Testing the feasibility of a product idea
The product development cycle is an iterative process that covers a wide range of stages, from concept and design to prototyping, testing, and finally creating a market-ready product. It is a complex cycle that requires a deep understanding of the product’s purpose, target market, and other factors that can impact its success.
We observed that when steps in the product development cycle are skipped, it often leads to overspending or unsuccessful launches. Some apps don't resonate with their intended audience because the founders didn't interview potential users. Some lack a well-defined vision and fail to explain why they should be installed. We also saw cases where an app with great potential was simply published on the store without updates or promotion.
We believe our experience can help startups and SMBs to get better results in organising product development and marketing. To share what we've learned, we wrote an overview of a product development cycle that has proven to be useful for our clients.
Here is the complete list of steps in the product development cycle:
In big companies, the product development cycle involves many departments, increasing the chances of creating a successful product. For startups and SMBs, who have fewer resources, it’s essential to be aware of all stages of the product development cycle beforehand.
In the first article of our series, we'll explore how to prepare for assessing the potential of a product idea.
Product development begins with an idea. It may come from a problem you or others have experienced. But before launching any product, it's essential to determine if the idea has any potential to succeed. During idea validation, you must determine if the problem is correctly identified, who the target audience is, and what the ideal solution to the problem is.
Let's take a closer look at the stages an idea goes through during its validation.
Ideas are the foundation of any business. It can be something completely novel or a variation of existing services. For instance, the phrase “An Uber for X” is widely used to describe quite a bunch of startups.
Ideas can wildly change, so it’s best to keep things flexible.
A vision is more specific and action-oriented than an idea. It outlines what could happen if the idea is successful and has an impact on many people. Visions are also very personal, as they reflect the values and beliefs of the people who created them.
All this gibberish about “building a better world” from the Silicon Valley TV series is an example of poorly written visions. It does, however, manage to convey that visions are about transforming the current situation. A vision should clearly explain the ultimate goal of your product and company.
Revolut aims to expand the global economy. Tesla envisions a solar-powered world with minimized carbon emissions. Bolt hopes to construct cities for people, not cars.
The vision is always in the future. However, your product strives to make it closer to the present, tying up your idea with a desired outcome.
Before diving deep into turning an idea into reality, it's vital to research the target market. Analysis helps to understand existing trends and which practices are perceived as the best.
We recommend finding direct or indirect competitors and analysing elements of their offers. This can provide inspiration and help you understand which elements resonate with you. Additionally, it's a good sign if similar products already exist. A truly unique idea can be risky: it may not get traction easily.
Apart from competitor research, you need to analyse and segment your target audience. Gaining consumer insights through surveys, interviews, or observation can significantly impact product positioning. For example, if your target audience is mainly startups, you may be able to take more risks with your design and marketing than usual.
To ensure your revenue goals can be met, evaluate the size of your target market. Calculate Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM). You can find formulas and more information here.
You can test the potential of your idea by creating a Proof of Concept (PoC). It's a low-cost, small-scale version of a future product that demonstrates its key features. For instance, it can be a simple sketch on paper that illustrates core interactions. However, a Figma prototype is a more popular option.
A Proof of Concept (PoC) is a valuable tool that reveals how people react to an idea and if it's worth pursuing. It can demonstrate potential value to potential users and aid in decision-making. Additionally, it is an excellent way to assess the practicality of an idea by enabling experimentation and refinement.
To ensure your idea meets the needs and motivations of potential users, you should study your audience. User research yields invaluable insights for creating product artefacts. Even if you can draw on your experience to create user personas or workflow ideas, talking to your potential audience will help to refine the results.
Any method of user research requires answering to at least two questions:
User interviews are a popular choice among user research methods. Ask people about their current solutions to the problem you intend to solve with your product, whether they view it as a problem, and what they would be willing to pay. To gain the most value from the sessions, it's best to prepare a list of open-ended questions.
A value proposition explains why users should choose your product. It should outline product benefits and how they stand out from competitors, providing a compelling reason to switch. It's the key selling point that sets the product apart.
There’re numerous frameworks you can pick from when creating a value proposition. For example, Steve Blank’s XYZ or Clay Christensen’s Jobs to be Done (JBTD).
Before selecting a framework, it's best to create user profiles and a value map of your product. We recommend filling out the Value Proposition Canvas for each segment of your target audience to ensure your product meets their needs. This will help you make the most informed decision.
It also serves as the first step in testing your idea for initial Product-Market fit. When you start finding customers, you can compare their behaviour to your expectations and adjust user profiles and a product value map accordingly. This may require revising your value proposition or creating additional value propositions.
After you finish with the value proposition, it’s time to compile all the info you’ve gathered and create MVP strategy.
Before investing time and money into creating a product, it’s important to test the market's interest and validate the idea. One way to do this is by creating a pre-launch landing page with an email form to capture potential customer interest. This landing page should provide an overview of the product, its features, and a form for potential customers to leave their contact information. This will help you gauge the level of interest and determine if the product is worth pursuing.
Allocate an advertising budget of at least $300 and run an ad campaign for one or two weeks. This will help gauge the market's response to the product and provide feedback to refine and improve it before launch.
The results of the ad campaign can provide valuable insights into the market's response to the product. For example, a high number of visitors to the pre-launch landing page and a high conversion rate of visitors to email sign-ups may indicate that there is strong interest in the product. Conversely, a low number of visitors and a low conversion rate may suggest that the product is not resonating with the target market.
It’s important to consider feedback from potential customers. They may be interested in the product, but they may have suggestions or concerns that need to be addressed before launch.
The information you receive on this stage is essential for the final stage of idea validation, which compiles the stage results into one document.
MVP product strategy unites the results of prior steps in one document. It should serve as a guide on a way to check your product hypotheses. And it’s almost inevitable that the strategy will experience shifts back and forth, so version control tools can come in handy.
The Business Model Canvas is quite good as a starting point. It outlines a high-level plan for making a profit in nine key points on one page, as shown in the image below.
Of course, there’re tons of other frameworks helping to describe business models. For example, a Saleforce’s V2MOM. Just pick whatever floats your rubber duck.
Add to that the results of competitive research, outline your product goals, and it’s time to move onto the next step – product design. It’s essential to ensure the product looks, feels, and works as intended before launching it. To accomplish this, you’ll need to create design specs, develop a prototype, and test the product. We’ll cover this in the following article.