As a product manager or an entrepreneur, you may come to a point when you decide it’s time to introduce a new product to the world (or your company may decide it for you). When it happens – it’s a magical moment. Your (future) customers – are going to enjoy a new product, a new experience or an additional value – that weren’t there before!
You run all the possibilities in your head. You imagine the joy of your users. Your head explodes with all those features that you are going to deliver. Can you feel the excitement?
You should be excited indeed. As an entrepreneur your journey always starts with an invention. But as a product manager you may pass a role or two (or more..) before you are handed the opportunity to lead a new product or initiative. So, when it happens – take this opportunity with both your hands and do your best NOT to screw up. My advice should hopefully assist you to stay out of trouble.
As noted in my previous post – your journey should almost always start with the ‘why’. If you were asked by your company to lead this initiative – you must make sure you understand why the company believes this product is needed and what is its unique value. If you came up with this initiative on your own – that’s great – but also possess additional risks – because it means you convinced someone with power in your company that it’s the right thing to do and the company is going to put resources on this based on your story. You are putting your name behind this initiative, so you’d better know what you are doing.
I don’t mean to scare you. This is still super exciting and great. You just need to take this seriously and make sure you take the right measures to reduce the risks to the minimum (well… you can’t really eliminate them. They always exist in new initiatives. Welcome to the realm of entrepreneurship :-)).
Ok. So let me help you.
Whether it’s someone in your company who convinced the board, or you’ve done so yourself (very remarkable if this is the case) you must sit down for a second and make sure you understand the theses behind the ‘why’. Yes, designing and launching a new product involves tons of steps, pitfalls and points you must consider and execute upon. I will cover those in later posts. Today I’d like to focus on the first step you must do.
So, what do I mean by ‘understanding the theses behind the ‘why’?
Most new initiatives & products rely on some hypotheses and assumptions as for why they will be successful. Those may be assumptions about evolving market trends, where the target users will find the value in this new product or how the future may look. No matter how confident you or your company are that those assumptions will become the reality, it’s crucial to stop for a second (or even a full day) – and to list them down.
If your company provides storage solutions and you believe customers will favor cheap & fast storage solutions even when they need to pay a 30% premium on that – well – that’s an assumption. And if you already have some customers who are knocking on your door asking for that and therefore you claim this is no longer an assumption, then I will claim that you replaced one assumption with a new one – and the new assumption is that those customers represent a big enough market of demand to your product.
It’s very rare that a new product doesn’t rely on assumptions, so be highly suspicious if you gave it some thought and came up empty. An assumption or an hypothesis are no longer such only if you have enough data to prove them and turn them into facts. 3-5 customers are not enough. Few articles you read on the web lately or a dozen of good feedbacks won’t prove much either.
Now, the reason I insist that you list down your theses about why the product is going to be successful is because I’ve seen enough times what happens when you don’t. I’ve seen entrepreneurs too often confuse assumptions with facts and embark on a journey that eventually results in a big failure because one of their fundamental assumptions about the market turns out to be wrong. You really don’t want to waste the resources, money and time involved in designing, building and launching a new product just to discover that the customers react totally differently than what you expected.
Ok… so how do you frame your theses about this new initiative?
Listen to this story:
I once went to an interview in a startup which just got funded and was very promising. The CEO introduced himself and immediately followed up with something in the spirit of the following:
“My business relies on 3 theses. Here they are:
- Nowadays, people are … [his observation about current market trends]
- In the very near future… [a thesis about how the consumer habits are going to change in the very near future]
- And finally… [another thesis about the short term future]
So – if you agree to my theses” – he continued – “then it’s very clear why what we’re doing here holds a huge potential”.
I liked this approach very much. It was clear, to the point and most of all – it was very obvious that if you accept his theses, then the unavoidable conclusion is that he’s working on the right thing and he’s probably gonna be very successful (if executed properly). So – all you needed to do at this point is to ponder whether his theses make sense to you or not.
Eventually I didn’t end up working there for other reasons, but I did adopt this method of thinking (which teaches you that you can also leverage job interviews to learn something new :-)).
Anyway – you should ideally aim for at most 2-3 major theses about why your product is gonna be successful. You may come up with more than three, but try very hard to narrow it down to those which if proved wrong – will practically kill your business. If, after thinking about it hard – you have more than 3 assumptions that you need to turn into facts in order to be successful – then you are somewhat in a tough spot. It’s either you can find a method to effectively and quickly get the data & signals you need to turn some of those into facts, or you are going to embark on a very risky journey, and I’d advise you to reconsider. Too many assumptions can easily kill your business.
The next thing you want to check is how far into the future your assumptions take you. For example – if you assume something about how the market is going to look a decade from now – then this is a very risky assumption to have. You won’t be able to turn it into a fact, and almost no one can successfully predict such a long term future. At most – you want to assume something about the very near future. Let’s say – the coming year, or two if highly stretched. Not more than that. Ideally – those would be hidden trends that are happening NOW and you just need to uncover them.
Let’s take a concrete example.
You are a product manager in a company that provides online courses for youth that help them improve their performance in high school and be better prepared for the college/university. The CEO comes to you one day and asks you to lead a new initiative to expand the company’s offering to elderly people as well. Great!
When you ask your CEO about the ‘why’ and the value he says that it will open a vast huge market, and that elderly people would like to learn new stuff too. The company has already proven itself to be successful with online courses delivery. They know how much it costs to produce such content, how much they should charge and how the overall lesson template should look like. “Now, go and figure out the small details… will you?”
On the face of it – this doesn’t sound too risky. Well… theoretically at least.
You decided to listen to my advice and spent some time listing down the theses behind this initiative. You came up with this:
- We know how much it costs to produce content for elders
- We know how much to charge elders for such content
- We know how to craft an online session to elders in terms of general template and course structure
- Elderly people want to learn new stuff too
- Online courses for older people represent a huge market
Ok…nice attempt, but the first iteration is not that great. Let’s refine it.
Assumptions 1, 2 and 3 are about the product and not about the market. The product is something you control. The market is not. You will deal with the product soon enough. This is the ‘what’. So don’t put the ‘what’ into your list of theses.
Assumption number 4 is most likely true, but it’s too general, and in fact it’s somewhat interleaved with assumption number 5. Both of them need to be combined in phrased in the following spirit:
“There is enough demand for online courses from 60+ years old people to represent a big enough opportunity.”
This will both force you to think about what is your definition for ‘a big enough opportunity’ AND to start profiling your target crowd.
Last – there is a missing assumption here, which may sound a bit similar to the third assumption but it’s not. I’d phrase it like this:
“There is enough content out there that can be transformed to online courses and is relevant for elderly people.”
So at the end of the day – we are left with these assumptions:
- There is enough demand for online courses from 60+ years old people to represent a big enough opportunity.
- There is enough content out there that can be transformed to online courses and is relevant for elderly people.
Where assumption #1 is probably the most critical as it can really kill your business if it turns out to be wrong.
Assumption #2 addresses your growth rate for the business. If it turns out to be wrong – you may not grow as fast as you imagine or even stall. This will directly affect your goals and KPIs.
This is the list I came up with after spending a few minutes on that. You can probably come up with a further refined list if you’ll spend a bit more. But you got the idea, right? (if not – feel free to feedback me in the comments).
Now the question is what you do next once you nailed it… Naturally the best next move would be to go over the list one by one and figure out what is needed in order to turn the thesis into a fact. Sometimes it will involve a deeper market research and collecting enough ‘evidence’ to prove or invalidate the thesis. Sometimes it’s just a matter of increasing the amount of signals you currently have. For example – if you have 5 customers who requested this, maybe you can get 10 more who will tell you that’s exactly what they’ve been waiting for. But sometimes, there is no escape but to build a MVP (minimum viable product) to test the waters.
HOWEVER… there is another approach all together:
There are those who’ll tell you – “Enough with the research! If you want to know if it works – just do it…”.
Indeed, stalling too much into the validation process of the theses can become time consuming and in some cases may even lead to ‘analysis-paralysis’. You don’t want to be there either. Time to market IS important.
So what do you do?
As always – the answer is balance.
Here is what I suggest – personally, I’d NEVER skip writing down the theses, because it will force you to look into the heart of your fears and be realistic about the risks that may await you. Then, after you’ve been truly honest with yourself and the reality – you need to examine each of the assumptions in front of you and make a decision – do you invest the time to turn the assumption into a fact OR you have enough confidence in what you know already to believe that by ‘just doing it’ it will be ok.
This way or the other – you are now marching into the new journey with your eyes open and not with your head in the sand.
As for how you design & execute MVP in case you decide to go this route – I’d leave this to another post as this one turned out to be longer than I anticipated 🙂
As always – feel free to leave remarks and feel free to share with friends who you think can benefit from this.
Until next time.