Who are you to build a great product?
Building a great product, are we? We all have been at this juncture in some form or the other. Starting from global organisations to startups to solopreneurs (like myself), building a great product is the starting point of any success story. But these starting points are different for everyone, and which is entirely demarcated by the tools and resources we have at hand.
A global organisation (and in many instances successful local ones) starts building a product with an existing brand(s) to support its launch and subsequent growth. This is the fundamental principle behind every successful range or line-extension story. In few instances, they build a great product from scratch in a true entrepreneurial mindset. There are no existing brands to drive growth. A brand name is obviously chosen, but the product has to perform at an exceptionally high standard. There is no existing brand and its equity to smoothen the rough edges.
For every early stage startup, the above scenario always holds true. But again there is an importance difference. Bigger organisations or corporates, spend millions (if not billions) on new product launches. At the top end of this spectrum would be pharmaceutical companies with significant, long-drawn out R&B budgets, regulatory approval costs, licensing and trademark development costs, marketing and advertising costs and channel strategy costs. FMCG / CPG is not behind, with significant spends to ensure continuous visibility, strengthen functional and emotional bonds, outsmart competition and drive loyalty.
One of the highlights of the article below analysing Coke’s marketing and advertising budgets is the following statement:
“Coke plans to introduce over 500 new products this year while repositioning many of its established brands. The formula changes and production costs here are insignificant. Yet executives still must spend billions of dollars to communicate those adjustments to consumers in the 200 countries in which it operates.”
By no means are any of these new product launches going to suffer from poor quality, but the focus of the spends is still using the existing equity of Coke’s portfolio brands to drive growth.
The whole startup ecosystem is obsessed with the concept of a Minimum Viable Product (MVP). In the true sense of the word, that is a product in its most basic form, and not having any form of medium or long-term differentiation. I am not a tech entrepreneur, but the single biggest myth that permeates the startup ecosystem is “having an MVP magnifies the chances of getting investments from VCs”. In reality, the opposite is generally, if not always, true.
This Y-Combinator blog post details out the classic erroneous thinking behind MVP, which in other words is one of the key reasons why startups fail:
It is important that I keep on highlighting the differences as I go along. Corporates do not follow the thinking and application process of building an MVP. This is also true even when a big organisation has an internal team focused on building excellent new products. Corporates have more time on hand, and they don’t have to rely on the startup philosophies of “failing fast” and “pivoting”. For a corporate, a viable product is one that can be launched and supported with millions of dollars of advertising spends. Obviously, it comes with a significant risk of failure, but the chances of success outweigh the risks.
A startup building a new product doesn’t have that advantage. For an early stage startup, in all instances, the risk of failure will outweigh the probability of success. This is also true for any solopreneur who is building a consulting / advisory business. Another key thing is the absence of unlimited funds. In sum, the cost of ‘not building’ a great product is higher for a startup even when you don’t spend millions building and marketing it. For a corporate, the cost is lower even when you have spent millions on building it and marketing.
For some, if not all, of the reasons mentioned above, building a great product requires a different approach from company to company and from startup to startup. There are underlying principles of excellence that remain standard, but there are critical differences:
- Not having money to burn should fundamentally rewire the product development process (by no means does this indicate that those who have millions are reckless) — the funnel of product development and its stage gates should be narrower and tighter
- Every successful product has some unique characteristics, but that is only half the story — unique characteristics need to transform into unique experiences, the absence of which is also one of the common pitfalls for startups — for example, a product that can monitor your dog’s temperature remotely may have some unique technical characteristics, but it doesn’t necessarily lead to any unique experiences
- Building a great product should not be driven by a grandiose viewpoint of life — the best products in history (both tangible and intangible) solve common and annoying life problems and then go one level extra. For an early-stage startup, this is one of the principle points of differentiation vs. a corporate body (for example, the whole fintech revolution is based on solving life’s most annoying problems, which is the complexity and confusion that comes with anything financial)
- A great product does not necessarily need to transform our lives (in some respect it is a grandiose viewpoint), but should be able to elevate the quality of our experiences one notch higher — the iPhone, Uber, any effective app, virtual banking, cashless payment systems, affordable and on-demand healthcare etc. are all examples that have excellent products as their backbone
- In 99 out of 100 cases, great products are not built by innovating around the edges.If you innovate around the edges, you may end building a holistic set of product-driven solutions or a whole ecosystem. This is also how brand and range extensions work, and also collaborations. Great products enable us to look at things in a new way. The first Bose speakers was one, and so was the first Kleenex tissue
- The discipline behind creating a great product is ‘not to fail’ — this goes against the common startup thinking of ‘failing fast and failing often’. Pragmatic and commercial thinking goes against too much failure. If you fail too many times, you take longer. The more failures happen at advanced stages, higher are the costs. Even after being one of the most successful product lineup in history, it took Apple 5 years to develop the iPhone X from concept to final product. Did they have their reputation and billions at stake? Yes they had, but for you it is your startup’s existence or solopreneur’s vision
An important dimension of strategy is a concept called operational constraints. It assesses the elements of a strategy that cannot be undertaken because the said organisation does not have the capabilities to see them through. In the case of product development, this operational constraint can be defined as the understanding of “who you are vs. what you can do”. Great products are born out of experience, passion, dedication, involvement, patience, discipline, persistence and focus. Yes those are lots of big words together, but if you are indeed applying them all you need to reduce your propensity for ‘cheap failures’.
