Posted by & filed under Customers, Marketing, Product development, Startups.

Every year billions of dollars are wasted on producing and marketing products and services that no one wants. And every year thousands of startups fail to find customers for a product that at first seemed unique and valuable.

Over the past 15 years I’ve had the opportunity to work on 100+ new products and services with a lot of brilliant people in many types of companies. For a long time I couldn’t figure out a consistent way to turn new ideas into successful services that customers actually value. In every industry there seems to be a few people like Steve Jobs and Richard Branson who seem to succeed just by relying on their vision and intuition. But what about the rest of us? Is there a way to achieve better results? I think there is. Here are some of my thoughts on it.

So many ideas, but what to do with them?

How do you decide what is important, what are the features, who is your customer? If you’re at a bigger company, there tends to be more emphasis on things like trend analysis, focus groups, portfolio management etc. In a smaller company, things are usually not as systematic. But the way they make decisions is strikingly similar.

Take a look at the image below that illustrates the kind of discussion that I’ve heard in product planning or decision meetings over the years. I’m pretty sure that everyone who has ever participated in such meetings have heard some of them.

product development meeting

In product meetings, there’s a plethora of ideas, opinions and even data. But what to do with them?

To me, it seems that the hardest part is not how to come up with the new ideas. It’s actually more difficult to turn all the ideas, opinions and data into something that the customers actually want to use. After all, Facebook wasn’t the first one with an idea about a social networking service.

Let’s look at two different approaches for attempting to find great products and services. First approach is what I call here the old way of doing things. Surprisingly  it is still common both in big companies and startups. The second approach is the new way that has been advocated by people like Eric Ries and Steve Blank.

The old way:

“We know what to do”

In the old way decisions on what the user needs and what to do are done based on what the product owner, an executive or the decision board believes in. Whatever seems to be the most plausible alternative wins. This is a one-time decision and rest is just project management and execution based on the agreed timeline and budget. Customers may be involved in the final stages to check for usability problems, but the real – and only – test for the product is the commercial launch. Then the company can finally see if they made the right decisions months ago. They can only hope that everything turns out OK.

Old way of doing products

Many times product and services are not validated until the commercial launch. 

In other words, the old way relies on the assumptions that are based on insight and foresight from “wise men and women”. These are used to make an executive decision on the user need.

The new way:
“We don’t know, but we’ll learn from the customers”

Every product and service is based on certain assumptions like: who is the customer? What is their need or problem? What is the appropriate solution? How much the identified customers are willing to pay for it? What if we actually involved the potential customers through-out the process? Tried to validate our assumptions as we are building the product?

For example, we may have an assumption that people would like to get better pictures of their children when they are playing sports. And that they’d like to pay for such a service. These are pretty simple assumptions that you can easily validate by talking to real potential customers. That means not just your roommate, wife/husband, neighbor etc. At the same time, you actually get some really important insights on the real-life use cases. In which situation they have this need and how often? Are there ways/services/products that help them to do it now? What are the problems they have with the existing ways? This is not same as asking from customers what kind of product they’d need. Figuring out the solution to a validated customer problem is your job as a product developer. So, less guessing, more validated information you can use to build better products.

It’s important to note that talking to potential customers is not a one-time thing you do early in the development process. Also, it’s not something that you outsource entirely to an outside agency. You as the product developer need to hear it from the customer. Otherwise, it’s too easy to dismiss the data if you only see a dry summary of the user responses.

New way of doing products

You should continuously validate your assumptions and deliverables with the real customers that you are targeting.

Talk, learn & create your first advocates

All this should be a continuous dialogue where the product developer tries to learn as much as possible about the need, the suitability, and usefulness of the planned solution. This is nicely illustrated by the continuous Lean Startup “Build-Measure-Learn” -loop in figure 3. When you slice the work into short iteration, you can easily make product and business decision based on validated data, not just on the best guess of the decision maker. This way also pivots are easier without wasting much time and money.

As an added bonus, the customers you talk to will be your first advocates. When you launch your product, getting the word out will be much simpler, because you already have people that trust you, like your product, and think your product solves a real need.  That is if you listen to them carefully.

You can find more ideas on what you can do in various stages of development in Lean StartupCustomer Development sites or in my presentation.

Of course, this is not a simple recipe for success. You still have to have great ideas, make great design and usability, figure out a business model that carries the business etc. But this new way of developing products enables you to use your time, money, and expertise on things that actually matter to your customers.

— Topi Järvinen (twitter.com/topij)