In the last post in this series, we talked about how the development of a new product is really a series of opportunities to create value for customers.
Before we start laying out these steps, there something to be done first.
We have to answer the question: ‘Should we even bother doing this?’
What do we need to know to answer this?
The market. The quantitative slice of the marketplace to which you’re convinced this product or service will appeal. This is a big part of the business case for even making the attempt. If it’s a known market, how big is it? How much of it do I think I can get? Is there a business opportunity here that’s worth pursuing?
Sometimes there is no market, yet. Then we might have to speculate about how big we think the market can be.
The customer. Who is going to use the product or service? What is their context? What universe would this product or service operate in and what are the rules of that universe? Are they getting the experience you’re trying to provide through some other method? How well is it working? How difficult will it be to get them to try something new? Will they find what you have in mind (if you’ve got something in mind yet) desirable?
Capabilities. Once you’ve answered questions about what the customer wants and needs from this experience, it’s time to think about whether or not you can do any better than what they’ve got now. Through talent or technology, can you give them a better experience? Can you give them a similar experience cheaper? Can you give them a different experience that satisfies the same set of needs and desires?
Is what you’ve got, or what you can do for the customer something that is enough better than what they’ve got now to get them to part with enough money for you to give it to them and make a profit?
If the answer is no, then you should probably stop. Re-evaluate.
Sometimes you can save a lot of money and effort by answering these questions as early as possible and deciding your resources are better focused elsewhere.