this flow, coupled with the emailer content, ensured that when we sent monthly newsletters or payment reminders, our target group could read the email on their mobile and follow a link from there to our website's fully functional responsive funding flow. We could see a jump in our conversion rates and the number of investments increased quite significantly.
Now, this version of our platform was not exactly an mvp. We already had ample data to point us in the direction in which our target customers were headed. Being mobile ready was not something we had to test viability for. What we had to do was to craft the most impactful solution for our target segment. Again, redesigning the platform in isolation wasn't going help. We had to ensure that our end-to-end flow was geared for a mobile-first experience. Starting from the trigger of when the monthly reminders and newsletters were sent, leading on to the landing pages on the website, and following up with the core fundraising flow had to be orchestrated to ensure a seamless experience for the investors.
The limitations of a technology solution won't matter to the consumer. Even under the present limitations, can our product create value? Is there a market opportunity that can open up for a solution like this? If it does, then consumers will be willing to buy our product even with its limited functionality. Customers might be even willing to pay more for a solution that meets their needs.
The Innovator's Dilemma by Clayton M. Christensen explains why the 3.5-inch drive decisively conquered the desktop PC market. It talks about how computer makers had to pay on average 20% more per megabyte to use 3.5-inch drives and yet they flocked to use this drive instead of the 5.25-inch drive. This is because the capacity demand was met by the 3.25-inch drive, but a new demand was created now: the demand for smaller physical size. Once that was satiated, the next wave of demands around reliability and pricing came up.
Technology viability can open up opportunities and the potential for disruption, but market needs will drive competitiveness and differentiation. To respond swiftly to market needs, we need to exploit the flexibility that software development offers. We cannot assume that the market will appreciate the value of what we offer.
A product life cycle evolves based on how we respond to the inputs from the market. Every version of the product must address a non-negotiable core need of the market. Everything in the product must be about that core need. As the market need evolves (the consumer base expands or product adoption increases), the next wave of needs arises from the market. Products surf over waves of market demand until either the market demand reaches a tipping point or a drastic disruption in the market renders the product obsolete. Business intelligence is in, being able to watch out and prepare for those disruptions.
Going back to the case of ArtGalore, we need to evaluate the success criteria of the all the prioritized feature ideas. This will assist us to determine which of those will help us to create the most impactful product. Since we have already prioritized only the feature ideas which will have an impact on Key Business Outcomes, we can now focus on how to maximize the value to customers:
For ArtGalore, this could be about focusing on the ease of sign up for the art catalog, timing the newsletters (frequency, day of the month to publish, and so on), richness of content, ease in reaching out to the ArtGalore sales team for enquires based on what catches their eye in the newsletters, and so on. In case there is more than one feature idea, in the quick wins or strategic wins boxes, that needs to meet the same timelines/market-needs-driven milestones, we may have to slice through our success criteria to find the most impactful scope that we can deliver.
Needless to say, this is not a one-time activity that we do at launch. We need to follow through on how successful or not our efforts at maximizing customer value have been. So, we also need to set up channels for qualitative and quantitative feedback.