One of the reasons that product owners, tech founders and small business owners are successful is they focus on activity and completing the tasks that need to get completed to grow a business. They work hard, long hours and are willing to be as gritty as needed to be successful. When building a product based business however, taking the extra time upfront to complete due diligence with your product planning will go along way to saving you time, money and energy but also increase your chance of success.
Product planning is the process of taking an idea for a product and then validating the product has both a customer base that would be willing to adopt it and a business opportunity to actually make money and grow a business around. A great product that no one wants is pointless and a badly designed product with a huge potential audience is also a dead end for a product team. Product owners, tech startup founders and product managers need to spend the upfront time before diving into the build out of the product to validate a few key concepts about their idea which can shape the product development and business plan path.
Questions To Ask During Product Planning
What is the problem I am trying to solve for? This is where all product planning should start. WHY are you about to build the product. What problem or pain point do you identify and feel the product can solve for?
Who will use this product? Do you know who your potential audience is for the product you are planning? How big is this audience, for example, are you building a product to support a small niche of a specific industry or does it have a wider potential user base?
How are the users currently completing the pain point or solving the problem today? There may or may not already be a tool in place to do what you are proposing. This does not mean you shouldn’t do it, but you need to know your competition to see what is currently being offered to solve the same pain point in order to ensure your product differentiates from the current offerings.
Is the pain point sufficient that someone will pay for it to be solved? Not all improvements are sufficient enough to get someone to pay for it. You need to talk with potential users about how they are solving the pain point today, discuss your plans for a product and see if they would be willing to adopt it and pay for it. Specifically, you need to know how much they would pay for it to know if there is a future for the business.
As you begin the journey of building a product and business, you need to first focus on the business before diving into the product. You need to make sure there is an actual business opportunity that aligns with the product opportunity you are seeing and wanting to solve for. This requires additional product planning. For example, how many team members will you need to build your product? Will you need additional equipment or space to work on and build the product? How long do you expect it to take to build out the initial product offering. Based on this, you need to understand your planned expenses for your business over the first few years to get an idea of your potential investment requirements and expenses you would hit to launch your product.
Once you know your planned expenses over the first few years to build and launch your product, you need to then map out your potential customer acquisition based on the size of your potential customer segment, the adoption you would expect over the first few years and the expected average revenue per customer to get an idea of your potential revenue model. With your revenue model and expense model in place, you now have a good idea if your product plan aligns with a business plan and if there is any value in moving forward with your product development. Without running through the exercises upfront, you may have a great product but no business around it.