The risks and drivers change with product idea type – understand the differences and adapt project execution
Product development should adapt to the nature of a new product idea. Is the new product essential for sustained profitability or in response to competitive pressures or to meet known customer needs? Does it create a breakthrough step function differentiation or create new market segments and product categories? The risks and technology drivers in each case are different and the product development process should account for the risks, product requirements and milestones associated with type of new product. In this article we will discuss different idea types, their drivers, risks and strategies associated with project execution.
The nature of new product ideas
New product ideas fall into three broad categories, as described below;
Evolutionary product Ideas:
Majority of the product ideas fall into this category. Every product goes through revisions in its life cycle to continue deliver the promised value. These products are necessary for sustaining the profitability of the base product.
Evolutionary Products ideas are driven mostly by economic and competitive forcesinvolving the need to provide incremental value – to make it better or cheaper. Perceived value must be sustained with new features or modified features for added novelty and adapt to changes in jobs to done.
An evolutionary idea is usually lower in market risk but higher in development risk. These projects usually have firm deadlines and very high expectation for quality and performance. Market risk however is quite low as the customer base exists and market fit established.
Focus execution on development particularly mitigating schedule and quality risk. The primary customer for a minimum viable product (MVP) could be the internal like the quality department or supplier onboarding process. To manage schedule, understand your critical path and reduce schedule risk with necessary actions. Some techniques to manage schedule risk is to dissect the critical path items to its components and eliminate non value add items, outsource non critical items and pull ahead any tasks possible.
Revolutionary product ideas:
These ideas produce breakthrough, large discrete step change in performance or value delivered. An I-phone revolutionized the telephone. It utilized simplicity, technology and design to revolutionize the telephone.
These ideas are driven more by technological forces involving new ways to deliver a job to be done using new technology. ‘Connecting the dots’ is a classic example of this where a new technology introduced in another solution is applied to unrelated product to create revolutionary change.
Revolutionary changes have development and market risk. Schedule, quality and technology risks can come into play in varying proportions depending on individual products. Performance of new technology in the application should be tested and customer value assumptions validated. These tests will be key to meeting launch schedule which may be tied to current product life cycle. There is always some market risk as the new technology is new to the solution. Hence, MVP validation is required with current customers.
Focus product development on technical solution and usability validation. New technology imposes technical risk. Mitigate it with targeted quick learning experiments. Manage product requirements by identifying key usability differentiators and conducting minimum viable product validations on users starting with the most important differentiators.
Disruptive product ideas
Disruptive products often appear in mature markets where a product over serves the needs. As products evolve through evolutionary changes, it gets complex. User needs range from basic to sophisticated, and when a newer simpler solution emerges the basic users shift. Newer technology also, unlocks opportunities for combining new jobs to be done in one simple solution, creating new market segments, and product categories.
Disruptive ideas are driven by technology and social trends. They usually offer fewer features but utilize current technology to deliver usability catered to current social needs.
Disruptive ideas have huge market risk. The problem and solution are a hypothesis requiring several rounds to validation. It is good to fail fast to save time and effort. There is little development risk till the market risk is mitigated.
Focus product development on market fit. There is room to fail many times, the sooner you fail, learn and pivot the better it is. Test your solution with MVP of the value proposition. Keep iterating till you have something to sell. To make it mainstream you have to cross the chasm from early adopters (those that embrace new technology) to early majority customers and that is when you know you have product market fit. You are likely to have significant funding and resource risks till you reach market fit.
Role of product manager in ‘fuzzy front end’ of product development
A good product manager will work on a range to product programs ranging from evolutionary to revolutionary and hopefully at least one disruptive. Most projects start off as evolutionary but constantly push the envelope and nudge towards revolutionary. And be on the lookout for a disruptive idea. Ideas are hard to come by and there is no magic bullet to find disruptive ideas. However, you can understand how ideas are born and learn the ability to see a great one and capitalize it .
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Learn more about what methodologies & tools to use for revolutionary vs evolutionary products in more depth in the below presentation.