When a company builds a product is an inherently strategic undertaking. It requires a balance of long term vision, short term responses to opportunities, and continual feature validation.
A product is a revenue producing vehicle that offers a clear benefit to a target audience. Maintaining product fidelity, and ensuring that your offering caters for the widest group of customers is of paramount importance.
The trouble is that most of your customers want the same benefit but also have very different ideas as to how that benefit should be realised. In a B2B world, one of the biggest competitors to your product is the in-house capability of the company you want to sell to. This is usually their IT department who may have built a solution to address their needs in the same space. How can your shiny new product stack up against the 'made to measure' system their in-house IT can produce?
In the initial days of building a product, you need to have at least one early adopter customer. It’s always a temptation to do whatever it takes to please this customer and create a valuable revenue stream, which in turn can be pumped backed into the product.
This temptation is a strong one as your product jostles for position in a competitive market. However over customisation and adding lots of new features is a symptom of the following:
- Lack of a clear product vision
- Missing or misaligned features
- Lack of a strong value proposition for the new product
- The product has not yet identified the most effective set of features required to deliver value.
The resulting product is a delivery and maintenance nightmare. The cost structure of such product models yields diminishing returns until it becomes bloated, expensive and worst of all, irrelevant. If you end up with customers wading through endless “features” asking “What is it?” or “What does it do?” or “Why doesn’t it do this?” it’s game over.
You need to create a 'minimum viable product'.
Great product characteristics
The following should be borne in mind when embarking on any new product initiative:
- Make your product flexible. Make a core product platform with an easy to use extension and integration capability. Avoid the need for lengthy implementation projects which inevitably lead to diverging product requirements.
- Make it robust and reliable. This almost goes without saying. It’s very difficult to make a case for a product that isn’t reliable and when that unreliability impacts core business processes.
- Upgrade it often. This means that all customers receive the same new functionality regularly, and there no divergence in terms of features.
- Make it easy to deploy. Ease of installation is key here, as the last thing a customer wants is a long and expensive implementation project before the benefits are delivered. Ideally it will update automatically on a browser refresh.
- Keep it relevant. Don’t add superfluous features for the sake of it, this is a sign that the value the product delivers and how is does so is not well understood.
- Make Total Cost of Ownership competitive. Unless your product offers something that is exceptionally difficult to achieve by any other means, the Total Cost of Ownership should be lowered by using your product.
- Don't become the IT department of your customer! Difficult as this may be, never put core product requirements from your customers directly into the product without planning how those features will be used by the rest of your target customer base. Learn to say no to feature requests that compromise the product vision. Don’t build bespoke software for any customer, as it prevents scaling of the business model.
- Re-Invest in the product. Always plough money back into the product. The long term upside of doing this is that you will create the dream product, ready for a large group of target customers. This is where the real money is made!
Great product capabilities
Your product needs a vision that builds on a combination of the following strategies:
- It delivers value at a lesser cost than a customer or a competitor can produce it
- It does something different from other products, that is hard to copy
- It evolves faster that the competition
- It equips your customer with better operational effectiveness.
Simply put, build something that does what it does well, and allows the buyer to get on with running their business. Ensure the product takes the hassle out of their business challenge, or it's not viable.
Great product fidelity
The value of a product is that it is built once and purchased many times. There is no single customer that can match the revenue generation opportunities afforded by simply installing one product in more and more customers. But getting new customers is tough, and usually you have to start with just one customer. How do we ensure that the customer is not breaking our product fidelity? How do we know that we are building something that is of value to a wider group of customers?
The number one role of product management is to ensure that we are building the right thing and that this is incorporated profitably into the business model. Doing product right takes discipline and persistence, there’s no easy route.
Product is a tough and high stakes game, there can't be any half measures. If you really have a product opportunity, do what it takes to build it.
It's important to recognise when you have a product and when you have a service. There is a blurred line, with many hybrid offerings, but if you plan to sell your expertise as consultancy don't try to build a product. Instead build a toolkit for your consultants so that they can get ahead of the pack and deliver that value quicker. A product will consume a lot of time and money, and if you have to un-build / re-build it for every consulting customer, then its no longer a viable proposition.
The old adage goes: “Good products sell themselves”, and this is the ultimate payback for doing the hard yards in understanding your customers' needs, building reputation in this domain and delivering distinct business value above and beyond that which is merely requested.