How Do You Know If You Are Creating The Right Product?

You may not know for sure if you are creating the right product.

As you start up your business, uncertainties are bound to happen. The uncertainties which are not part of your initial plan, can negatively impact your business. These are risks. I have found the best way to deal with these is to use a 3 step approach.

We have discussed the approach and timeline risks in a previous post. As you remember, I bucket risks into timeline, product and budget. We will discuss product today.

Let’s level set a bit. Product can be an electronic or physical product or a service that is packaged as a product.

What I don’t generally include in my entrepreneurial discussions are the self-employed. There are quite a few who don’t consider the self-employed entrepreneurs and neither do I. This may help explain why only certain services are easily bucketed as products.

There’s a lot to think about as we transition. Product is probably one of the things you have the most questions and concerns about. And I think that’s good to a certain degree.

We do want to move ahead but we should ask ourselves questions about the product we are developing for our targeted audience as we move along. And not wait until after we have launched the product.

And just as there are differing views on including self-employed in entrepreneurial conversations, there is also a difference of opinion on what comes first: product or market.

I actually think a lot of us develop and decide the two in parallel. Sure some of us will say “I want to serve women” but then we think: “How would I do that?” and the product discussion begins.

The product could also be the first thing to come to mind. For example, if I want to sell yearly planners I probably imagine who would buy my planners. This helps me with product development and design. There’s naturally a back and forth discussion between “for whom” and “what”.

The back and forth will probably take time for your first product. But what if you have it wrong even after all the back and forth?

What if the product we create is not something our target market wants? Spending time and money on a product would be a major setback if our market won’t buy it.

This is a possibility and so it’s a risk.

So after we identify this risk, we need to analyze it. Just like we do for any other risk.

I think we would agree that zero or low sales would be highly impactful. Now, let’s ask ourselves if it’s highly probable.

How do we know the chance of not selling enough products?

How could we possibly know that? And if we don’t know that, how do we respond to the risk itself? How would you respond?

For situations such as these, the best approach is to test our product on our target market prior to spending a lot resources on the launch.

This is mitigating the risk because we would not only test the product but also make adjustments based on feedback received. This iterative approach decreases the probability of our risk and increases the  chance of providing the desired product.

The actual testing and revising of your product will vary depending on your product. But here are some of the questions most of us can use to help identify, analyze, and respond to risks related product development:

• Will she pay my price?
• Is this something she will tell her friends about?
• Will others be willing to sell this product for you?
• How much will it take to sell your product? Time, advertising, etc.
• How will you know before you do a full launch, that this is what she wants?
• What have others who make similar products learned?
• What assumptions or guesses have you made? Especially in regards to what your target market wants in terms of features, benefits, and quality?
• Are their tasks that you have no control over because someone else is doing them?
• Are there any components of your finished product that seem to be hard to make?
• How much technical knowledge is needed vs. how much do you have access to?

To help with product risk, you can get more details and your copy of the risk register worksheet. Please let me know if you have any specific questions about the product risk.