What does it take to develop a successful product? This is the billion-dollar question. You can combine several factors in various proportions to innovate your next product.
Build Something Better
If you base your product development on something like Memetic Theory, which I discussed in depth in my last post, you need to focus on the popular and then model your product off of a current product and make it slightly better. This is where you see a lot of competitors in space, like SaaS offerings, which are very similar and have similar price points. Can you go wrong doing this? Going into an already crowded space with a better or cheaper product might work. If the switching costs are low, then it entirely possible that you can build a copycat, slightly better product, and harvest customers from other similar products. For example, if you look at the CRM space, while Salesforce is the most significant player, there are hundreds of other CRM solutions, from Agile to Zoho. How is it that there are so many CRM solutions out there? Even though they are all similar, they all differentiate themselves in different ways, even if, at their core, they are all about managing the sales and customer relationships.
A startup founder friend once told me that he would never launch a brand new business ever again: he would copy another pre-existing business model and just do it better. But, of course, these products also benefit from the pre-education that competitors have already done. It’s not hard to get customers to understand what you do if you are a CRM. People know CRMs.
What is hard is differentiating yourself from the rest of the market. So what makes you different and unique?
Build Something Your Customers Want
Suppose you base your product development efforts on design thinking. In that case, you do a deep dive into your current or proposed customer base and dig into their desires, then elevate your thinking to develop a product that meets (and ideally) exceeds their needs. To do this properly, you need to understand your target market deeply. What are their hopes and dreams? What do they want? And you can’t just ask them – you need to get into their lives and understand their pain points (or desires) and then solve for the pain. If you listen to what your customers tell you, you probably miss what they want. Many leaders realized that customers don’t know what they want – they have jobs to be done, but they don’t know how they should be done. This is where you come in with your product innovation expertise and develop the product which meets the needs that you glean.
This approach is not without its pitfalls. Dan Ariely famously showed that people would outright lie or omit essential information during surveys if they don’t know the answer – or represent themselves not as they are but as an ideal, aspirational self. This is why it is vital to ask your customers about their pain points and observe them in action.
Of course, this approach is also possibly problematic. Your solution may be too different, or it may not find a fit with your audience, even though it solves the problem. The more new and different your products, the more difficult it is to embrace, even if it’s a perfect solution to your customers’ problem. Humans are notoriously change averse and prefer to maintain a less than optimal solution unless you can convince them otherwise, which may be challenging.
Build Something New
This approach is the favorite of many disruptive innovators like Steve Jobs and Elon Musk. Musk especially looks at issues and suggests not solutions of today but solutions of tomorrow. So, for example, while the rest of us would complain about traffic in our cities, he founded a company to build tunnels to bypass the traffic. It’s a counterintuitive approach; who would think about boring tunnels when we could conceivably use the airspace – flying car style – like the Jetsons.
Unfortunately, we can’t all have the resources of an Elon Musk, who can make things happen by the force of his investments – developing disruptive new businesses without having to bend the knee to investors (at least initially) until the company has been proven to be viable.
This is the most dangerous path. But, while it has the most chance of failure, it also has the most upside. This is where the genuinely groundbreaking, earth-shattering, culture-changing innovations go. Would we all like to build products like this?
In reality, the most successful products include elements from all three ways. You need to build a familiar product that your customers can easily understand. Mimicking a pre-existing, already understood product, but then adding that deep insight from design thinking, and the visionary aspect from the Musk style-moonshot, will give your product the best chance of succeeding. You need that combination of
- Meeting Desires
To build the most innovative product. Tesla is a great example. A Tesla is:
- Easy to understand. You don’t need to be educated on what a car is. Everyone already knows what a car is.
- Fulfills desires: as more and more people desire sustainability and are concerned with climate change and zero emissions, they turn to electricity to address this issue and virtue signal.
- It was built on a vision of eventually moving entirely away from fossil fuels for not just cars but homes and anything else that requires power.
Think about your next product and see if you can blend these three aspects into its development. Or, if you are in the middle of the development process, could you be missing a piece?
Did you base your product more on a design thinking approach and minimize the vision or relation to what’s already there? If so, you might have trouble educating your customers on its value.
Did you base your product more on copycatting what’s out there and didn’t infuse enough customer input or vision to make it different?
Did you create a visionary new product without thinking about what’s already there or what your customer desires? Then unless you’re an Elon Musk-level influencer, you should try to infuse in those other elements before you launch.