Sunday, June 2, 2013

Product Management: Launching a new product? First go get some customers

"We don't make it until you order it."
                       - Jack in the Box

Jack in the Box used to feature this slogan on their TV commercials.  It was meant to tell customers that their food is made fresh every day.  Software industry is not going to win any customer by making things fresh.  But there is a good reason why just-in-time manufacturing makes sense for software.  It is to avoid building something that no one wants.

It is easy to fall into the trap of thinking that we know what customers really want.  In most cases customers themselves don't know what they want.  They have a vague idea of what their problem is.  Sometimes the problem itself is not known to them.  Yet we software makers think that we know exactly what customers are looking for and will love our product that we are building.

Truth is that no one exactly knows what will work well in a real situation.  We all have guesses as to what could work, but our guesses are often too far off to be useful in its first iteration.  There are a number of odds stacked against any new product.

It will be the brand-new product, so it will be buggy and unstable compared to other existing solutions.  It has limited features so the way it can be used will have fairly narrow applications.  To top them off, it may not even solve the problem that is worth solving from customer's standpoint.  It may be solving a nice-to-have problem that users are not interested in paying for.

It is easy to make this mistake.  I have made this mistake a few times myself, and this is one of the most wasteful ways to spend precious company resources.  Creating a wrong product does not end there.  It creates a ripple effect to marketing, sales and sales engineering in order to see if there is any customer out there.  It sets up for fail-slow situation, something that you want to avoid as any entrepreneur.

So instead we should first find a few customers before we jump into building it.  When you have an idea of what you would like to build, first go talk to customers about it.  Don't feel bad that you don't have a solution that you are ready to hand over to customers.  Instead feel victorious when you identify a product idea that they are willing to spend their hard-earned cash.  By talking to customers first and selling on the product before building does a few things to your product:

1. Your market is never non-existent.

Guess what.  You already know who you are building your product for.  Unless you screw it up so badly that they won't use it, you will have a market of a few customers who are willing to try your product.  By selling first, you know who you should sell to, and get to find out solving what problem will likely get the return call from your prospects.

2. Customers can help you define how the product functions.

Having potential customers is different from having avid fans.  Software market (and other markets for that matter) is littered with products that are not solving the problem that user has in an elegant way.  They may get sold to several customers, but they quickly become a shelfware.  Having customers involved in the product design phase minimizes your chance of creating a flop.

3. You get a much needed initial customer quote for you to get the next customer.

The first thing that any good marketer will do when putting together a product launch is to look for a customer quote.  It is so much easier to get that quote if you had identified a customer who can use a solution that you just put together.  Getting the customer quote takes a long time and often marketing team has to settle for getting a watered-down quote that talks about the importance of solving the problem, not about the product.  When you ace your product development, early adopters will let you know by saying yes to those customer quotes.

Selling is a process of figuring out how to best help a customer.  If there isn't anything that you can do to help customer get better at what they are doing, then there is no reason for you to be talking to the customer.  When that happens, gracefully walk away and go knock on another door.

If you think you can build a successful product without doing this homework, then you are either a next Steve Jobs or someone who has time and money to learn the lessons the hard.

Learn from the one who learned it the hard way.  Get a few customers first before building your shiny new product.


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