So, you’re thinking about launching a new product for your business. In your mind you’ve started visualising what the product is and how you’re going to build it. You may be imagining how awesome it will be, how all sorts of people are going to come along and buy it, and how you’ll make an absolute killing from it.
Great ideas in theory, however, there are some unfortunate truths to really consider before you race out get started.
The popular tales about product development usually involve a couple of girls and/or guys hanging out in their garage or spare room, working together until they build something amazing and they make it big. While there may actually be a few successful products that were launched in that way, most of the time, stories like this come about through some romanticised spin on a company that is already making it big.
The sad reality is that most new products fail to make a significant impact at all.
In this post, we take you through 7 steps to include when coming up with a new product, so you don’t end up becoming part of those dismal statistics.There are many well-researched ideas available that help guide people through the valley of #productdevelopment doom. Be a #smartbusiness and avoid contributing to the 95% of new product failures. Click To Tweet
95% of All New Products Fail!
There are plenty of shocking statistics out there in relation to new product development…
- According to Harvard Business School’s Clay Christensen, about 95% of new products fail;
- A Nielsen study on consumer-packaged goods found that only 15% will still be around after two years’ time;
- Inez Blackburn of the University of Toronto determined that the failure rate for new products launched in the grocery sector is 70 to 80 percent;
- Fortune magazine found that, miserably, nine out of ten startups fail.
Thankfully, there are many well-researched ideas available that help guide people through the valley of product development doom. For example, most MBA programs in the world will take you through all sorts of analytical techniques you can use to evaluate products, markets, strategies and increase the likelihood of success. Well-resourced firms can invest millions on validation techniques including focus groups, market research, competitor analysis, etc.
However, many of the techniques are skewed toward existing firms with the financial backing to take risks on developing new products. What if you’re not an existing firm, or your business just doesn’t have the finances to
gamble spare on costly analysis? What do you do then?
Your goal, when coming up with a new product, is to do whatever you can within your means to increase the likelihood of success. So where do you start? What do you do? Where should you focus your attention and resources? Essentially, for most businesses, it boils down to one general idea: build products that people actually want. Simple idea, right? With this in mind, let’s go through a few ways to you do this.
7 Steps to Increase the Likelihood of Your New Product Succeeding
1. Focus on Solving a Problem or Fulfilling a Need
As product developers, in the comfort of our own minds, we tend to dream up all sorts of weird and wonderful ideas for things we can create and sell. As far as products go, they tend to fall into two general categories: a) products that people value, want and will buy; b) products that people don’t value, don’t want and therefore won’t buy.
Thinking about the second category, when a person doesn’t value a product, then it has no worth to that person. People will never pay for something that has no worth to them. A product in this category either doesn’t register in their mind at all or, worse, they see that product as junk.
So how then do you build a product that is more likely to belong to the first category? That is, how can you ensure that people are more likely to value your product and therefore want to purchase from you? This is a very hard challenge, as demonstrated by the statistics I mentioned earlier. There isn’t a guaranteed solution, but you can make life a lot easier for yourself.
Thinking about the general type of product you are considering building, switch your mind over to the types of customers that are possibly going to buy it. Now, think about life, in the context of your product, from the point of view of one of those types of customers. Why would they want to consider your product?
First, are they facing some sort of problem? That is, is there something about their life or their work that is creating a challenge or hassle for them? Would your product help reduce, or even solve, the problem? If so, would they then value your product more than simply accepting the problem? If that is the case, then you might be onto something. People tend to buy products that solve problems well.
Take for example the evolution of products for creating written material in businesses and homes, i.e. producing business documents, paperwork or manuscripts, etc. Back in the day, documents were created using parchment, pens, ink and human hands. Along came the mechanical typewriter and suddenly this solved the problem of writing documents by hand manually. Fast forward many years and typewriters are everywhere. However, they still have their issues. They are clunky, get jammed, can only type on a single sheet of paper at a time, simple spelling mistakes are hard to undo. Then, along comes something better, the personal computer and office printer. Suddenly, you could do away with the hard and noisy work of using a typewriter and fixing your mistakes with liquid-paper/white-out. You could write your documents electronically using word processing software, fix mistakes before they become permanent, structure documents virtually, and then print them once they looked ready on the screen. In this example, people flocked in their millions to buy both new products, first typewriters then personal computers, since they solved the problems that existed beforehand.
Ok, that takes care of problems, now onto needs. Next, think about your representative customer and whether they have some sort of need they want fulfilled. Perhaps it is a real, tangible need. For example, people need electricity to power their modern lives and so we all happily pay to be connected to our local utility provider. Alternatively, needs could be intangible. Take the case of luxury goods. Sometimes people just enjoy the feeling they get in their mind when they purchase a luxury good. The need people often fulfil with luxury goods are those of their own emotions. For example, a person might purchase a luxury vehicle over a basic run-about car because they love the feeling the beautiful, shiny, powerful machine gives them. Similarly, people often pay to go to a cinema to watch a movie over watching it in their own home because they love the feeling of the in-cinema experience with its big screen, big sound and social atmosphere.
A product that fails to solve a problem or fulfil a need, is a product that is likely to fail. So, do yourself a favour and focus your attention on these aspects. Crank up your own empathy skills and consider the world from the point of view of your potential customers. Think about your product in terms of the customer’s problems or needs.
2. Begin Building an Audience, Yesterday
Let’s go through a small thought experiment for a moment. In an ideal future, you will have loads of people buying your product. Why will they buy it? Because your product solves a problem or fulfils a need. Why will they choose your product vs other similar products out there? Because people know about your product and your company/brand and they decide they like you and what you offer over the competitors. For people to a) know about your product; and b) to like you and what you offer over others; people need to be interested in you. They need to pay attention to you. How do you get people to pay attention to you? You put yourself out there in public and generate interest. Once you generate enough interest, more and more people start paying attention and you begin building up an audience.
Most of the time, your audience is a group of individually, and physically separate people going about their own personal lives. If all goes well, they each tend to start paying attention to what you are saying, and they develop an interest in you. The audience forms, virtually. They have a common interest, you, and they are physically/logically separate. Sometimes, if you are able to, you get a fantastic situation where the interest becomes so strong that social groups start flocking together around you and your product. This is known as going-viral. A rare situation, but one that can generate amazing returns.
Either way, in each of the situations above, it is the audience paying attention to you that leads to some of them deciding to purchase your product. It’s all well and good having a product that solves a problem or fulfils a need. But to start providing value, people need to be aware of your product.
Getting to the point where you have a sufficient size audience to begin generating interest and sales is a long and slow process. Don’t underestimate it. Once in a blue-moon you might hear about a scenario of an amazing product and company that came out of nowhere, went viral, and grew to be an overnight success. However, this hardly ever happens in real life. The truth is that building an audience around your product and your company/brand takes time. For the average person just getting started, i.e. from a zero-interest, nobody-knows-about-you situation, expect a lot of work and effort.
Knowing this, you should really think about getting started on building your audience as soon as possible. No, scratch that, don’t just think about it, actually do it. Get out there in public and start doing whatever you think relevant and acceptable to begin generating interest in your product. It involves creating content, closely related to your product and industry that people will pay attention to either by reading, listening to or watching. It involves getting out. There are countless platforms and ways you can do this and the best choices depend on the characteristics of your potential customers. For example, you might be active on the internet, or in local face-to-face events, or visual platforms like tv and video, audio platforms like radio and podcasts, printed material like newspapers, magazines, etc. Use whatever works best for your type of customers. But most importantly, get started. The quicker you put yourself out there, the more people begin knowing about you and your product and, hopefully, start paying attention to you.
3. Keep It Simple
Even if you have a long-term, highly complicated product in-mind, start with something simple first. This approach is known in various ways such as minimum-viable-product, prototype. pilot, proof-of-concept.
The general idea is that once you have decided on which product that you think will solve a problem or meet a need for your target customers, start by simply creating something that can demonstrate a small subset of the product’s features.
Don’t go overboard and spend weeks, months or even years in your garage or spare room building the best product ever! This might be tempting, especially to people that really enjoy tinkering and creating, but it could take you down a rabbit warren with a dead end. In other words, you might end up producing a product that is absolutely amazing to you, but turns out to be of no use to anyone in the market.
So, to avoid over-engineering something and drifting off toward an unverified solution, start with something basic and small that demonstrates the underlying concept of your product. Once you have something that works, then comes the logical next step…
4. Get in Front of Potential Customers That Don’t Know You
As soon as you have something built that conveys the concept of your product, get out there and start demonstrating it to as many people as possible. Your goal is to begin validating your idea with people that are likely to give you relatively honest feedback.
The keys words there are honest feedback.
You might be tempted to focus your attention on people you know. For example, friends, family and colleagues. After all, it is a lot easier to strike up a conversation and arrange a demonstration with someone you are already connected to, rather than a complete stranger. The downside of this is that, most of time, people you already have a relationship with are likely to stay positive with you and tell you your idea is great regardless of how they truly feel. They have a stronger incentive to maintain the relationship rather than potentially crushing you with a hard truth such as saying your product sucks.
However, you want to be crushed. No, I’m not suggesting you become a sadomasochist. I’m simply saying that honest, truthful opinions are the best thing you can get in the early stages of new product development.
Ok, we’ve described the second part of this step, now for the first part: potential customers.
It isn’t much use holding conversations and demonstrations with strangers that are unlikely to be potential customers. At best, they might take the time to talk to you, even if they’ve got no idea what it is you are demonstrating to them or why it would provide value to them. At worst, they could turn out to provide you responses and insights that send you off in the wrong direction since they are completely unrelated to target customer type.
Now that you have these two concepts understood, your final task is to figure out where your potential customers are and how you can get in front of them. This itself is a whole new artform worthy of its very own episode, which we plan on covering in the future. For now, we’ll leave it up to you and your imagination. Just to get the ideas going, here are a few examples. Say you are developing a new line of herbal tea, then perhaps consider setting up a stall down at the local food or craft markets. If you are producing a new tool that builders would use in the construction industry, you might be able to get permission from a local trade supply store, and so on.
5. Gather Feedback and Learn from It
This is where the real magic happens. Once you have begun to get your product in front of people, it’s time to find out what they really think about it. There’s gold in them there folks, believe you me. All feedback is good feedback in the life of your product. Whether it is positive, neutral or negative, feedback is an opportunity to discover how to improve and refine your product.
Your goal is to get what is known as product-market-fit, a term first used in detail by Marc Andreessen, co-author of Mosaic, the first widely used Web browser. It basically means your product is a good match to the market you are targeting and delivers sufficient value to generate customer interest. In other words, you have built something that people will buy and get value from.
There are many ways to gather feedback. You can do it in-person, i.e. face-to-face, or you can gather it remotely, i.e. where you are in separate locations using some form of communication tool. You could use all sorts of mechanisms to ask for and obtain your feedback such as surveys, interviews, observation, focus groups, workshops, monitoring, and so on.
Ideally, you would obtain the contact details of as many folks as possible that offer to join in. That way you can follow-up with them as your product development journey progresses. Some of them may also turn out to be future customers and even product champions.
6. Start Selling
Asking for feedback is all well and good but even when you are getting positive results, it still isn’t guaranteed that you have a product that will be successful. The only real confirmation that you have a product that will sell is when people start buying it. That’s a bit of a chicken & egg scenario, i.e. you can’t start selling your new product until it is ready, but you won’t know it is ready until people start buying it.
One thing you can do while your product is under development is to offer it at the full price with a guarantee to get free updates until the first real version is released. Another thing that you can do is to offer people to join in as pre-sales customers or early adopters. That involves people providing payment details that get charged later, once the product goes to market. In both of these techniques, you are essentially asking people to open their wallet and part with their own money in exchange for your new product.
If people do agree to pay you for your product, then you are onto something and can get more feedback from them as actual customers. If they don’t agree, it is an opportunity to find out what they don’t like or what is missing and what would be needed for them to want to make a purchase.
One other thing to consider when selling your product early on is the price you set. Try to avoid giving reduced rates or discounts to people. That is, don’t be tempted to sell your product for a lower price than you expect to later just to entice people to buy. By doing so, you may only be validating that some customers will pay for anything at a low enough price, even if they are not true customers. You would rather have fewer real customers that want to pay the actual price for your product than more customers, some of whom only bought because you offered a discount.
7. Believe in Yourself
The last step we cover in this article isn’t so much related to the technical steps of developing your product as it is related to developing your mindset. For whatever reason, some people just find the whole product development thing a daunting task. The idea of producing something that people potentially won’t want and being told that your work isn’t something that would provide value to them can be quite confronting.
Sometimes, that little voice inside your head can say all sorts of silly stuff that ends up convincing you to give up on your product development journey. The best advice I can give is to listen to your own thoughts but don’t let them talk you out of continuing. If you’ve read this far already, you’re probably thinking pretty hard about developing your own product. For what it’s worth, believe in yourself and see your product development journey through to a point that you’re happy with it. Don’t give up when it gets hard. Don’t let negative feedback get to you. Look at everything you do and all the information you gather as an opportunity to make it just a little bit further. Each step will take you closer and closer to your goal, you just have to keep moving.For anyone involved in developing products: believe in yourself and see your product through to a point that you're happy with the journey. Don't give up when it gets hard. Just keep moving. #productdevelopment #inspiration Click To Tweet
Let Us Know What You Think
Do you have experience developing new products? Or, are you considering developing your own product one day? What do you think of the 7 steps described here? Is there any other advice you could share with other members of the SBG community?
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