guest blogger product management

Why So Many Products Fail to Create Value

Guest Post by: Sherzod Abdujabborov (Mentee, Session 7, The Product Mentor) [Paired with Mentor, Dan Mason]

A story of one failure

The day we reached 200 daily users was a critical milestone – more a psychological one for me personally than anything else. Somehow it proved to me that we were moving in the right direction. We had built a platform tailored to the specific needs of the local market to connect small businesses with their customers – for restaurants to reach out to potential diners, for hairdressers to find people who want a haircut and so on. Local businesses paid us to be on our website, and people told us that it saved them time. Nine months later we put the project on stand-by (eventually sold it for a bit of money – can I still call it an exit?).

We started off as a platform for restaurants and cafes – think of a local version of Yelp. We quickly realized the importance of liquidity on both sides of the platform for our success. We had no clue about what “Lean” or “Agile” or even “Startup” essentially meant, but we spent most of our time out in the streets talking to our customers. I personally talked to dozens of restaurants and cafes to convince them to join our platform. We refined the message and added features important for our partners and users. Once we had a couple dozen big names, it was easy to convince the laggards.

We went into a frenzy and wanted to grow bigger. We changed the website to accommodate all types of businesses. Overnight, our website became a place for all the small businesses in town. We added support for two languages. We also started doing offline events. We started a blog section to write long posts about featured businesses. We started churning out features and adding new functionality almost daily. What a pace, what a velocity. Somehow, in the process we increased the time spent on building and minimized the time spent on discovering. We grew into a strange beast, a Frankenstein-like platform that targeted everything and everyone. The problem was that in doing so we stopped satisfying any single problem superbly. We became a so-lala product:

So-Lala [zo la la] – German word for so-so or meh

The So-Lala Product epidemic

Our story is not unique, of course. Similar stories have inspired new product and business development frameworks, thousands of articles, and numerous books. Companies simply ship too many poor products and features. Various sources mention different stats, but most of them converge on the opinion that the rate of new product failure ranges anywhere between 70% to 90%. Definitions of product failure vary, but I believe it usually means that either the product did not gain any traction at all, or it performed much worse than expected. One way or another, many of the products accounted for in that statistic most likely fall into the So-Lala category.

This statistic has been thrown around so often in the recent years that I personally got a bit desensitized to it. However, after having created and managed a  couple of So-lala products and feeling personally responsible for them, I started imagining the amount of overall wasted effort in the world of business. As a Product Manager and one day hopefully a Founder, I find it critical to draw the right conclusions and lessons from these experiences.

Let’s go Agile!

In the attempt to reduce waste and maximize the chances of success, many companies embrace Agile, at least on the surface. Agile is sometimes seen as a panacea to all product development problems. I have heard on multiple occasions about teams who feverishly adopted Scrum practices with all of its events and artifacts only to learn that their increased output has not been getting them really close to their actual goals. Well, I have been in such a situation myself. We followed agile but something was broken and I was not sure what exactly.

The third principle of the Agile manifesto claims that Agile practitioners should value customer collaboration over contract negotiation. Therefore, the processes and practices embedded in agile frameworks should maximize the customer value. So where is the problem?

The problem is in that we focus on output and not on outcome.

Although customers are mentioned in the manifesto, it is critical to understand the context of software industry in the years prior to the Lean revolution. Melissa Peri, Produx Labs Founder and Product Management Consultant, states in her talk about “the Build Trap” that when she asked the early pioneers of Agile about customer collaboration, they often noted that customers then very often were internal stakeholders who provided the requirements. It could be a business manager, sales or marketing manager, subject matter expert, or nowadays an Agile product owner. Now if we dissect all the processes that Scrum streamlines, it becomes obvious that Scrum and other Agile frameworks are very good at organizing and managing stakeholder communication – real customers could be one of such stakeholders, but customers are rarely at the center.

Source: Commons Wikimedia – Agile Project Management Framework: https://commons.wikimedia.org/wiki/File:Agile_Project_Management_by_Planbox.png

Customer value and discovery are not really the focus – velocity and output are. Another problem is that measuring output is so much easier than measuring the outcome. Yet it is outcome that we are expected to maximize. As Jeff Patton puts it in his seminal User Story Mapping book – “At the end of the day, your job is to minimize output, and maximize outcome and impact.”

Why does it have to be so hard?

Product management is all about managing uncertainty. Quick iterations help to reduce uncertainty but then it might take us a long time to build something valuable.  But waterfall development carries the risk that you will never deliver anything of value — over time that risk only increases, whereas in Agile it goes down as you iterate.

That said, after building a few products from scratch, I have come to understand that quick iterations alone are a very expensive and inefficient way to tackle uncertainty. We need an additional layer to Agile. Enter Lean Customer Development.

According to Cindy Alvarez, author of Lean Customer Development, Customer Development must happen in parallel to product development. For Alvarez, Lean is synonymous to ‘pragmatic, approachable and fast’. At the heart of the Lean customer development is testing hypotheses by uncompromisingly staying in tune with the customers. Agile must be coupled with Lean Customer Development to be effective – as the old adage goes, it is not only about building products the right way but also about building the right product.

Key Takeaways

– Agile is very good at streamlining the product development processes to maximize output

– However, it is critical to focus on building the right products and maximize outcome

– To ensure that our iterations are getting us closer to our goals, we need to understand customer needs and problems

– One way to achieve this is to do customer development in parallel to product development. It is this constant cycle of discovery and development that can help us to pragmatically tackle uncertainty.

 

 

About Sherzod Abdujabborov

SherzodSherzod is a Product Manager at HERE Technologies in Berlin, Germany. His product called HERE Geovisualization enables developers and businesses to create rich visualizations of geo-referenced data of any size on top of maps. Originally from Tajikistan, Sherzod moved to Germany back in 2013 to pursue his MBA. In his free time, Sherzod learns to code, works out, reads books and watches no more than one movie per week.

 

 


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Jeremy Horn
The Product Guy

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