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Criticality of getting product roadmap right in early stage ventures

This is a cross post from my blog. Thought it might be relevant to share it in this forum. 

It is common knowledge that the success or failure for a new venture is primarily dependent on three factors – market, product and team. Entrepreneurs are traditionally good at identifying a market need and hence the two potential areas of fatal failure that one should watch out for are team and product.  In this post, I discuss the importance of getting the product roadmap right.  

Many of us would have heard of or had experience with ventures that collapsed because they ran out of funding before they could complete product development or released an over-complicated product that users could not understand or, released products that fell way short. The common underlying cause for failure might not always be the product itself, but rather the way it was rolled out and its inability to meet user expectations specifically at the time of its launch or release.

User expectations from a product are always dynamic and continuously changes with time.  In fact, one could draw a chart on how a user expectation varies with time. Initially, users (typically a small number) expect the product to address their core ‘pain points’ along with some ‘nice to have’ features, while taking into consideration any constraints that they might have. With time, expectation increases significantly (with more number of users) with need for more ‘nice to have’ features.  I call this the expanding ‘band of user expectations’.

To be successful, it is critical that the product roadmap be aligned with the band of user expectations (like Company B indicated by the green line). Deviating from it spells potential doom. In the example above, Company A attempts to deliver a complete product at a very early stage and ends up over engineering its product and potentially leaving its users confused. Considering that startups have limited resources, it unlikely that a company like this would have enough funds left in the bank to develop the next version. Company C on the other hand adopts a ‘throw it and see if it sticks’ approach and falls way short of user expectations. Both are not helpful scenarios.  

Companies that successfully align their product roadmap against the band of user expectations typically adopt a hypothesis-driven approach to product development. They test which features are desirable for their users, and aggressively seek feedback about their product and its features.  They also constantly iterate on development to ensure that their product fits well within the band of user expectations. Of course, there might be some companies like Apple that will exceptions to this kind of an approach, and are well capable of telling their users what they need. But 99.9% of the startups would be well advised to take structured approach to product roadmap.

I look forward to hearing your thoughts and experiences on this topic.

  • http://www.kmonyb.wordpress.com Krish

    Manav,

    Even “Thought leadership” that you allude must be incredibly expensive and perhaps the reason why it’s so much in short supply :-)

    With all their constraints and limited investment in R&D, if between them they’ve been successfully splitting a global market that yields $15 bn in annual revenues and earnings exceeding $4 bn., only the nuts amongst us would cry foul…

    They are indeed smart…Let’s give it to them ;-) ))

  • http://http/manavahuja.blogspot.com Manav Ahuja

    Krish,

    True, however, these indian IT vendors were built for and are running “Factories” of mass “body shopping”. Thought Leadership is anachronic for environment in these factories. Offcourse logically,in the process they could have brought “Business transformation”, but failed miserably at taking the understandable leap into consulting. WHY? Simply because of lack of – Leadership,Focus, direction and Vision. It was and is a Cat race between the 3 idiots of indian IT. You are bang on, Margins is the focus(if there is one). But its an unending debate.

    Instead of deviating from original message of the post, i still think, 3 idiots should be kept aside. they donot “deserve” a thought in this strategic discussion on successfully creating software products.

  • http://www.kmonyb.wordpress.com Krish

    @ Manav : The Global Delivery Model in itself is as good a product for IT outsourcing vendors I named since it shadows the clients’ process and systems close enough. When you have five plus years of exposure and first hand access to the clients’ data and processes, they stand a better chance of drawing insights into their clients’ businesses than the clients themselves and suggest dramatic improvements in elimination of wastage, optimisation of processes and quality. They can very well mature and read the user expectaions over client products and align it. Those are at least the premises based on which they dish out all those tall promises of “business transformation” they guarantee to their clients in SLAs.

  • Anshul

    Well said Andy! But I would like to add one point. Some times, actual user may differ from the customer (one who pays for the product).And inexperienced start-ups just to make a sale , add features as suggested/demanded by the customer only to realize 3-4 months down the line that actual users doesn’t need that particular feature.

  • http://http/manavahuja.blogspot.com Manav Ahuja

    Andy – Nice perspective and neat layout of the thoughts.

    Krish – I get your point, however, i think the analogy is like comparing apples to oranges. Infy, wipro, Tcs are NOT product companies. Even though Infy does have Finnacle and might fit the bill, other two are off the mark.
    Bottomline is that yes, cash is king and companies (rarely) reinvest into R&D and take the risk.

  • http://www.kmonyb.wordpress.com Krish

    Well said, Andy…

    Seldom do product development overtake user expectations. It calls for an extremely farsighted management to support a development team with loads of cash to burn on R&D… Apple got it right because Steve Jobs – a designer himself – was at the helm. But most companies don’t trust designers with corner office because they are by nature experimental and shareholders don’t like burning too much cash on trial and error. In a world that swears by quarterly earnings growth, it’s a little too much to ask. Want proof…? Take a look at the Balance Sheets of Infy, TCS and Wipro where the ratio of R&D spend to Sales would look like a rounding error… their focus is on protecting their margins, not on beating an IBM, Accenture, HP that’s fast catching up on their turf.

  • http://arvindnair13.blogspot.com Arvind

    Its an interesting topic..This structured approach is definitely more ideal than either of the other 2 extreme strategies- utilizing free trial periods, limited free subscription etc. However, I feel it may be easier to implement this approach for tech startups. Wondering what the ability to implement this approach will be for say a consumer product (which is say not heavily tech based)? Would the distinction be relevant?