Making Great Products — From Idea to Hypergrowth

The most successful companies in the world all have one thing in common: a great product (or products). Some companies get moderately successful with great marketing or sales and an OK product. However, the truly massive successes such as Google, Facebook, Amazon, Netflix, Tesla and Apple all reached escape velocity with very little marketing because their products were so great they marketed themselves through word of mouth and organic publicity.

There is no single, perfect way to approach product. It depends on a lot of things such as industry, the type of problem you’re solving, and the type benefit the product provides. There are few axioms (universal truths) though.

In this article we will cover the universal truths first and then we’ll cover the nuances.

1) Great products solve a significant pain or provide significant pleasure.

“Take a human desire, preferably one that has been around for a really long time, identify that desire and use modern technology to take out steps.”

— Ev Williams, Founder of Twitter

In the case of pain (quantitative benefits), it can usually be quantified and should provide an order of magnitude benefit. For example, Uber made it 10 times easier to get a taxi and made it 10 times faster for the cab to arrive. Before that, you had to make a phone call, spend 5 minutes talking to a dispatcher, and a cab would arrive maybe within the hour. Now you can hail an Uber in  seconds and they’ll usually be there in 5 minutes.

 

In the case of pleasure (qualitative benefits), it’s harder to quantify, such as how Facebook improved the lives of billions of people by making them “feel” more connected. How much better you feel is much harder to quantify. But the magnitude of pleasure people get can be measured by how fast the service explodes due to networks effects, word of mouth, and organic publicity.

2) Great products are intuitive and delightful to use.

“Any product that needs a manual to work is broken”– Elon Musk

This sounds obvious, but it’s a lot harder to do in practice. Examples of very intuitive interfaces are Google Search and the iPhone. Google revolutionized finding information with the simplest possible interface: a white page with a giant search box in the middle and one button. Just type what you want to know about and within milliseconds they have millions of results ranked by relevance and authority. The iPhone is so intuitive that toddlers can learn how to use them before they can even speak.

How do you create intuitive products that solve a major problem or create significant pleasure?

There are many models for how to approach this and it often depends on the industry, the stage the product is in, and what problem you’re solving. But here are some general guidelines.

1) Identify a need.

A need can be a problem, a desire, a better way to do something, an inefficiency, something people will want, but don’t even know they want. The need can be mental, emotional, or biological. It can be a business need or a personal need. I think the biggest difference in how to approach product is whether or not you’re solving a problem for consumers or businesses. The benefit is the same at a high level: make people happier by making something in their life better. But the implementation and decision making process is vastly different.

Businesses only have 1 need: Increase shareholder value. This manifests in two ways: increase revenue and profits or decrease costs. And there are many ways to do that such as increasing customer loyalty and referrals, increasing customer value, decreasing customer churn, or increasing new customers.Now, where it gets more nuanced is that people within businesses don’t always act perfectly rationally. There is emotion, fear, elation, and personal gain involved at the personal level of the decision maker. The psychology of enterprise sales is a whole topic on its own that we won’t get into here. But at the end of the day, in general, businesses make decisions that will increase shareholder value in the long term. So products need to address how they help with that single goal.

Consumers also only have 1 need: Maximize pleasure.  This also manifests in myriad ways. It’s a lot more complicated than business transactions where a return on investment can be measured. The fastest way to increase pleasure is to remove pain. This can be mental, emotional, or physical pain. The removal of pain, the relief that you feel, is a form of pleasure in my view. The pain can be a nuisance such as having to wait an hour to get a taxi. Or it can be acute like a migraine. Anything that we don’t like, I consider a form of pain.

Increasing pleasure while related to the removal of pain, can also just be taking you from a normal state to an elated state. It doesn’t have to be something you even notice as pleasurable, such as using Facebook. When using Facebook — although some are starting to debate this — people feel happier, more connected, and this is a form of pleasure. Both approaches can result in great products.

The way to identify a need is pretty straightforward. It’s the execution that gets complicated.

Finding a need usually starts with an idea for a better way to do things. Often it’s based on our own experiences: “I hate having to call for a taxi” or “I can’t find jeans that fit my thick legs” or “Doing my taxes is a nightmare.”

There has to be a better way.

Then you start to think about how it could be better. This involves analyzing the problem very deeply.

You can start by talking it through with friends, family or colleagues to see if they agree with your premise and any ideas you have for a solution. Look online to see who else is trying to solve this problem. You will very, very rarely be the first person to have an idea. It will be the execution of the idea that wins the day. So first see what other people are doing to solve this problem and see if your ideas are even better. If they aren’t better, you need to keep digging or find a new problem.

Never build a product that isn’t better than everything else out there.

Otherwise, what’s the point? Me too products or marginally better products never reach hypergrowth. Be honest with yourself and truly reflect on whether or not your idea will blow the incumbents out of the water. If not, get back to work. Being better can be very simple. Often times the incumbents got lazy and stopped innovating and just making a much better user experience, removing steps, or taking a more novel approach is all that’s needed.

The products that truly disrupt make something at least 10 times better. Whether it’s 10 times faster, 10 times cheaper, 10 times easier, 10 times more fun, you have to have a major, game changing benefit to get people to switch. Otherwise it’s too much effort for people and isn’t worth the hassle to switch. If you can’t determine if you’re product makes something 10X better, you’re not ready. You need to keep researching, brainstorming, and digging to find a way to make whatever problem you’re solving that much better. Or do something else.

2) Test your hypothesis by talking with your potential customers / users.

Once you’ve determined a way to make something 10X better, then you need to test your hypothesis. This involves getting to know your target customer or user. Often this involves identifying your users’ “personas” which is just a fancy way of saying target users. Google the word “personas” to find lots of guides on this.

Start by talking with friends and family to validate your thinking. If you can’t convince your wife, dad, friend or sibling — people who love you — that your idea has merit, how are you going to convince millions of people who don’t know you?

Now, I’m oversimplifying something on purpose: your family and friends might not know the industry. So how could they evaluate, for example, self-driving truck software? Well, you should be able to educate them on the problem, how you solve it, and ask them to assume you’re accurately portraying the situation in just a few minutes. The question isn’t: “Does my software solve this problem?” The question is: “Assuming this is a true problem and my software could solve it, saving trucking companies billions of dollars, do you think this is a good idea?”

Next, you need to talk with real potential buyers or users in the case of a free app like Uber. Ideally, you can provide some mock ups of what the product will look like that will help them visualize it. If you’re not a designer, draw it on a notepad or mock it up in Word or Google Docs and use a site like Fiverr to hire a designer for $25 to design it for you.

Get in touch with the executives of some trucking companies (to use the self-driving truck software example above). Doesn’t have to a billion dollar company. Find a local small trucking business. Start running the idea by them and getting their feedback. Ask lots of questions, be a good listener, and don’t get defensive when they don’t understand your idea or challenge its assumptions. This is part of the learning process.

Most of the time, when I come up with an idea that I think might be interesting, after talking with a few industry insiders, I quickly learn that it’s not going to work for some reason. There’s often some barrier such as a regulation, high entry costs, or an industry standard that has a monopoly that would be almost impossible to topple.

Talk to as many industry insiders as you can. At least 10-20 is a good start. LinkedIn makes it easy to find these people.

If after talking with insiders, you get unanimous positive feedback, then you can move to the next step. If the feedback is lukewarm, you have a major issue. If your idea is that good, the insiders will be giddy with excitement. If they say, “Meh, it’s sounds interesting. Not sure I would use it…” then your idea isn’t good enough. You can either move on to the next idea, or go back to the drawing board to figure out how to make your idea better.

The best way to do this is to ask penetrating questions to the insiders who gave you lukewarm feedback. “OK, so it’s just a nice to have, how could I make this something critical to your business? What would make this a game changer for you? What other major problems do you have”? You’ll get great answers that you didn’t consider.

3) Determine that the business model will work

Before taking the leap of investing your time, money, and energy into building a new disruptive product, you need to — at least at a high level — have a path for the business to eventually be profitable. This comes down to your cost to provide the product being less than your revenue.

Sounds simple, but many business models can’t even pass this test.

For example, let’s say you want to start a new TV brand that undercuts the Samsung’s and LG’s of the world, but with the same quality. Well, you might learn that there is not a way to get the costs down lower than theirs. So the business doesn’t work.

Or maybe you want to launch a direct to consumer wine company, but you find out that shipping is $25 per case and that wipes out your margins.

So put some thought into the metrics of your business. At scale, can you make a profit? No business is profitable right away, but the business model has to work once you’re at scale. The simplest way to do this is with something called “unit economics.” My cost will be X and my revenue will be Y per customer. If you aren’t good at this stuff, that’s fine. Maybe you’re a creative person and not a math person. Find a friend who can help. Everyone has a friend who is good at finance.

4) Build a Prototype

So you’ve come up with a product idea that makes some activity 10X better, you’ve validated your idea with potential customers who are giddy with excitement about your idea, and you’ve modeled the business and the numbers will work. Now it’s time to start building your product!

The most important part of building a new product is getting something out quickly that the market can react to and give you feedback. This is called many things such as “lean,” “agile,” “continuous innovation,” or “iterative development.” Let’s call it “lean” for now.

The product for your grand vision has lots of features, bells, whistles, and buttons. But you don’t have the time or resources to build all that now. So what you need to do is create something we call a “minimum viable product” (MVP).

An MVP is the simplest version of your product that delivers a benefit to the user. Unless you’re building hardware or something that puts lives at risk, you should be able to get an MVP out in 4-8 weeks. It doesn’t even have to fully work. Maybe it just simulates the product. But you have to as rapidly as possible create something that potential customers can experience and give you feedback. This is critical to making sure you’re on the right track.

In order to achieve such rapid prototyping, you have to get scrappy, creative, and efficient. Maybe you outsource different things. And you make a ton of concessions. You strip down all the eventual features you want to the bare minimum. The goal here is make sure you’re on the right track, even though maybe it doesn’t do all the things you eventually want it to.

And the design can be minimalist. What I will say though is that you shouldn’t compromise on aesthetic. Never give your early adopters an MVP that looks like crap. Design doesn’t take that long and it should only take you about 10% longer to make an MVP that looks nice versus a hacked together, plain text, 1990s looking web page. So make it look nice. Presentation matters.

The time consuming part is the programming of the back end. So that’s where you’ll need to compromise: the actual functionality. But you should be able to have the product look and feel the way it will eventually work.

5) Get Feedback on Your Prototype

Once you have a working prototype, have some friends and family try to use it. You’ll immediately find clunky things that you didn’t think of. Do this before getting it in front of real potential customers.

Once you’ve ironed out those kinks, go back to your insiders that you interviewed and get the product in front of them. You want to be there in person, if possible, to watch them use it. Pay attention to their facial expressions and body language, record their feedback and questions, and ask lots of “what do you think” questions about the various features. You’ll get great feedback and you’ll probably have a lot of work to do based on that feedback.

The primary goal is to make sure the feedback you get tells you whether or not you’re headed in the right direction. “If I keep building this product, will it delight my users?” If not, find out why. Hopefully there are some things you can do to make it right. If not, this is where the product journey ends.

Thousands and thousands of prototypes get discarded by companies every year because they just didn’t get positive feedback from the market. That’s OK. Move on.

If you did get great feedback, then it’s time to scale your product.

6) Scale Your Product

Building a business around a product is a whole new article unto itself. So we won’t cover that here. However, here are some of the basic building blocks.

Now that you have confidence that your product will delight your users and offer real tangible value, you can start building the real thing. Do this in constant contact with your early adopters.

For enterprise, you want at least 5, but 10 is preferable. For consumer, you need at least several thousand, but tens of thousands is preferred.

Create a roadmap of features you want to launch, the benefits of those features, and put them in order or priority of your customers’ needs based on their feedback. Work with them to refine this list. With each major new feature, repeat the steps of involving your customers, creating rapid prototypes, and getting feedback before rolling out new features to everyone.

Most important, measure everything. Use measurement and analytics tools such as Google Analytics, Google Optimize, and Google Tag Manager to measure every single event in your app. You want to measure anything that can be clicked, viewed, input, output, or interacted with. You want to be looking at how often people use it, what they do, what they don’t do, time in the app, engagement, etc. And what’s important to measure will be different for every product.

Once your product is live, your decisions become more and more data-driven. At critical mass, you don’t have to talk with your users as much. The data speaks for itself. If you roll out a new feature and no one uses it, it’s a dud. Or if they just use part of it or don’t use it very long, you have vital feedback in the data to tell you how to fix it. You can create experiments and split test your ideas to determine which approach to a new feature resonates best with your users.

I’m not saying don’t talk with your users. Always do that. But as time goes on, you’ll need more quantitative data because there will be too many users and talking with just a few of them isn’t a statistically significant sample size.

Use your early adopters as evangelists as well. For enterprise, offer them incentives to be a reference for potential future customers. Get testimonials. Get them to agree to talk to the press. Get them to be available to talk with your prospects. Not all of them will be comfortable with this, but your product and your relationship with your customers should be good enough that many of them would be happy to help. It’s in their best interests that you stay in business because they are benefiting from your product.

On the consumer side, you want to keep your users engaged and make it easy for them to invite and share with friends. There are lots of ways to do this and it depends on the type of product you have. But focus on turning these early users into a network of spokespeople for your business. “Have you tried Uber? It’s amazing. You have to start using it.” “I love Instacart. Do you use it? I haven’t had to go to the grocery store all year!”

If the product is amazing, people will naturally tell their friends. That’s why a great product trumps great marketing by a landslide. Both are clearly better. But start with a great product and you’ll be on your way to hypergrowth.

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