Product development comes with multiple challenges. Companies need to understand evolving customer behavior and new digital technologies to come up with a product that is intuitive, robust, high performing and providing a superior experience to customers. Apart from understanding the consumer, there are multiple other factors that product companies need to factor in before and after launching a product failing which there are higher chances that a product will fail. According to a survey by McKinsey & Company, on an average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted.
There are multiple factors that can lead to product failure. In this blog, we have highlighted 8 key considerations that one should follow to avoid product failure during pre launch stage.
1. Market analysis
Market research is all about the coherent way of data gathering, recording and analyzing. The data analysis could be about the market, competitors and the potential customers. Making it a vital step for any new product development. However, before you plan to launch a product or a service, a thorough research needs to be conducted in order to answer the following questions:
- Is there any product similar to your product in the market?
- Why should your target group go for your product over the competitor’s product?
- Is the market wide open or saturated?
- What is the size of the market?
At the initial stage of planning, you need to examine the market for a better understanding of the demand and how will your product fill the gap. As per a survey conducted by Forbes, “42% of startups identified the “lack of a market need for their product” as the single biggest reason for their failure.
Steve Jobs once said, “It isn’t the consumer’s job to know what they want.”
The market analysis might not give you an accurate result of how successful your product would be in the market, but it is one of the best ways to know what exactly a customer is demanding.
At every product development stage, research should be conducted so as to know all the key issues related to that specific stage.
Outlined below are few tools that can make market research swift:
- MakeMyPersona: After you answer certain questions related to your target audience, this interactive web tool can help you with generating a buyer persona. And also depending upon the information you have shared with the target audience, the tool will help you provide valuable guidance throughout the process of market research.
- Pew research center: A free tool used for research that helps in better understanding of the target audience and the market.The smooth interactive charts and the UI charts are one of the significant ways of revealing data.
- Nielsen MyBestSegments: A useful tool for understanding lifestyle habits of a demographic. With this information, one can plan a campaign or a launch and also have a knowledge of who all are the competitors in the targeted area.
2. Unclear strategy and Requirement:
A successful project will have a good beginning which will include formulating the strategy. There should be an extended document that explains the requirements clearly, generally known as a requirement document. This document includes the need for the product and its features and functionalities. It can be shared among the stakeholders so as to have a strong buy-in from their end. A vague requirement document will hamper the overall performance of the product hence impacting the profitability. Moreover, it becomes difficult to allocate resources unless business goals are clear and comprehensive.
3. Poor Design
Product design is a concept of transforming an idea into reality. However, a design must be developed keeping the end users in focus as they are one of the most important stakeholders. In order to have a user-oriented design for the product, one must go for design research. A key factor in the success or the failure of the user interface design would be of product usability.
4. Missing out on engineering best practices
However efficient time and planning are required for any product to be successful in the market. Companies need to have a clear vision which should be articulated to the technology partner as well. Product development can be a failure in case companies are not able to follow engineering best practices and Agile methodologies while developing a new product.
5. Poor project management
Every new product development activity brings new opportunities in the organisation. Hence making it one of the crucial activities that need to be taken into consideration. However, with opportunities comes risk, a poor management of project may lead to many disadvantages for the company in the near future. Now with more and more companies leveraging distributed teams, product companies are able to deliver products faster and cheaper.
6. Funding and Capital
Some of the ways to fund product development would be bootstrapping, venture capitals and crowdfunding. Many a times companies fall into the trap of raising a large sum of money without a clear strategy on investing it in the right direction.
7. Value Proposition
From conceptualizing the idea and transforming it into reality, establishing a sustainable value proposition plays a vital role in product development success. Due to a lack of proper value proposition, a user fails to differentiate your product from the competition. Companies should make the best use of time and money in order to understand a customer. In plain words a value proposition is a positioning statement which explains the following (a) how does the product solve the problem (b) who is the target audience ( c ) what benefits does the product provide (d) how does the product distinguish itself from the competitors.
8. Soft Launch and Test Marketing
Going for a valuable test market is a dubious issue for every product manager. In product development, one should follow an approach of a soft launch of the product. There are multiple advantages of adopting a soft launch approach. Some of its advantages are:
- Better geographical control
- Fast market penetration
- Testing the real customer experience
There can be multiple reasons for a product to fail at different stages. However, keeping in mind these factors can help a product manager avoid failure in the pre-launch stage. Stay tuned for Part II of the blog to understand the factors at multiple stages.
Read our whitepaper to know more about how to avoid failure at launch stage.