Product Development fails because individuals and teams ideate and design in vacuum anticipating the market needs but its success largely depends on various aspects of the delivery cycle. As a follow up of my previous article where we looked at some of the key challenges in Product Management, we now dwell further into the subject:
7) Understanding your Market – A major reason why B2B and B2C startups fail is the absence of a market for their product. While there are cases where Organizations have created a demand and market for their products where there was none on the merit of their marketing campaigns, validation is often necessary to build investor confidence and self-belief.
Whether your product is a need-to-have or a nice-to-have, traction plays an important role in proving there is a market for it. Additionally, your growth potential is limited if you’re a big fish in a small pond and hence, having a fair understanding of the market size is also essential.
Market research is still neglected primarily due to two reasons:
a) Organizations are hesitant to receive negative feedback and
b) its an expensive exercise
While the first requires some introspection, the second can be addressed to an extent through the use of tools such as Google Trend that tells you how a product is trending on the internet, Google’s Keyword Planner Tool which allows you to search for keywords to determine how many searches per month are being made related to the same etc.
There are also Social Media analytical tools used for performing brand analysis, managing campaigns, measuring engagement etc. such as Keyhole.co which allows you to search for hashtags and keywords on Instagram and Twitter, Buzzsumo.com which allows you to search for content with keywords, domain URLs etc. and others.
Performing market surveys and finding a list of potential customers who are willing to go from trial to purchase really helps. However in course of time, there is always the risk of realizing that Customer’s pre-launch opinions and post-launch behaviors may differ. What is important though is to understand what influences their buying decisions.
There is additionally the case where we introduce our product into a target market and then foray into others with separate strategies. In such times, from a product perspective, we have to ensure we preserve the logic and user experience with the benefits that come with it. Most of the design aspects should remain the same barring changes to the text and images to suit specific market.
8) Segmentation and Personas - To understand and target an audience, Organizations should segment their Customers based on demographics, gender, age groups, socio-economic status and other categories relevant to one’s Business. In most cases, 5 to 8 segments tend to work best and they need to be mutually exclusive. It serves the purpose of building specific personalized content for target groups in your marketing campaigns.
Creating Buyer Personas is an important exercise that needs to take place early as Product Leaders use them during the Product Development Life Cycle. Research through quantitative market surveys and qualitative customer reviews can help build Personas as part of your traction exercise.
There are various Data Analytical tools that can help in the above.
9) Keeping an eye on Competitors – A lot of Organizations pore over their Competitors movements and how they are getting ahead which is nothing but misplacing one’s energy. Since our competitors will never buy anything from us but the Customers definitely will, we should needless to say focus on them.
Our goal is fairly simple. It is not to keep track of our competitor’s every move but to collect information that helps us understand why Customers would chose them instead of us and likewise, act upon it. Information on their product lines, key focus areas, special offers and pricing strategies should be reviewed every quarter. Get a sense of what they are trying to achieve by analyzing who their product is intended for, what they excel at, where they fall behind, what their Customers pain points etc. are really helps.
The above stated Buzzsumo tool can be effectively used to perform competitor research. You can enter their domain URL and see what content of theirs is performing well.
10) Product Pricing Strategy - We focus on creating a great product, delivering an amazing experience and engaging a critical mass of users but the question on how revenue will be generated always remains. Before we touch upon a few monetization strategies, it is almost in all cases necessary to present the Customer with a basic free offering that lets them get a first-hand experience of one’s product, reap some benefits from it but most importantly, get them hooked to a stage wherein they don’t mind paying to continue their experience.
Mark Zuckerberg’s strategy towards monetization is based on three phases – build a great consumer base, increase engagement and then give Businesses the tools to reach those people. So, what is ours?
Following are a few Freemium strategies that have been used in the past:
1) Tier Access – A free for life Beginner level but other levels require payment. Examples are Duolingo and Mindsnacks.
2) Capped Usage – A fully featured free product but with a cap on the usage amount (i.e. up to 2GB) or time (i.e. there is a finite waiting period after certain usage before one can continue). Examples are Mail Chimp and Dropbox.
3) License Count – A fully featured free product but limited by the number of free licenses. Example are Microsoft and Autodesk.
4) Adverts – A fully featured free product but with Advertisements. Examples are YouTube and Spotify.
5) Free Trial – A fully featured 30 day free trial period after which a payment is required. Examples are Office365 and Norton.
6) Add-Ons – A lifetime free core product used as a foot in the door strategy but requires payment for add-ons. Examples are AVG and Skype.
7) Collaboration – The core product is free for life but it works on a shared revenue basis with 3rd party products. Examples are Google App and Amazon Music.
8) Edition – A fully featured free edition for personal use only but the professional and enterprise edition requires purchase of licenses. Examples are CCleaner and Qlik.
There are two other cases I would like to mention as a side note. One where the product is given at a concessional rate to students as an educational license (i.e Cubase and Adobe) and the other where there is a fully featured free product for use but one needs to pay for support (i.e Comodo).
11) The Agile Partnership – There are several reasons why Digital Product Development is coupled with the Agile Scrum Methodology and following are a few benefits of their engagement:
a) it propagates short iterative life cycles which reduces the time to market, an important factor in a competitive space.
b) it is flexible to scope change and releases are incremental
c) every User Story comes with a value proposition
d) quality is built in as it follows test driven development and hence, minimizes product errors
e) measurable results need to be shown at the end of 2 or 4 week cycles and hence, it is disciplined
f) it has short feedback loops so one can fail fast, learn quickly and adapt
g) it thrives on a culture of open communication, collaborative development and transparency
Mistakes Organizations make in Agile which affect the development of a bug free product include:
a) Diffusing Agile team members across multiple products due to resource constraints results in a lot of time wasted on context switching. Developers also do not thinking through their development task (i.e. all of the use cases involved) etc.
b) Team members overclocking due to workload results in fatigue and inferior quality of delivery in the long run.
c) Constant communication through Agile meetings with distributed teams ensures everyone is on the same page.
12) Other Key Challenges – Following are a few additional notes one could take into consideration in their Product Management journey.
a) Where applicable, it is best to commence with a phased approach where one develops a product for individuals (personal edition) and then quickly scales up to a professional and enterprise solution.
b) Ensure Technical Debt does not grow over the life cycle of the Product as this would hamper the velocity of the team.
c) There is always a frequent discussion around the most suitable architecture for your Digital Product and getting it right from the beginning would be ideal but truth be told, it is acceptable if architectural changes are made later as this is not transparent to the Customer and their experience but of course is associated with additional time, effort and cost.
d) Failing to build commercialization into your release by coordinating with the Marketing team often ends up in the Customer not being timely informed of a new feature release resulting in a wasted effort.
e) Every Backlog Item does not need to be converted into a User Story.
f) Product Leads must try to use their product at least for a couple of hours every week wearing the shoes of the Customer as a best practice.
g) Analyzing the risk of introducing a Backlog Items in terms of breaking existing features is largely under estimated by Agile teams and sufficient thought must be put into it by them.
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