According to Harvard Business School professor Clayton Christensen, there are over 30,000 new products introduced every year, and 95 % of them fail.
Stories of hardware and software products, from apple newton , Google Glass, buzz to pets.com are well known.
Apart from failures of launched product, there are many that don’t even see the day of light. This is a good drill down into the seriousness of this problem is.
I’ve had my share of being part of team when we knew it’s headed in the wrong direction. For many seasoned product people, this should not be surprise. For those who are new to product discipline, this post highlights 101 of success factors and a quick framework that I’ve synthesized called – DOOJ.
Let’s quickly define what typically categorized as a failed product
- A product that could not complete it’s life cycle.
- A product whose market share is solely based on first mover advantage, not enough network effects and being used due to lack of alternative with declining growth.
- A product that barely satisfies the core functional need to somewhat satisfaction.
- A product that failed to build a sustainable business model, in spite of best in class execution.
- A product that failed to create a brand, network effects or high switching cost.
A quick 101 of product success factors –
through quick primer on few factors that potentially positions the product for success:
- Timing – This, arguably, is one of the most critical factor in the product’s success. There are 2 primarily drivers for getting the timing right
a) User behavior OR user adoption of new technology ( e.g. apple watch, handheld devices, rise of telemedicine and communication due to pandemic)
b) A sufficient penetration of mature technology that increases product availability (e.g. – YouTube streaming on handheld, Google maps and GPS enabled handheld)
- Product positioning – One product can serve needs of many, at the same time, there are many needs of the same user. Hence, it’s important to have strategic positioning of the product by user segments and their core needs. A great positioning builds functional boundaries for product teams to focus.
- Value and price – Users measure the cost in terms of money and time. It’s the combination of cognitive load, effort to learn and switch behaviour to use the new product. As a general rule, for users to stick, shift or adopt your product, it needs to create minimum 3x the value of current solution.
- Product excellence – A product with a great design, great execution and highest utility contributes to a greater product success. While this is mostly applicable after the initial product definition, it’s hard to change the core focus after few iteration.
- Regulatory environment – A technology that promises a better world typically comes with a) significant, unproven or drastic change in user behavior and b) challenges the incumbent products in many ways. While many regulatory constraints help incumbent products, disruptive technology and environmental situation has bended regulatory policies.
- Technological inflections – Technological breakthrough could greatly impart the product success in 2 parts a) if new technology makes the solution significantly better, cheaper or faster b) if the new technology enables use cases that once through unachievable with a viable business model. e.g. reusable rockets enabling human space travel. OR mRNA COVID vaccine .
- Business model – After timing, most likely reason for product failure is not being able to build the business model around it. Choice of business model depends on type of product, industry and many more factors.
Reasons I feel passionate about building products that are not destined to fail
- User empathy – every time I am directly or indirectly involved in a user study, I’ve felt the pain users go though. Especially for millions of enterprise products users.
- Resources – I believe that framework led thinking should lead to better products with the same amount of resources.
- Opportunity cost – Cost of product failure for business and people involved is very high. I was once part of such product (Kin ). It’s morally terrible for team, damaging for brand and ultimately result in departure of good team members.
So, if we know what makes products successful, why do products fail? There are multiple reasons. In my opinion, not understanding the user needs and if we do, putting a process around to solve for it is the primary one.
The Desirable Outcome Of Jobs [DOOJ]- framework
This framework is highly influenced by the great writings of David Ulwick. According to David (paraphrasing), Outcome driven innovation (ODI) is a key to bring the products that excel at solving user needs needs. This also answers the ultimate goal of Innovation; which is to meet or exceed the unmet needs of the users.
My motivation behind this framework is; innovation driven product development is great but not enough because, product outcomes may not be among the most desired ones or many times, incomplete.
Quick thoughts on type of user needs
- Functional / Core needs – Users are employing the products to satisfy a central need. For e.g – a need for going from place A to B (transportation). This needs can be served by private (owning a car) or public (bus) or shared (uber) transportation.
- Emotional needs – A product serves the emotional needs when it provides something beyond its core value. In the above example, the aesthetics, interior design, handling are all geared towards emotional needs. In other words, how users feel when they use the product.
- Social needs – Many times, product are used for social signaling or to enable socially acceptable behavior. For ex, users will prefer electric vehicle to signal environmental consciousness. With functionality being equal, users opt for a product with strong or upscale branding to indicate the class.
- Peripheral / Complementary to core needs – Product needs to satisfy other needs that are complementary or required to meet the core needs. In the car example, safety rating, availability of charging stations etc. are the needs for consumption of the core product.
When users use the product, they expect core needs to be met, in a differentiated and better way than the alternatives.
So what is a desirable outcome? Users build expectations based on product’s value proposition around core needs. This expectation is a user’s metrics to judge the quality of the outcome.
A successful product is usually the one that meets or exceeds on the desired outcome metrics for core, functional, emotional, social needsFor e.g. a smartphone. Along with basic reliable calling, users measure the calling experience success with availability of Bluetooth calling, WiFi calling, HD calling, conference calling and much more. These “standard” desired outcome are the “cost of entry” or “table stakes”.
How do we go about finding the desired outcomes ?
I like to think the desired outcome framework in 3 parts –
- Vision alignment and analysis –
a) Identify the overall needs for product, feature or service. The starting step for any new venture. Key is to ask the right questions, align internal hypothesis to how users are trying to get their jobs done.
b) Rephrase and confirm the need – Users don’t always know or can articulate their needs. Many a times users think in solution space and talk about non-core needs. Rephrasing our understanding serves 2 purposes a) Users understand we are listening b) Bridges any communication gap.
c) Filtering virtual needs – Many times, product teams hypothesize user needs through wishful thinking. Users tend to project virtual needs. For e.g. It’s not a deal breaker to have few more milliseconds for accurate language translation OR translation model to translate poetry. Virtual or low value needs usually pop up when the core needs are met and there is not much room to add value. E.g.- 8k resolution monitor will not move needle on productivity.
- Strategic positioning –
a) Identifying the right customer segment – Align company mission with product strategy. From the set of identified needs, focusing on a smaller group of users makes validation and iteration easier. In my experience, desirable outcomes differ for different set of user segments for identical needs. E.g. an Ed-tech company’s approach will be different for audience with no available courses (discrete strategy), vs for audiences with unmet needs (differentiated strategy)
b) Headroom to add value – This goes hand in hand with customer segment in focus. Two primary considerations in identifying headroom are a) Total addressable market (TAM) and b) Demand curve in a particular segment.
c) Competitive value proposition – Most products have competition (direct of indirect) OR if they are first in the category, they will soon have competition. Strategically defined competitive product positioning helps users recognize the offering value. For e.g. a mountain biker will consider a bike with hydraulic disc breaks for high speed breaking (outcome) on unpaved trails
- Execution –
a) Measure and execute is the old mantra. With a shared vision and correct strategy to focus on, execution becomes mechanical. Many a times, execution problems are really strategy problems.
b) Define metrics for desired outcome – There are typically 2 metrics that a good product team monitors a) Product success metrics b) Anti-metrics (unanticipated user behaviour). However, metrics for desired outcome is usually different than product success metrics. For e.g. engagement metrics for a self-learning (nest) thermostat is not very meaningful. In fact, frequent user intervention for adjusting the temperature is counter to the value proposition of learning thermostat. The real desired outcome to measures is to reduce the energy cost of house heating and cooling.
c) Iterate – The first cut of the product is just a conversation starter. Velocity of iteration is the key to make the beautiful products. Quick iterations and measurement of desired outcome metrics is the real proxy of customer success.
Creating a value from a product and service is equal art and equal engineering. There is a always a tradeoff. Products that create the asymmetric value are the winners.