3 Tips to turn your product into a business
November 25, 2018
November 25, 2018
Product founders get excited about the idea of solving a pain point a customer experienced and being creative enough to have a solution for it. They work tirelessly on their product to build out the features they feel the product must have to solve the pain point and deliver this with excitement to launch a new product into the world. Product founders will finish development of the product, go through rounds of testing and even do beta testing and have an exciting product launch party to announce to the world their product is here for anyone to use.
Do you see the problem with this? Product development and completion of the actual product offering should not be enough to get an entrepreneur excited about a product launch. If you are an entrepreneur what you need to be excited about is the business opportunity that the product you created is offering and that now you can see your business plan kick off to drive your business forward.
When you work on a product startup, don’t get me wrong, you need to nail your product delivery. If you do not, you will fail as a product team. With that said, if you do not nail the business offering, complete product planning and define the opportunity, you will fail as a business. Both the product features and business planning are both equally important to get right but often, most product founders only focus on the product delivery at first.
Here are 3 tips to turn your product idea into a business
1. Define the business opportunity. At some point a product owner identified a pain point a customer experienced and a solution to solve it, great! However did you stop to figure out what they would pay for that solution? Or how many customers like that exist? Or if there are already tools out there offering the same solution? Have you stopped to think about the expenses associated with the product? How many team members will be needed to build it, support it, sell it, market it and so on. If you have a great idea for a product you need to figure out if you have a great idea for a business around that product first by laying out your revenue model for the product and then the associated costs to build and maintain the product. If after doing your business plan you see yourself getting profitable and able to accomplish the product the way you feel it needs to be done, well then you have something to be excited about!
2. Work with users constantly. Product teams should always be talking to potential customers, leads, industry experts and anyone who will give them the time of day to validate their ideas. This should include their product ideas and business ideas. Product managers of a startup often focus user interviews on features that would be important to include in an MVP however what they need to also ask is how much would that potential user pay for the solution? Where does that user get their information from or what sites and magazines do they read to know where to advertise on. Are there conferences they attend or communities they belong to that as a business you should sponsor to get more awareness about your product? You need to be balanced throughout the process of building your product and your business to ensure you are working on both constantly.
3. Be Realistic in your planning. If you start your planning with we have no competitors so everyone will use us and we can charge whatever we want because of how much value we bring and if we build it they will come then you are in trouble. The reality is that you have competition. People will do it manually or some other way if your price point is off. If you do not scream to the world about your product no one will find it. Do not plan on “going viral” as this is not something you can plan for. Do not expect everyone to drop their existing process to adopt yours. Always understand your product will bring X amount of value and no more, you need to really know what that X is to price it right. In addition, everything can and will take longer to get done that you think it should. It will also cost more than you feel it should. Plan realistically to ensure your business has the best chance.
Product managers working in a startup need to do more product planning activities than those that are mature as the startup stage is where you can really see if the product idea itself has a place in the world as a business. This requires a great deal of research and product planning allows product teams to confirm that their product idea is also a bssiness idea before deciding to move forward or commit time and money on the product.