OK, so you have proved my first post wrong and have found a gap in the market. A user problem that needs fixing. It can’t or doesn’t make sense to be fixed through existing products so you are thinking about innovating. A brand new product.
All product books will tell us that the most important thing to look at is product/market fit. However, if you talk to business executives from large organisations that have been through it, they’ll tell you a different story.
So here are three other considerations, pieces of advice I have heard time and time again, that I want to share with you:
Beyond the cost of launching a product, you need to model out a few other factors into your P&L, including:
- Marketing/cost of customer acquisition.
- Cost of ongoing maintenance. Because as much as we think everything will be perfect, we will find holes. There will be system updates that we need to conform to and other things that were not considered or not relevant at time of launch.
- Cost of development. When was the last time you built something and thought, “Well great, we can’t improve that any more so let’s move on to the next thing?”
If you are launching something within a large organisation, there is a credibility consideration. Is this product to the level that our customers expect? Because guess what: They are not thinking in terms of MVP like us. They truly want the MLP (minimum lovable product). At best, this is disappointing customers. At worst, this is a serious reputational risk.
Most new products don’t work, so you need the ability and cost of shutting something down if it doesn’t work. And that is the point of trialing things. That is the true “failure” that is worn as a badge of honour in Silicon Valley. It’s failure for the sake of it. It’s the emotions of having built something you believed in and it not having met expectations. It’s hard, it takes explanation to the few customers who did believe in it, and it may have a financial cost. (Thoughts and prayers with Google , which has 275 of these.)
This isn’t to say that we should never build new products. We need to build them thoughtfully and with consideration to the risks involved. It’s better to have answers to these questions ahead of time than it is to realise them too late.
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