Spotting An Opportunity and Building A Great Product for Tomorrow’s User
Last week, four independent events, happenings forced me to look at this theme — how to spot an opportunity and build a great product for tomorrow’s user?
i. CEO of a startup incubator asked me if I could talk to his students & startups on “opportunities ahead”. This started me thinking about how to phrase the topic and what to cover.
ii. While reading Scott Galloway’s book, “The Four”, I began to understand the power of four key ingredients for innovation — cheap capital, removing friction from existing workflows, defensive “moats” for competition and “winner take all” metaphor better.
iii. I met a startup team working on a personal productivity tool and found they had not applied any product management principles to their new venture (they are in the process of existing their current venture which could not scale)
iv. And finally, I met with a young IITian founder, building a startup in the real estate domain, who had some useful ideas about offering “value” to his users but was not looking at how he would differentiate his startup versus the ten plus portals already existing
I also organized a meetup of some of the brightest tech founders in NCR area with half of them working on AI, ML, data science but did not find any of them articulating a savvy business plan and was energized to think about how their capabilities could be used for building new generation apps for consumers and businesses.
Product Management Basics
I told the folks at #3 on my list above that had they been reporting to me at a big MNC and came up with their “product idea”, I would have sent them back to the drawing board instead of asking them to go ahead and build. Why ?
· Who is the target user? They could not describe 3–4 specific persona of their early adopters and the top use-case for which the early user would adopt their solution
· What is their biggest PAIN? What is the top PLEASURE they will get? They had not thought about the core human psychology that drives product adoption.
· What is the current solution? They could not describe if the users were using any specific tools / apps / solutions and if there was a major pain to this. Manual juggling of calendars and commitments seemed to be their top target.
· What is the state of the competition? How Big is the market? Whats the innovation trend? They had done no research on current personal productivity vendors and their value propositions, growth rates, business models and challenges.
I stopped here as it was clear that the team had rushed to build, basis an idea that seemed interesting and the leader of the pack was passionate about. The others had not questioned him enough and there was no rigor on the business side of things.
(This is fairly normal pattern in the Indian startup ecosystem. I have myself been a victim of my own cool-aid in the past).
If you are not thinking of these issues while starting your new product initiative, you will be in trouble when the rubber hits the road:
Product Differentiation / Being The Best You Can Be
I spent a good 1 hour with the bright founder at #4 on my list above and asked him what is unique about his portal? Why would anyone visit his portal given there are (some) well established names in the real estate domain. His answer was “quality of service and professionalism” that his back-office staff would offer over traditional brokers. But the challenge I told him was to get visitors to reach him and his staff first!!
Clearly, the real estate domain is a big ocean. A deep red ocean with fairly small entry barriers (what does it take for someone to build a database scraping tool or hire a few folks to punch in listing from classified ads / portals?). So what should a late move in a domain do? DIFFERENTIATE.
Differentiate so that the user gets an experience and a solution that is so different and so much more value additive over existing solutions that it will cross any loyalty boundaries, brand recall boundaries and force people to try out and experience your offering. And shout out to their friends and family to say how cool this new upstart is.
How can you do this? Can everybody differentiate? Yes, its possible to find a unique differentiated proposition by looking deeply at the end to end workflow an existing product / product category addresses and picking up parts where there is opportunity to improve user experience 10x. The opportunity could improve could come from better UI, better technology, better integration, better service or a combination of these.
Early management consultants would study manufacturing operations in great detail and identify repeatable tasks where hand-off was taking maximum time (time and material study). Optimize this hand-off and the savings on the shop floor was maximum.
In software products, similarly, one needs to look at largest friction to adopt — too complicated to use, too much data, pain points (useability, trust, poor results, poor follow-up) and many more variables. Similar to existing (just like others) will kill the product before liftoff.
The other line of differentiation is to use contemporary technology and trends to offer novelty in an existing domain. Be the early mover on technology in a crowded market — something Apple did beautifully thru its journey — best in class hardware when others were saving on cost; introducing new hardware when others were tentative and going for simple integrations when others were vertical. If you can have a patent protecting your innovation in using existing technology / integrations, all the more better.
Whatever you choose, the new product in a mature domain must be “really new and really useful” to be noticed and get accelerated adoption.
I will try to pen down some industry domain and how one could go about identifying great product opportunity in the same over this year. Stand by.