Product Development
When Developing New Products, Sell First—then Build
Build it and they may or may not come
Looking back at some of the failed Internet ventures in the '90s, we often wonder what people were thinking. How could entrepreneurs have believed that "if you build it they will come?" As funny as it may seem now, this mantra has always plagued businesses as they set out to develop new products. It would be frightening to think about how much money has been spent on developing products that never sold. On the other hand, companies lavish enormous amounts of money on market research in order to justify the launch of a new product. Unfortunately, this research is sometimes performed in a vacuum and pays little attention to what will really sell.
Selling needs to be an integral part of product development
The product-without-sales syndrome can be avoided by tightly integrating the selling process with product development from the start. Most people would agree that product requirements should be sales-driven. However, it's important to recognize that those requirements are derived from imperfect information. That means that when they get translated into products, they often don't hit the mark. So the creation of a truly sales-driven product is an iterative process between sales and engineering. At each step of the way, the product features need to be tested to make sure that they produce the benefits for which customers will pay.
Keep your bottom line up by building as little as possible
It's always a temptation, on the part of both sales and engineering, to build more than is required. In fact, many products end up being much more complex than originally envisioned. That fact is that when people take ownership for something, they tend to do more than is required. That's not necessarily a bad thing, but the best products are developed under a constrained environment that promotes creativity. So if you tightly constrain the development budget and schedule, and sell as you go, you will end up with a better product that also maximizes your profit margin. Your product will be simple, easy to maintain, and hit the mark with customers.
Let your customers be involved in the process
Customers can be your best friends when you are developing a product for an existing market (or one that is related). Synthesize input from a diverse set of customers and add your unique market insights to guide product requirements. Of course, you will also want to sell the concept to new prospects and drive your product development based on feedback from new market sectors. However, your existing customers can keep you grounded in reality like no others.
Looking back at some of the failed Internet ventures in the '90s, we often wonder what people were thinking. How could entrepreneurs have believed that "if you build it they will come?" As funny as it may seem now, this mantra has always plagued businesses as they set out to develop new products. It would be frightening to think about how much money has been spent on developing products that never sold. On the other hand, companies lavish enormous amounts of money on market research in order to justify the launch of a new product. Unfortunately, this research is sometimes performed in a vacuum and pays little attention to what will really sell.
Selling needs to be an integral part of product development
The product-without-sales syndrome can be avoided by tightly integrating the selling process with product development from the start. Most people would agree that product requirements should be sales-driven. However, it's important to recognize that those requirements are derived from imperfect information. That means that when they get translated into products, they often don't hit the mark. So the creation of a truly sales-driven product is an iterative process between sales and engineering. At each step of the way, the product features need to be tested to make sure that they produce the benefits for which customers will pay.
Keep your bottom line up by building as little as possible
It's always a temptation, on the part of both sales and engineering, to build more than is required. In fact, many products end up being much more complex than originally envisioned. That fact is that when people take ownership for something, they tend to do more than is required. That's not necessarily a bad thing, but the best products are developed under a constrained environment that promotes creativity. So if you tightly constrain the development budget and schedule, and sell as you go, you will end up with a better product that also maximizes your profit margin. Your product will be simple, easy to maintain, and hit the mark with customers.
Let your customers be involved in the process
Customers can be your best friends when you are developing a product for an existing market (or one that is related). Synthesize input from a diverse set of customers and add your unique market insights to guide product requirements. Of course, you will also want to sell the concept to new prospects and drive your product development based on feedback from new market sectors. However, your existing customers can keep you grounded in reality like no others.